Optimizing performance of the supply chain starts to become a tall order, but for aerospace and defense (A&D) in particular, this is crucial.
Visibility across any commercial supply chain is key. In a recent study from Bloomberg Businessweek Research Services, 73 percent of decision-makers said that supply chain visibility that optimizes real-time data was becoming increasingly important. Put this together with another piece I read on five questions which CEOs should ask about their supply chain, and decision makers agree that visibility is key to successful supply chain management as it is crucial to almost all business planning process.
Ensuring the highest state of operational readiness
For the military, the primary driver is being able to ensure the highest state of operational readiness at any given time – a requirement complicated by the uniqueness of defense hardware. And the nature of military deployment makes it more likely that things will get broken so being able to measure the performance of the supply chain is important in order to meet this readiness.
For example, the gearbox from a military heavy lift helicopter has a globally complex supply chain, almost entirely made up of specialist parts from specific suppliers located in multiple geographies. Obtaining a replacement, most probably as a service exchange assembly will be rapid, the subsequent overhaul of the displaced unit will often take weeks, if not months, while the component parts are sourced. Budget constraints and/or outsourcing these maintenance activities to industry will probably mean that there won’t be 20 service exchange assemblies sitting in a warehouse on the off-chance that they may be needed, and so the rotatable pool of service exchange assemblies is likely to be small with an intense pressure to push the displaced assembly through overhaul and back into available inventory.
Optimizing supply chain performance
Optimizing performance of the supply chain starts to become a tall order, but for A&D in particular, this is crucial: the effectiveness of the supply chain can win a war as much as the fighting skills of those involved. So, new modular approaches to enterprise planning are offering a ‘pick and mix‘ approach to supply chain management. These solutions enable A&D organizations to customize their own ‘cockpit’ display where key performance indicators can be viewed and measured using easy-to-read dials and graphs, and with end-to-end visibility across the entire supply chain in order to optimize performance.
Our own Corporate Performance Management solution provides a 360 degree perspective of performance across all business strategy, including the supply chain, providing end-users with a complete understanding of which functions deliver real operational value and those that are less effective. As A&D professionals, we believe that being able to apply corrective actions on a sooner-rather-than-later basis and making sure those all-important Service Level Agreements can be effectively enforced is paramount to deploying successful military operations – but what do you think? How do these priorities compare to your industry?