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Supply Chain Strategies for Automotive, Aerospace & Defence Industries


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The Automotive, Aerospace and (to a lesser extent) Defence industries are undergoing massive globalisation. They are in various stages of transformation from a regional/local model to a global model in which the buying, making, moving and selling activities could happen anywhere in the world.

The transformation to a global model is creating new supply chain challenges internally within Automotive, Aerospace and Defence companies and in their systems suppliers and tier suppliers. This transformation is being done to achieve greater scale and cost efficiencies while maintaining or enhancing supply chain flexibility and customer responsiveness. For instance, more and more(to supply chains are starting to originate in low-cost sourcing countries such as Asia (e. g. China and India) and Eastern Europe.

In fact, due to globalisation, each tier in the automotive supply chain, for instance, can now be in any part of the world. This is resulting in new supply chain dynamics such as original equipment manufacturers (OEM's) being challenged to manage a global footprint of production and supplier increasingly focussed on new customer acquisition rather than being captive to one or two OEM's, resulting in a need for improved customer service and supply chain competency.

To understand AA&D technology adoption trends and benefits, Aberdeen benchmarked 105 automotive aerospace and defence companies in December 2006- January 2007 through a dedicated survey. This survey was supplemented with phone interviews. This survey was supplemented with phone interviews. The survey participants included OEM's, tier suppliers and distributors. Many of which are involved in both the automotive and A & D industries.

To thrive in today's globalised environment, AA&D companies are re-examining their supply chain processes and their supporting technology. Aberdeen benchmark results show that supply chain management processes and technologies are being actively re-evaluated by AA&D industry companies today. Fully 76% of companies have delivered to or been asked to deliver management recommendations on how to improve their supply chain management technology in the past six months. Additionally, 79% of companies are looking to improve their supply chain management processes.

Additional pressures for supply chain improvement include a major focus on rapid new product development programmes due to competition from global brands as well as shifts in consumer taste. The automotive industry is feeling continued pressure to improve order-to-delivery lead times to customers and dealers and better match supply to short-term demand.

Aerospace and defence companies are feeling continued compliance initiative pressure, resulting in a need for more technology enablement of business processes. For instance, there is a split need in the aerospace and defence.

Waer Systems offer aerospace supply chain management , defence supply chain management & the leading supply chain management solution .


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