David Grasso, EVP Aviation, Aerospace & Defense, says some suppliers experiencing a slowdown would do well to use the time to re-evaluate and prepare themselves proactively by working to become more effective organizations.
Key suppliers – and those suppliers’ suppliers – to aerospace giant Boeing are struggling with the fallout of the grounding of the 737 Max aircraft. More than 600 suppliers, and countless interconnected companies across the ecosystem involved with the aircraft’s production and return to service are re-evaluating their financial goals, revisiting their supply chain performance, and developing broader strategies to weather the storm.
This is not the first time, nor will it be the last, when a major disruption in Aviation, Aerospace & Defense has presented itself, and the key question now is how the ecosystem partners can respond now and in the future. Maintaining profitability and a healthy balance sheet during such an event is certainly achievable.
A concentrated data driven SIOP (sales, inventory & operations planning) optimization approach and a comprehensive review of product mix, demand signals and supply constraints is the first step in mobilizing corrective actions.
“SIOPtimization,” Maine Pointe’s intensive and hyper-focused diagnostic process collaboratively led by our industry and domain SMEs, is a key enabler of survival and success during such a disruption. Despite the enormous impact/scope of the current issue, these are not intractable problems. Solutions begin to emerge with a fresh look at the supply chain for opportunities to:
- Improve the velocity of goods, capital and information
- Enhance visibility into demand, supply and operating constraints
- Provide and encourage proactive analytics, collaboration and decision making
- Shed rather than redistribute supply chain ecosystem costs, and
- Achieve a faster, more predictable time-to-market for substitute and/or newly introduced products offsetting the disruptive effects of a given event
SIOP initiatives hold great potential to realize value via deeper collaboration in the supply chain. Moreover, leveraging the supply chain as a competitive weapon and/or shield against the effects of such events can ensure business partners will endure.
There are potentially many points of failure preventing the necessary changes from being widely adopted and institutionalized. Chief among those are cultural concerns, insufficient focus on strategic planning, and mobilizing tactical enablers.
The most successful companies capitalize on the adversity such disruptions foment. Some experiencing a slowdown would do well to use the time to re-evaluate and prepare themselves proactively by working to become more effective organizations. The SIOPtimization diagnostic can/will arm an enterprise with the insights and corrective actions to address cultural, strategic and tactical concerns for many different possible scenarios, so they are prepared for any eventuality.
Maine Pointe’s SIOPtimization offering in conjunction with our Total Value Optimization (TVO)™ methodology is well positioned to help Aviation, Aerospace & Defense companies free cash, reduce/redeploy production capacity and inventories, and identify and fulfill alternate demand while remaining ready to reengage when a disruptive event concludes.
About Maine Pointe
Maine Pointe, a member of the SGS Group, is a global supply chain and operations consulting firm trusted by many chief executives and private equity firms to drive compelling economic returns for their companies. We achieve this by delivering accelerated, sustainable improvements in EBITDA, cash and growth across their procurement, logistics, operations and data analytics. Our hands-on implementation experts work with executives and their teams to rapidly break through functional silos and transform the buy-make-move-fulfill digital supply chain to deliver the greatest value to customers and stakeholders at the lowest cost to business. We call this Total Value Optimization (TVO)™.
Maine Pointe’s engagements are results-driven and deliver between 4:1-8:1 ROI. We are so confident in our work and our processes that we provide a unique 100% guarantee of engagement fees based on annualized savings. www.mainepointe.com