The 2024 Aerospace Supply Chain Resilience report, produced by Roland Berger in collaboration with industry associations ADS (UK), BDLI (Germany), and GIFAS (France), has highlighted the critical issues facing aerospace supply chains in Germany, France, and the UK.
The study, based on a 144-person survey of “key industry players” in the UK, German and French aerospace industries, stresses the urgent need for strategic changes to bolster resilience and ensure readiness for future disruptions.
A lack of preparedness for production ramp-ups
The study reveals that a substantial portion of aerospace companies are unprepared for production ramp-ups.
Specifically, over one-third of the surveyed companies reported insufficient resources to support increased production rates. This shortfall is primarily due to a lack of personnel, production capacity, and financial resources.
More than 60% of respondents, especially Tier-1 and lower-tier suppliers, cited missing personnel as a significant constraint. Additionally, 40% faced financial resource limitations, while 35% lacked the necessary machinery to meet production demands.
The report identifies several supply chain issues hindering ramp-up efforts, including material availability, unreliable supplier deliveries, and difficulties in obtaining accurate customer demand forecasts.
These challenges, argue the authors of the report, highlight the need for comprehensive strategies to address resource gaps and enhance production capabilities.
Persistent supply chain disruptions
Supply chain disruption also remains a pervasive issue within the aerospace industry.
According to the survey, 66% of companies are still experiencing some level of disruption, with increased lead times and limited material availability being the primary culprits.
Although the overall disruption level has remained relatively stable since 2023, the proportion of companies facing severe disruptions has risen. Tier-1 suppliers, in particular, are the hardest hit.
Interestingly, the report notes that companies with improved inventory management, geographically distributed supply chains, and robust demand forecasting are less affected by disruptions. The report’s authors thereby claim that these targeted strategic measures can help to mitigate the impact of supply chain volatility.
Strategic shifts and resilience building
Another finding in the report’s survey was there is growing recognition among aerospace companies of the need to enhance supply chain resilience.
Approximately half of the surveyed companies have plans to change their supply chain setups, driven by the consequences of past disruptions and the desire to increase resilience. The most common strategies include localising supply chains, dual sourcing, and optimising costs.
However, the report also notes that a significant number of companies have yet to implement these changes, highlighting a gap between recognition and action.
Moreover, the survey reveals that only a small fraction of companies have transitioned from firefighting and stabilisation to achieving a resilient supply chain.
The share of companies in firefighting mode has increased by 8% since 2023, indicating ongoing challenges and instability. Conversely, there has been a modest increase in the number of companies reporting resilient supply chains.
Recommendations for resilience
To navigate the complexities of the current aerospace supply chain landscape, the report outlines several recommended actions. First, enhancing transparency and communication by implementing advanced digital tools for supply chain integration and improving collaboration with suppliers are crucial steps. It is said that enhanced transparency can help companies anticipate and manage risks more effectively.
Second, it is said that companies should invest in local supply chains to reduce dependence on global networks and minimise disruption risks. This approach involves building robust relationships with regional suppliers, ensuring a more resilient supply chain.
Third, the report concludes that developing long-term forecasting and planning is essential. Accurate demand forecasting and long-term planning should align production capacities with market needs. Companies should also invest in predictive analytics and other technologies to enhance their forecasting capabilities.
Furthermore, the report states that fostering strategic supplier relationships is vital. Establishing long-term contracts and fostering strong relationships with key suppliers can provide stability and ensure a reliable supply of critical materials and components.
Lastly, the authors of the research stress that building organisational capabilities is necessary. It is said that companies need to invest in training and developing their workforce to address skill shortages. Additionally, it is also stated that optimising organisational structures to reflect supply chain objectives can enhance overall efficiency.
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