Think you are right in the middle of an enthralling match, over the weekend and dinner is not delivered on-time!
A critical and unsatisfactory situation right?

A similar situation occurs when your service provider lacks quality and delivery assurance service. We have a problem not because we didn’t have a solution, but because we didn’t know the problem. Past root cause analysis of critical programs points out issues in the program initiation stage as a significant contributor. In fact, 80% of the delivery issues are realized only after the occurrence. Today let us take a walk through the importance of the Delivery Assurance function in the Aerospace sector.

Why need Delivery Assurance?

Flexible operations provides the capability to meet customer demands and regulate costs. For sectors, like aerospace, the ability to operate efficiently and remain competitive is even more critical. Amid the proliferation of such digital technologies, the Original Equipment Manufacturers (OEMs) or Tier 1 suppliers need to ensure product reliability and quality.

Therefore, in this hyper-connected world, it is essential to implement in-built delivery assurance processes to accelerate time-to-market, increase productivity, develop supply chain leadership and deliver genuine customer experience. In fact, a strategic and analytical delivery assurance process acts as a quality enabler than just a gatekeeper.

Delivery Assurance Changes the Game

Supply chain management is eligible for the success of any organization. Efficient and effective supply chain enables the A&D sector to meet their strategic and financial goals. This is a complex ecosystem with different tiers of suppliers, OEMs, Maintenance Repair and Overhaul (MRO) providers, and customers. However, this is not the end of the line; apart from customers across the globe an organization also needs to deal with an entire ecosystem of data created by the digital disruption in the industry.

At this juncture, high-end quality and delivery assurance help achieve transformative initiatives in the delivery system. Leveraging advanced analytics, cloud, and artificial intelligence into the system will maximize operational efficiency and meet the high demand with agility. Hence, some of the significant benefits achieved from delivery assurance are:

  1. Improved proactive and preventive delivery management
  2. Provides independent assurance and cost-effective solutions
  3. Increased productivity
  4. Ability to prioritize the severity of supply chain impediments

Confronting the Challenges

The challenges in the A&D sector are ever-evolving and demands strategies that they can adapt to address their problems.

  1. The lead time:
    Due to the material procurement difficulties, stringent manufacturing and quality requirements, low order quantities and distributed manufacturing facilities across the globe – the lead time in A&D manufacturing is longer compared to other industries. A&D sector depends on their supplier network to meet such delivery schedule of the products. As a result, disruption at any part of the supply chain system leads to subsequent delivery failures, cost overruns, and order cancellations.
  1. Dependence on sole-source suppliers:
    Despite the usual diversified supply chain, some A&D OEMs might be compelled into sole-sourcing arrangements for different parts and various subassemblies. Depending on a trusted sole-source supplier poses an on-time delivery issue, higher risk concerning production halt, delayed delivery and even cost overrun.
  1. Financial challenges across the sector:
    To support the capital requirements for A&D programs, OEMs often partner with their suppliers, where the latter co-fund programs in exchange for access for longstanding production contracts. However, participation in such programs mostly leads to reduced margins for the suppliers in short to medium term.

Progress with Corrective Delivery Action

As companies continue to integrate their supply chain network, different parts of the supply chain become well-connected. As a result, disruption in the system leads to a cascading effect on the entire supply chain and ultimately results in the delay of delivery, along with increasing the cost.

Hence, real-time application of digital technologies and improved strategic planning is required to get better assurance in delivery management.

  • Adoption of digital technologies:
    Digital technologies and digital business models are indeed integrating the aerospace supply chain. Connected devices and even sensors are together used to optimize operations of various functional units. Common data platforms are on the other hand used for sharing information and 3D printing technology to increase the overall efficiency of the supply chain. Such digitally driven operational models lead to the evolution of the aerospace ecosystem.
  • Risk-sharing partnership:
    Most of the leading aerospace companies engage in collaborative agreements through which development, as well as production, are executed by a risk-and-revenue sharing arrangement between the OEMs and its suppliers. Such methods provide OEMs the opportunity to distribute risk across the supply chain. Hence, they also reduce costs across all the stages of the supply chain, including aftermarket activities.
  • The inclusion of local players in the global delivery network:
    A&D players partner with local players in foreign markets as their suppliers. In some cases, A&D major market players make the local players an integral part of their global supply chain. This helps in cost efficiency and increases the specialization in design, manufacturing, and assembly of A&D products. Hence, working with local suppliers allows OEMs to perform efficiently in the system.

A Quest to Create New Delivery Assurance Process

When it comes to delivery assurance, a procurement team gains the ability to achieve 100% fulfillment on the deliveries of every manufactured product with detail-level visibility into parts and raw materials with the assistance of Analytics Response Center (ARC). It ensures all the right parts arrive at the all the right places, just in time and in full so that manufacturers can achieve their projected production output levels.

ARC identifies component part orders proactively, well before production time. It also enables procurement teams to place alternative orders with other suppliers to ensure necessary components arriving on-time.  It helps forecast future output capacity based on part arrivals to plan customer commitments and schedule assembly-line resources.

Quest supply chain analysts, who specialize in validating and assessing outlier data with the help of ARC tools make it easier to identify risks and determine corrective action. Our IoT based asset tracking tool is a complete, smart inventory management tool with some features explicitly aimed at reducing inventory running costs, providing 24×7 asset visibility, and maximizing operational efficiency. Quest’s team works with suppliers to manage line of balances, expedite hardware, validate delivery and quality clinics, and perform supplier production readiness reviews.

With today’s aerospace supply chain constraints, the ability to juggle both reactive and proactive solutions is imperative. Quest’s delivery assurance solution gives the visibility to your supply chain needs, provides the resources to enable rapid recovery, Delivery Analysis & Disruption Identification, on-site Validation & Verification, Reporting & Escalation, corrective action identification and the ARC tool to prevent reoccurring problems.

Written by Quest Global

on 01 Aug 2018