Why The A&D Industry Needs To Address Supply Chain Risk Intelligently

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Steve Flagg is the CEO and founder of Supplyframe. Read Steve Flagg's full executive profile here.

on display—at the Paris Air Show in June 2023. For the first time in more than 30 years, both global commercial aircraft deliveries and global defense spending are scaling at the same time.

Nearly every commercial aircraft segment is growing fast. AeroDynamic Advisory found that 796 narrow-body commercial aircraft were in production in 2022. That's expected to soar to 1,200 units by 2024. This is crazy growth. However, there's a current backlog of more than 15,000 commercial aircraft. Constraints across the A&D supply chain are numerous, so there will also be a huge backlog coming up.

Supply chain challenges are also putting a chokehold on their future business opportunities. More than one-fifth of the survey group said they're not even bidding on new contracts because they lack confidence in their ability to get the materials they need from a supply chain perspective. One-fourth of those surveyed said that electronic parts are the leading cause of their supply chain issues.

This challenge is apparent when we work with customers, where we've seen new programs that rely on outdated information around cost, lead time and even product life cycle risk. In one case, we identified that 10% of the parts for a customer's new program were obsolete or at risk from end-of-life. There was a 120% lead time variance in its enterprise systems compared to actual market lead times across its entire bill of materials.

 

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