This is the second of a four-part series I'm writing. As a reminder, this series targets A&D but the principles generally apply to all manufacturing of highly engineered product. Part 1 of this series can be found here: A few thoughts on tackling A&D Production Challenges (Part 1 - Labor) | LinkedIn
In my previous post, I mentioned the three significant challenges the A&D industry faces: conforming material, facilities and infrastructure, and skilled and qualified labor. Today, I'll be diving deeper into material shortages.
Material shortages stem from a variety of drivers, with several that I frequently see shown in the graphic below:
While it is true that inherent factors are just part of reality, you should still actively manage them in your Enterprise Risk Management (ERM) program. Influenceable factors are those that you can, as my name for them indicates, influence...external parties may have the final say but your voice in addressing these matters. Controllable factors are self-inflicted drivers...you should determine if any of these apply to your shortages and address them.
In any case, nine good ways to deal with these factors that I’ve seen follow:
Realign strategic planning: Make sure long-term planning is well-defined and connected to procurement and production processes.
Improve risk management: Work to understand risk in your supply chain, at least to two tiers down (and further for your hardest-to-source material) and then address those risks like they were in your own company (because they essentially are!).
Enhance visibility and collaboration across the supply chain: Encourage collaboration and communication among suppliers, subcontractors, and OEMs to make your supply chain more resilient and responsive.
Strengthen supplier relationships and evaluation: Form strategic partnerships and regularly assess key suppliers…it helps your suppliers get better and helps you better understand what is happening in your supply chain.
Improve cross-functional collaboration in your engineering and design: DfX works, but only if the people who understand how “X” should be done are in the room.
Implement targeted value analysis and value engineering (VA/VE): This tool can help take cost out of components and make it easier to buy or make them.
Optimize demand planning and forecasting: Demand forecasting done well will help you identify potential material shortages before they occur, letting you get ahead of problems before they materialize. This won’t fix all shortages but it will fix a lot and help mitigate the remaining.
Adopt and integrate advanced technologies: GenAI is all the buzz. It is real. So are other technologies that can help…control towers, predictive analytics, digital twins to name a few. Make sure you have a vision of what your future supply chain will be, all the way down to how material will be presented on the line.
Streamline production and inventory control: Implement Lean practices and embrace the latest warehouse and production management technology…you’ve probably already invested in these capabilities but may not be using them…the days of using off-line spreadsheets and manual travelers, not to mention “push” rather than “pull” systems for kitting and other materials are over.
Understanding and addressing these various external and internal drivers will improve production efficiency and minimize the impact of material shortages on your plants.
Stay tuned for my next post, where I'll explore the challenges surrounding facilities and infrastructure within the A&D industry, along with potential solutions. As always, your thoughts, insights, and suggestions are welcome. Please don't hesitate to reach out if you have any questions or would like to further discuss this topic.
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