5 Key Factors Influencing the Aerospace and Defense Logistics

The aerospace industry is aiming to produce airplanes more quickly, efficiently, and profitably. As a result, there has been a considerable change in the supply chain management techniques.

Fremont, CA: Thousands of suppliers from across the globe have joined their hands to deliver the world's most efficient air transport vehicles. The global appetite for air travel is ever-increasing, and with it comes a massive demand for airplanes. The surging needs for airplanes and the fast-improving technologies have made it even more difficult for the aerospace industry to effectively address  the rising market demands. The aerospace industry is now aiming to produce airplanes more quickly, efficiently, and profitably. As a result, there has been a considerable change in supply chain management techniques.

Here are five key factors, influencing the aerospace and defense logistics.

Strict Regulations

Governments across the world have begun to implement strict rules concerning tracing the location and history of airline parts, detailed down to serial numbers. Airline parts often come with high price tags and a short life span. Monitoring, maintenance, and repair of these parts must be followed on a specific schedule. Airline companies today want to be able to track each element from the time they were sent for repairs, till they arrive back. The advent of specialized components for different models of airplanes has made sharing of parts across platforms even difficult. This has led to the rise in demand for tailor-made solutions for each airline.

Inventory Carrying Costs

Minimizing aerospace-related inventory costs will make your business operations more efficient and cost effective. Companies today are striving to achieve highly-skilled, global supply chains that help them to stay competitive. Aerospace companies also rely highly upon airfreight for the supply of parts, due to the expensive nature of components involved. This has pushed companies to seek strategic logistics partners that can guarantee excellent service at lower costs.

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Ramping Up to Meet Demands

According to reports, both Airbus and Boeing saw a significant increase in production, with Airbus attaining 11 percent increase and Boeing by 6 percent. Both of the companies have also predicted the passenger growth to average at least 4.5 percent over the next twenty years. With commercial aviation order books reaching an all-time high, multiple new models of airplanes were launched to meet the diverse needs of different airlines.

Optimizing Supply Chain

An airplane consists of more than 350,000 parts of different sizes that serve different purposes. Shipping these parts to the manufacturing location is a mammoth task in itself as they come from different parts of the globe. As a result, the aerospace manufacturers have begun to prioritize their supply chains, and spend the same amounts of time and money on research and development. Third-party logistics companies enable manufacturers to focus on production while they handle the smooth functioning of supply chains.

Lower Fuel Costs

Manufacturing airplanes as light as possible, without compromising on quality, is of utmost importance to airlines companies. Lighter planes mean more economical fuel consumption, which in turn increases profits. As a result, the carriers are now shifting their focus and efforts to the production of lighter aircrafts using composite materials. However, in most cases, high purchase and maintenance costs outweigh the reduced fuel costs.

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