Some firms with access to defense and commercial have been protecting important suppliers by introducing commercial firms into the defense supply chain to keep the workforce operating.
FREMONT, CA: The significant downturn level because of the COVID-19 pandemic has pushed the aerospace and defense industry to address the major challenges plaguing it, such as right size staffing levels and securing cash. If a company does not position and coordinate the business for what is next, it will still be fruitless no matter how good it handles the existing issues.
Here are three aerospace and defense challenges to address:
Defense has become a shelter for companies with access to commercial aerospace and defense. Defense spending in most Western nations has remained robust, and governments are using defense spending as a motivation to make up for the commercial decline. Some firms with access to defense and commercial have been protecting important suppliers by introducing commercial firms into the defense supply chain to keep the workforce operating. The next year or two will present new avenues for companies to find a specialized area to invest in building a position. This can benefit the companies with a balanced portfolio, which leads to a stable and higher ROI.
The distinction between revolutionary technologies and incremental technologies, between stand-alone digital tools and those that improve a product, process, or service is vital because the aerospace and defense industry is a risk-averse market with major regulatory requirements along with margin pressure from the customer community. Digital tools that develop operational efficiencies minimize costs, and continue to process improvement will see its adoption to a great extent in the market, compared to solutions that are adjusted to new market capabilities and need early adoption by end-users.
Burning Through Cash
As the market demand has become uncertain and the increasing decline order books of major original equipment manufacturers (OEMs), the aerospace and defense sector are spending money at an unsteady rate. The industry needs to find a way to reduce spending as there can only be so many layoffs that can be made before implementing various strategies to slow expenses and generate new revenue.
Check out: Top Aerospace & Defense Companies