Turbulent Skies: How The Aerospace Industry Must Steer Itself Into A Brighter Future

5 min read

By Mark Thompson

Consultant

The aviation industry has recently seen huge amounts of growth due to the increasing demand for air travel, both for business and pleasure. The far reaches of the planet that we could once only dream of visiting are now possible holiday destinations. The rise of budget airlines means that people can fly far more frequently (International flights from Leeds Bradford, for example, start at as little as £32!). The growing Chinese economy has resulted in increased travel to and from the country. Along with Iran’s lifted sanctions, these have all added to an increase in aircraft purchasing. The outlook is good growth and continued optimism.

The Challenge

However there is a huge challenge currently facing the commercial aviation industry. This steers right through the tier OEM supply chain network to raw material suppliers all the way up to the duopoly of Boeing and Airbus. ‘Cost reduction is key, or we'll lose our business’. Players in the aerospace sector must cut their costs or face losing key customers and clients.

Both Boeing and Airbus have requested a reduction in prices from the supplier base. Airbus are reportedly requesting a 10% reduction and Boeing as much as 15% from the direct suppliers. The threat of ‘cut costs or we will cut you out’ has compelled a real call to action.

So how do the aircraft parts suppliers, system integrators, materials suppliers, aircraft manufacturers etc. execute this and keep up with rising wage costs, increased energy prices, redundancy avoidance and continuing a growing and healthy business? The focused adaptation of lean manufacturing and continuous improvement.

The Solution

Although lean thinking can be taken as far back as the 1450’s, the real implication of lean manufacturing has to be that of the automotive industry and Henry Ford. The aerospace sector has sporadically taken parts and processes from the automotive industry and adapted this to its processes. Yet it has never taken hold of the concept completely and adapted this wholly into the industry.

With the heavy demands from the top this has to be rolled out, fast and efficiently.

So what are the benefits?

  • Increased productivity
  • Reduction in scrap
  • Lead time reductions
  • Increased labour efficiency
  • Reduced operating costs
  • Improved quality

There are numerous advantages, but undoubtedly the biggest return on investment can be seen in the increase in product’s profitability. So what do you have to lose?


The implementation

In reality, the application of these processes is not that simple.

Lean and continuous improvement cannot be implemented overnight. Nor can you get a black belt qualified individual to come in and just wave a magic wand. It needs a change of mind set and deep commitment and involvement from the entire organisation (or most of it!). Often lean is implemented as a short term goal and then dismissed. This undermines its principals and the future development of what is; in its basic form a bottom line reduction exercise.

The challenge is creating a change in the business culture and environment. These changes have a drastic effect on employees. With change comes job creation, redundancies, both organisationally and physically. Change like this can affect the retention of talent, especially if not implemented properly with a change in mind set.

This however, means that there is talent on the market and vacant positions waiting to be filled with strong, value adding individuals.  CSG understands that strong, skilled people are what make organisational changes effective. We have an extensive network globally, and offer a variety of in-depth consultative services. If you would like to have an expert discussion about how CSG can help you, please do not hesitate to contact us on + 44 (0) 333 323 2000 for a confidential discussion.