The Future of Aerospace and Supply Chain Implications

airplane landingAt the “Future of Aerospace” event in Paris this past week, I took the opportunity to see what the great and the good of the industry were predicting. In particular I was eager to learn about the implications to the supply chain, which we are heavily involved with in the UK through Sharing In Growth.

Some of the statistics shared were staggering; it is predicted that there will be 5 trillion people classed as “Middle Class” by 2030 – the significance being that this is the class that chooses to fly for a vacation. As the majority of the new additions to this class will be from Asia, airlines and airports around the world will need to adapt their customer service accordingly. A nice example of this came from Augustin de Romanet, CEO of Aeroports de Paris. They have helpers to assist passengers find their way around their terminals. They noticed that Chinese passengers would not ask older helpers, so they employed younger ones in these service roles.

Focusing now on the supply chain, the next staggering statistics were:

  • There is a demand for 35,000 aircraft over the next 20 years
  • 65% of each Boeing manufactured comes from suppliers
  • A Boeing 747-8 has 6 Million parts
  • Productivity has increased 20 fold over the last 30 years

This has serious implications for the supply chain.

In another presentation from Dassault Systems, they identified four trends:

  • Consolidation in the supply chain
  • A shift of focus from followers to leaders – companies being used because they optimise their own processes
  • Continuing development of highly specialised suppliers
  • Globalisation

This was well illustrated by a French Tier 1 supplier, who had embarked on “De-risking the supply chain” through:

  • A reduction in suppliers from 4500 to 280
  • Embedding Supplier development into their suppliers
  • Adopting local sourcing – either by using a local supplier or getting their European supplier to invest in the country

It is clear that whilst there is tremendous opportunity for growth in the future of aerospace, unless suppliers are prepared to develop a global mindset and skillset, they will lose out to leaner, more adaptable competition.

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