Aerospace and Defense

The aerospace and defense industry is undergoing a fundamental transformation in its development, manufacture, and distribution of leading-edge commercial and military systems. Discussing ways to control costs, improve quality, accelerate time to market, and transform operations into a high-velocity enterprise is at the core if i2’s services and solutions for the aerospace and defense industry.

Industry Dynamics

Traditional supply chains in the aerospace and defense industry are evolving at an accelerated pace. Variability is becoming a critical business driver across all of its market segments. In addition, due to the push for increased cost effectiveness, industry players are globalizing their supply chains and working with partners from all over the world. Today’s A&D supply chains are characterized by the need to manufacture increasingly complex equipment and systems, ongoing pressure to reduce costs, extended product life cycles, requirements for optimized asset utilization, turn-key support services, and ongoing requirements from regulatory and safety agencies.

To meet the many challenges that emerged as a result of these new industry dynamics, aerospace and defense companies have increasingly relied on automation and technology enhancements - designed to work on removing business “silos,” improving collaboration and fueling gains in productivity. In addition, companies have embarked on initiatives focused on reducing costs through improving procurement processes.

While the technology advances of the past 10 years have enabled aerospace and defense companies to overcome some of its challenges, the industry is ready for the next major leap in productivity. This major leap in productivity will come from improvements in cross-functional processes that leverage a common set of services and data standards wherever possible.

The i2 Solution for Next-Generation Supply Chain Management

i2 has a long heritage of supply chain successes in the aerospace and defense industry. From managing enterprises to improving collaboration with suppliers, i2 solutions have added value in supply chains across the world.

Now, as the aerospace industry is poised for the next significant gain in productivity and the defense industry is heading for more operational efficiency, i2 solutions are uniquely positioned to provide next-generation supply chain management capabilities.

Primary characteristics of new-generation supply chain management include enterprise synchronization, visibility across extended supply chains, and closed-loop supply chain management. Enterprise synchronization involves real-time integration of supply and demand management. Supply chain visibility across the extended supply chain includes management of business processes from the supplier’s supplier to the customer’s customer. Closed-loop supply chain management delivers early visibility into threats to the plan, enables quick root-cause analysis, and facilitates the immediate implementation of actions across the organization.

How to Proceed?

What should an aerospace and defense company do to excel in this changing environment? Most importantly, a company should move from value shifting to value creation. It is important to understand where value is being lost and how to close the gaps in planning and execution. Instead of asking what happened, focus on "when did you know and what did you do?" or "why didn’t you inform others?"

It is also important to adopt the seven principles for an agile enterprise, as well as to establish requirements and commitments for dependability for both OEMs and suppliers. Aerospace and defense companies need to focus not only on data exchange standards but also on real process improvements.