Contract prices are locked-in months or years before products are even close to completion, and because of this A&D organizations need to maintain and sustain profitability throughout the life of the Contract. Any disruption associated with getting product in or maintaining production schedules could have adverse effects on profitability. On top of that, A&D companies are dealing with complex Bill of Materials (BOM) and need visibility down to the individual component. There is also a movement in the industry to support cross organization collaboration on new contracts and engineering efforts. To sustain growth and continued profitability, A&D organizations will need a set of supply chain tools that provide them comprehensive views of product activity in their supply chain, enable them to react quickly to supply disruptions, and provide a mechanism to collaborate with the partners in building product.
Challenges
- Increased transportation costs to maintain inventory schedules.
- Greater number of trading partners requires improved collaboration.
- Fewer amounts of safety stock require coordinated delivery accuracy.
- Added complexity to the supply chain structure to support lean manufacturing objectives.
- Synchronization of transportation and production schedules.
- Inability to react to changes at the plant, supplier, or program level to asses the impact on the logistics network.
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