Industry Overview

Dynamic market forces such as globalization, technology advancements, declining defense budgets, economic power shift towards growth markets, mergers, acquisitions, and divestitures in the industry are forcing transformation upon both large and small A&D companies. This transformation is being driven by three industry-wide imperatives: manage development complexity to improve engineering efficiency, grow the top line through differentiated aftermarket services and build and optimize dynamic value chains. Extreme engineering continues to drive new designs, materials, suppler relationships and supply chain structures.

As with many industries, the aerospace and defense industry continues to increase the amount of work outsourced to suppliers, from manufacturing of components to the building of modules and sub-assemblies. This trend has resulted in a very complex supply chain, making customers increasingly dependent upon their supplier’s ability to manage their sub-tiers.

Factors that demand attention:

  • Forecasting 50% growth through 2022
  • Advanced designs are re-shaping the value chain, material requirements, and supplier relationships.
  • ‘Power-by-the-hour’ operating structure changes after market part demand model.
  • Replace vs. Repair = greater raw material demand.
  • Some materials & part transformation processes have limited capacities. Increased competition to secure capacity.
  • Lack of confidence in planning process causing sub-tier suppliers to take excessive inventory positions.
  • Supply related Issues manifest themselves more than 1 tier away.
  • OEM’s need to coordinate the extended value chain in a programmatic way in order to meet deliveries.
Leading strategies for managing supply risk, price volatility and reducing COGS:

  • Re-establish control of strategic commodity categories
  • Gain visibility & control of the sub-tier material spend to ensure continuous supply of material to the network
  • Leverage volume with raw material sources for commercial benefit.
  • Implement sourcing strategies consistent with supply chain risk profile.
  • Identify value of material inputs in part should-cost model.
  • Develop aggregate forecast of production materials as a function of grade, specification, form, and size.
  • Develop aggregate forecasts of demand for special processes by specification.
  • Broadcast demand for material and special processes to the extended value chain of partners & suppliers
  • Reduce material complexity through the use of standardized materials.
  • Remove unnecessary inventory throughout the extended supply chain.
Supply Dynamics SDX™ 8.0 Platform Solution Capabilities

  • Extended Bill of Resource Management
  • Supplier Bill of Material Validation & Change Management
  • Consolidation of Material Demand
  • Consolidation of Special Process Demand
  • Multi-Tier Forecasting, Planning & Broadcast
  • Elemental Forecasting
  • Multi-Tier Sourcing & Procurement
  • Material and Material Size Rationalization
  • Supplier Rationalization
  • Price & Supply Risk Management
  • Extended Supply Chain Visualization
Engaging Supply Dynamics: 

We play an integral role from initial client contact through ongoing solution support.  Supply Dynamics works directly with clients or in partnership with leading global service providers.  Our phased value approach and supporting processes deliver benefits at each stage of interaction.

Stages include:

Pre-Sales Activity

  1. Identifying initial strategy & value areas
  2. Develop scope for SDX Opportunity Assessment designed to identify & highlight cost savings and efficiency opportunities.
  3. Plan and conduct SDX Opportunity Assessment (on site).

Solution Configuration

  1. Assembling initial ‘Extended Bill of Resource’ Model.
  2. Part Attribute Characterization.
  3. Load production materials (alloy, grade, specification, form, size, and volumes.)
  4. Load materials, parts and BOM hierarchies in SDX™ 8.0 Platform
  5. Link finished part forecast to production material requirements.
  6. Multi-Tier Sourcing Models (e.g. Directed Buy, Buy-Sell Resale, and others).

Solution Deployment

  1. Deploy ‘Cloud Based’ Instance of SDX™8.0
  2. Provide an interface for stakeholder interaction and validation of information

Ongoing Support & Services

  1. Provide help desk support.
  2. Provide ongoing platform support, maintenance, enhancements and new solution capabilities on product roadmap.
  3. Add new commodity categories and/or sourcing models to SDX 8.0 Platform
  4. Provide Supply Network analyses & reporting as a Service.
Value Drivers

  • Leverage aggregate volume to gain commercial benefit with producer.
  • Eliminate non-value add margin est. > 20 percent (over and above margin on value-added services).
  • Standardize production material forms, sizes and specifications.
  • Proactively expedite the timely purchase and supply of production materials across the extended supply network.
  • Provide forecast of elemental inputs to support financial risk management strategies.
  • Improved forecasting & planning.
  • Ensure continuous supply and capacity to avoid supply interruptions.
  • Recover scrap/revert value.
  • Reduce delivery variances through better coordination.