Steps towards sustainable sourcing in the aerospace industry

For many organisations, supply chains account for around 80% of their environmental impact. Everything from the sourcing of raw materials, through to their processing and transportation, adds to the carbon footprint. However, the environmental impact of the materials sourced far outlasts these initial stages, as these are the materials that will need to be reallocated or disposed of at the end of an aircraft’s useful life.

Sourcing and sourcing strategy, therefore, form a pivotal part of a sustainable aircraft’s lifecycle. I propose a series of practical steps that manufacturers can follow to embed sustainable behaviours into the sourcing process and improve the end-to-end environmental impact of materials sourced and utilised across the aircraft lifecycle.

1. Establish the baseline

Understanding your starting point is key to identifying any improvements that need to be made and arming yourself with a data baseline enables you to measure progress. A core component of this is mapping your existing supply chain. This can be done manually by requesting data from each of your suppliers and inputting it into a vendor system solution to provide a clear view. Alternatively, some third-party data platform providers are beginning to offer an automated view based on analysing tier one inputs to give an initial estimate of your tier two supply chain and beyond, combined with ongoing risk alerts and intelligence; this option can provide a powerful step forward for aerospace manufacturers seeking more clarity when faced with a very complex supply chain. Taken a step further, these sources, combined with supplier-provided data, can provide inputs for environmental modelling and monitoring, such as the capability provided in Ivalua’s new Environmental Impact Centre. Having an understanding of this landscape, the origin of sourced materials, supplier ESG credentials (including carbon footprint) and global footprint, gives much improved visibility of supply chain risk and enables the identification of key improvement areas to build supply chain resilience.

2. Set the strategy

Defining a clear sourcing strategy underpinned by sustainable principles is fundamental to achieving circularity within the supply chain and post-production. These principles should be aligned with the overarching corporate and sustainability strategies of the organisation. In the case of an engine manufacturer, for example, these objectives may include to source, assemble and/or manufacture locally, wherever possible, in order to reduce the environmental impact attributable to packaging and logistics.

Equally, sourcing recycled and reused materials wherever possible should be considered. Following our engine example, this may not always be possible when complying with airworthiness regulations, particularly where safety-critical or life limited parts are concerned. However, initiatives such as EcoTitanium, which produces aerospace-grade titanium from recycled materials, represent new opportunities. Where the use of recycled material is not possible, manufacturers should seek to source commonly used or available materials, both to reduce the impact of sourcing limited raw materials and to increase the ability to re-use those materials in other industries post-aircraft disposal.

3. Understand the demand

Effective planning and forecasting capabilities are essential to reduce waste through additional cost and excess inventory, increase service levels and reduce the carbon impact caused by expedited delivery methods. Optimising end-to-end supply chain processes by completing a full pain point analysis and capability assessment will ensure planning is connected across the business and demand is fluently managed. However, it is the automation of these processes through short and long-term technology solutions that will really enable the right functions within a business to connect with a single and accurate view of inventory held and planned demand.

4. Contract for success

Sustainable supply chains are built through collaboration. Jointly investing in programme success fosters a mutual purpose to work towards improved environmentally responsible, resilient supply chains. Innovation incubators and appropriate incentives can further encourage continuous improvement against sustainability goals.

Companies can support the adoption of sustainable practices by formalising requirements in contractual obligations. Setting requirements for suppliers to meet sustainability targets and practices helps formalise a minimum expectation in this space, for example through the incorporation of ESG commitments in a Supplier Code of Conduct.

For suppliers, ensure your own success against contracted sustainability commitments by implementing an end-to-end contract lifecycle management (CLM) solution. Many of these CLM systems have advanced reporting capabilities, user-friendly dashboards and the ability to identify and manage contractual risk.

5. Collaborate with suppliers

Traditional supplier-customer relationships can lead to a transactional and one-dimensional way of working. There is much to be gained by developing a better understanding of supplier capabilities, sharing best practices, and taking a more collaborative and strategic approach to problem-solving and aircraft design. This relies on the proactive sharing of reliable data; high levels of intellectual property, however, along with classified data restrictions for dual-purpose and defence applications, pose challenges. These can be addressed, in part, through the de-classification of data (as is possible), by removing unnecessary contextual details, and through the use of secure servers with individual user profiles.

That said, sustainability data is not subject to the same restrictions and can be shared more freely. Through leveraging combined expertise and sharing knowledge, there is significantly more potential for sustainable design collaboration. This increases the potential to identify carbon reduction opportunities as well as the application of circular principles throughout the product lifecycle, which in turn generates additional value for the supplier, customer, and end user. Tools such as SAP Ariba and SupplyOn are widely used in the aerospace industry and provide a platform that enables supplier collaboration, as well as facilitates quality management and data sharing in a secure environment.

6. Measure progress

Targeted, specific and realistic KPIs with clear accountability and governance drive continuous improvement. These should be focused on delivering strategic objectives and on eliminating waste. For example, tracking delivery miles per part gives both a view of the associated carbon footprint and of whether the supply chain network is geographically optimised. Tools such as carbon calculators and Power BI dashboards can make this process less manual, but without consistent data governance and catalogued sources, KPIs can be left open to interpretation and manipulation.

The aerospace industry has made strides in recent years towards more sustainable operations, including investment in alternative fuels and technological advancements. However, material progress requires sustainable principles to be incorporated at all stages of the sourcing lifecycle. Circularity, data and collaboration should be at the heart of this to ensure value is maximised and progress sustained.