Collaboration, meet acceleration in Production Ramp-up in the A&D Industry

The pressure is mounting in the aerospace and defense (A&D) industry. With skyrocketing demand and a ticking clock, manufacturers are in a race against time to ramp up production and clear backlogs. The stakes have never been higher. According to International Air Transport Association data, the commercial aviation order backlog has exceeded 16,500 aircraft (14,800 firm orders and 2,200 options). The global defense market is expected to grow from $573.5 billion in 2023 to $780.8 billion in 2028 at a rate of 6.4% and reach $975.4 billion in 2033. A global OEM recently announced ramping up production up to +50% by 2026. 

These ambitious targets are complicated by the A&D industry’s complex, multi-tier supply chain, which must rapidly stabilize and scale to meet delivery timelines and quality standards. To address these challenges, OEMs must prioritize:

1. Building product and process excellence
2. Developing a predictive and collaborative supply chain
3. Seamlessly integrating all steps across the value chain, from design and development to manufacturing and aftermarket services

Digital technologies offer solutions for this integration while supporting the industry’s Net-Zero commitments. By leveraging these tools, A&D companies can streamline operations, enhance collaboration, and accelerate production to meet growing demand.

We also need a collaborative approach across the entire A&D ecosystem. Collaboration is the catalyst that brings intelligent supply chains and product excellence together. It involves breaking down internal silos, fostering strong supplier partnerships, working closely with customers, and sharing best practices across the industry. By prioritizing collaboration at all levels, A&D companies can accelerate their transformation efforts, leading to more resilient supply chains, superior products, and ultimately, a more competitive industry.

The future calls for a highly intelligent predictive and collaborative supply chain

To achieve the necessary production ramp-up, A&D companies must transform their traditional supply chain and manufacturing operations in two key areas:

Intelligent Supply Chain:

• Create a system that is resilient by design, enabled by trust & transparency
• Develop agility to proactively respond to disruptions
• Leverage advanced technology and data analytics for predictive capabilities

Enhanced Product Excellence:

• Proactively manage desired quality standards
• Support operational sustenance
• Digitize quality monitoring processes

Driven by advanced technology and data analytics, this intelligent supply chain model and focus on product excellence allows for more efficient production that aligns with market demands. However, these improvements are more than just processes—they’re strategic assets for the organization that span the enterprise, enabling resilience and innovation.

Crucially, an intelligent supply chain and product excellence are built on collaboration, both internally within the organization and externally across the A&D ecosystem. Each organization is one cog in a large supply chain wheel. Collaboration, alignment, and integration form the foundation of building an intelligent supply chain and achieving product excellence.

By implementing these transformations, A&D companies can better meet production targets while maintaining the high standards of quality and reliability that the industry demands.

The case for operational excellence

Intelligent supply chain

C-suite leaders prioritize supply chain challenges, recognizing that an intelligent supply chain ensures both product delivery and excellence, driving short-term results and long-term value. Traditional A&D supply chains must evolve into Just-in-Sequence, predictive, and collaborative ecosystems. This transformation creates a resilient, transparent, and agile supply chain that proactively responds to disruptions.

Our end-to-end framework enables collaboration, real-time visibility, and intelligence-driven strategies. It shifts from a vendor-customer mindset to strategic partnerships and risk-sharing across the A&D ecosystem

To transform to a predictive and collaborative supply chain, A&D organizations need to focus on:

• Vision & Strategy: Develop an aligned supply chain strategy and operating model
• Planning: Address end-to-end planning challenges with dynamic, forward-looking capabilities
• Sourcing and Procurement: Create an intelligent network of strategic partners
• Warehouse and Logistics: Optimize inventory and supplies for efficient operations
• Supply Chain Control Tower: Enable visibility and collaboration across the ecosystem
• Technology: Drive supply chain reinvention through emerging technologies
• Data Foundation: Set standards for data quality and exchange across the ecosystem
• Sustainability: Integrate ethical and eco-friendly practices into the supply chain

Product Excellence

As we navigate these supply chain transformations, we must also focus on enhancing product excellence. Product excellence in aerospace and defense is not just about meeting quality standards; it’s about exceeding them. Here’s how we can achieve this:

• Optimized Product Performance: Address system complexity and integration challenges proactively to reduce time to market
• Data Analytics and Intelligence: Overcome data issues to gain insights and competitive edge
• Enhanced Process Efficiency: Streamline operations to reduce fail rates and production timelines
• High Precision Standards: Balance regulatory compliance with operational efficiency across product life cycles
• Integrate Data Science and AI: Utilize analytics to improve quality and efficiency
• Adopt Advanced Technologies: Implement ML, IoT, and Blockchain to enhance efficiency and reliability

All of these require engaged leadership, willing to have disruptive conversations and actions to drive digital and technology-enabled future-focused transformation that is long-term value enabled across the complete ecosystem.

Where CXO’s should focus their efforts

To successfully increase production, we need to focus on improving product quality and stabilizing the supply chain. This involves implementing advanced, collaborative, and predictive systems throughout the entire company and supply chain.

We must prioritize seamless internal alignment on strategy and spending and set aside resources to adapt and enable these innovative and future-enabling technologies.

We have identified key areas of focus for CXO’s:

Adopt a System approach by viewing the supply chain as an enterprise-wide system. CxOs must consider this broad perspective, as well as the underlying layers of the supply chain, and address the impact across the organization from products, to manufacturing, and services.

Be flexible to create a new supply chain design or reshape it to realize new program ambitions or major system or platform upgrade programs.

Integrate supply chain by expecting Tier 1 and Tier 2 suppliers to boost their commitment as a long-term business partner having appetite and ability to increase their accountability.

Encourage ‘shared responsibility and accountability’ from Tier 1 suppliers for the component turnarounds and pivot to new business models such as performance-based logistics and servitization models that help to meet customer expectations of high levels of fleet serviceability.

Develop a Culture of Quality: Foster a strong culture of quality, encouraging employees to own quality at every level of the organization.

Product Excellence: Build in Quality and Process excellence from the Product Inception and maintain it across the value stream.

Incorporate ‘Sustainability’ in the E2E supply chain framework including the spectrum from raw material sourcing, material procurements from tiers, manufacturing operations, aviation fuel, logistics, packaging to decommissioning.

Creating an intelligent supply chain and encouraging product excellence is one part of the big picture, but it is an integral part of the enterprise and the industry ecosystem. Through collaboration, we can accelerate towards an intelligent future that is connected and sustainable.

Learn more about Capgemini Aerospace and Defense:

Capgemini at FIA2024

Digital Continuity in Aerospace

Digital Twins in Aerospace and Defense

Intelligent Supply Chain for the Aerospace and Defense Industry

Lifecycle Optimization for Aerospace and Defense