Supply Chain Risks in Aviation: A Complete Guide

Supply chain risk management is an important strategic choice for companies in the aerospace and defense industries. By evaluating threats to the supply chain, companies can minimize risk and seize new opportunities. Here are a few examples of risks in the aviation supply chain.

Read on to learn more about COVID-19, aircraft parts shortages, and a potential conflict between Boeing and Airbus.COVID-19The COVID-19 crisis is raising questions about the aerospace industry and competition. This has prompted new government policies aimed at restoring competitiveness and preserving business dynamics. But there are also social considerations to be taken into account. Ultimately, these questions will affect the entire aviation industry.

Supply chain risks in aviation are an ongoing concern for manufacturers. The Boeing 737 Max situation and the COVID-19 pandemic are just two of the recent examples. The crisis impacted many manufacturers, including small and midsize suppliers. This reduced demand, resulted in supply interruptions, and impacted aerospace OEM revenue. These challenges can make it difficult for aviation companies to maintain the level of service they're currently providing.

Aerospace supply chain disruptions

The aerospace industry has seen its fair share of supply chain disruptions in the pastfew years. From the COVID-19 pandemic to materials shortages, the industry has seen some low points. However, manufacturers can plan for the future by adopting aerospace ERP software that will make the supply chain more resilient.

One of the major challenges facing the aerospace supply chain today is backlogs. According to Airbus and Boeing, there were 6,874 unfulfilled aircraft orders in 2016. While backlogs can help the aerospace supply chain business, they can also be a hindrance to the industry if suppliers are not able to meet the demand. Below, we look at some of the common issues that disrupt the aerospace supply chain and how they can be overcome.

Aircraft parts shortages

While parts shortages in commercial aircraft are the most obvious concern, suppliers for aircraft parts also face supply chain risks. Companies that produce components for commercial airplanes often face challenges sourcing parts from overseas sources. For example, Safran, a French aircraft manufacturer, has been having trouble sourcing American castings and forgings for its aircraft. The company is also struggling to find skilled welders to meet its production schedule.

The supply chain is also affected by staff shortages. These issues have delayed shipments of parts to MROs and pushed back aircraft maintenance. These challenges are further compounded by the absence of financial incentives for parts manufacturers to maintain a fully stocked supply chain.

Airbus and Boeing supply chain conflict

The Airbus and Boeing supply chain conflict has affected businesses on both sides. The US imposed tariffs on European goods after the World Trade Organization ruled that the EU had violated its rules by providing subsidies to Airbus. The EU retaliated by imposing its own tariffs of up to $4 billion per year.

The two companies are competing to build large jetliners for airlines, which is an important market for them. They have a huge product range, including single-aisle planes and wide-body jets. While Boeing is the leader in wide-body aircraft, Airbus dominates the market for narrow-body jets.

Erp.aero is a software development company with a pipeline of products designed to digitize and streamline operations of aerospace companies.