Engine Manufacturer Flies High With On-Time Delivery, Supplier Network Transformation and Aftermarket Plan
Supply Chain in the Aerospace sector
The senior management team at this aerospace manufacturer wanted to drastically improve its supply chain operations and asked Deloitte to perform a diagnostic assessment. The client's objectives were to:
After a successful diagnostic, the Deloitte team developed three programs to help transform the client's supply chain:
With unprecedented growth in the aerospace industry, the supply chain of this leading engine manufacturer was not keeping pace. Overall capacity, up and down the chain, was constrained. Supplier OTD was at historic lows. Globalization of the supply base was not supported by a strategic logistics network or management system. For a company that had a long history of high customer satisfaction, senior management recognized that its delivery performance was unacceptable.
Based on the initial findings of the supply management assessment, achieving industry leading performance in supplier OTD required a multidimensional program. We organized these programs into four work streams that included:
We redesigned and integrated the transportation logistics and network for new engines/parts, used engines/parts, reconditioned engines/parts, and leased engines to reduce operating costs and capture tax savings.
This project was implemented in a two-step approach. Step 1 focused on the network design and Step 2 on the implementation of the most cost- effective global transportation network.
The transportation network was modeled using a powerful numerical analysis tool and by re-engineering the global transportation planning process. The outcome was a detailed design blueprint that defined the number and strategic locations of cross docking points, regional distribution centers and forward stocking locations.
The current planning capabilities of this company’s enterprise resource planning system did not meet the special requirements for the aerospace aftermarket environment. We developed and implemented a program for requirement gathering, vendor benchmarking and selection, including a pilot prototyping. The pilot prototype used live data and customized business scenarios to demonstrate the tool's capabilities and quantification of benefits to build the business case for acquisition and implementation of this tool.
Some of the key functional capabilities include: multitiered network inventory optimization, customized algorithms for specialized segmentation and product lifecycle planning.
These programs are currently under way and have the following benefits and targets: