The success of an aerospace firm is often predicated on the performance of its suppliers. After all, how can a firm thrive and grow if its suppliers are not consistently meeting their requirements?
The aerospace industry has been on the cutting edge of disrupting traditional supply chain management. The focus is shifting from managing countless piece and part suppliers, to subsystems of fewer vendors with more capabilities.
Trends in Supplier Relationship Management
Many tier 1 and tier 2 firms are optimizing their supply chains with Vendor Managed Inventory (VMI), where the OEM has access to the aerospace firm’s inventory and is responsible for maintaining its levels. This fundamentally shifts the relationship from order giver/taker to a partnership.
Why? Because successful aerospace suppliers are well-positioned to identify process improvements. The VMI supply chain model leverages their expertise and unique perspective. These partnerships become incubators of future growth by revealing ways to streamline delivery, reduce costs, and improve quality.