A record-high aircraft order backlog and technical problems
As the two of the largest aerospace and defence manufacturers in the world, with reported revenue streams of approximately €65.45 billion and $77.8 billion, Airbus and Boeing delivered 528 and 735 aircrafts respectively in 2023. Airbus overtook Boeing to become the largest manufacturer in the aerospace sector. This shift occurred due to Boeing’s ongoing production challenges and the strong market performance of Airbus, particularly with their A320 (now the bestselling aircraft ever, overtaking US-based Boeing’s 737 jet) and A350 models. Now, Airbus must strengthen its leading position by ensuring that it can cope with the increased demand and avoid technical problems on its aircraft.
Aerospace supply chains are far less stable than the industry would like
Airbus and Boeing have both increased aircraft production, therefore aerospace supply chains need to keep up. However, aerospace companies are still catching up on production backlogs, and there are challenges in re-establishing pre-pandemic levels of supply chain efficiency. This has been compounded by geopolitical tensions, and natural disasters have created unpredictable bottlenecks and delays in the movement of raw materials and components.
Aerospace components often have lengthy production cycles, making it difficult to respond quickly to changes in demand or supply. The cost of essential materials like titanium, aluminium, and composites has increased, affecting production budgets and profitability.
This surge in demand has placed immense pressure on suppliers to keep pace and has exposed vulnerabilities in the supply chain.
3 areas to rethink logistics for the UK aerospace sector
Rethinking production logistics and supply chain management can significantly help the UK aerospace sector combat instability by enhancing flexibility, resilience and efficiency. In a period where the industry is making a transformative shift towards more sustainable and technologically advanced aerospace manufacturing.
1 – Digital Transformation and Data Analytics
• Advanced analytics: Utilise data-driven insights to predict supply chain disruptions, optimise inventory levels, and improve decision-making.
• Digital supply chain platforms: Implement digital tools for real-time visibility, collaboration, and risk management.
• Supply chain visibility: Enhance transparency across the supply chain to identify potential vulnerabilities and proactively address issues.
2 – Resilience and Flexibility
• Inventory management: Optimise inventory levels to balance costs with the risk of stockouts.
• Agile production: Adopt flexible manufacturing processes to adapt to changing demand and supply conditions.
• Risk assessment and mitigation: Conduct regular risk assessments to identify potential disruptions and develop contingency plans.
• Collaboration: Foster strong partnerships with suppliers and customers to share risks and opportunities.
3 – Sustainability and Circular Economy
• Sustainable sourcing: Prioritise suppliers with strong sustainability practices to reduce environmental impact and supply chain risks.
• Circular economy principles: Incorporate recycling and remanufacturing strategies to improve resource efficiency and reduce waste.
Rudolph & Hellmann Logistics Solutions is a new enterprise developed to work discretely with organisations in the UK. Within the Aerospace sector we work with organisations that need help trouble shooting or optimising their supply chain, production logistics, or operational infrastructure. Working in partnership, we can help you build a more robust and resilient supply chain, capable of weathering future challenges and maintaining a competitive edge.
