Vivek Saxena
“You never know who's swimming naked until the tide goes out.”
I am reminded of Warren Buffett's words in the climate created by the coronavirus pandemic. Aerospace manufacturers that are lean, use enabling technologies and have a robust business continuity plan will stand tall in tough times. Conversely, inefficient companies that have ridden the gravy train of the aerospace supercycle will suffer.
I will share a few best practices that should help industry prepare for the long haul, using an admittedly unscientific survey of multiple manufacturers in various tiers to assess how the aerospace supply chain is coping with the triple whammy of reduced demand, weakened productivity and increased supply chain distress. I asked, how are they dealing with dwindling attendance, regulatory confusion and the decoupling of remote support staff from the production staff?
Leadership and communication matter more than ever. While liquidity remains the mantra, no factory can succeed without motivated employees. Shop floor attendance is dropping, depending upon the proximity to COVID-19 “hot spots” and, more important, the leadership's success in engaging with employees. We have already observed a 25% average drop in attendance at many suppliers.
On the other hand, Click Bond CEO Karl Hutter reports little impact and is even expecting a record month. He set up a mission control office early and deployed an intranet system to communicate with employees. He calls this a “high-fidelity single source of truth about our people and our operations.” Another innovation is mobile check-in/check-out for employees at each building, allowing for a quick triage if necessary. The CEO of a California forger reports a slight improvement in attendance despite the COVID-19 outbreak in the state, owing to “honest communication and employees taking pride in working at a designated critical service.”
The terms “critical infrastructure” and “essential business” have been thrown around without much explanation, sowing confusion among suppliers. Marotta Controls CEO Patrick Marotta took the lead in calming his suppliers. “Suppliers were especially appreciative when we communicated the [Defense and Homeland Security] memos classifying the defense industrial base as critical infrastructure,” Marotta said.
Lean enables social distancing. Plants with a deeper lean culture have already implemented manufacturing cells. Lean enables operators to run multiple machines in their dedicated cells with minimal interaction with other areas.
Consider Woodward's new plant in Rockford, Illinois, where instead of a large furnace, self-contained cells are situated with right-size furnaces. This design eliminates all unnecessary material and personnel movement at a shared service such as a large furnace. Additionally, closed-loop quality control preempts back-and-forth between inspectors and machinists.
Technology is a friend. Protolabs in Minnesota is a great example of digital manufacturing. Plants with lights-out machining capability can scale the technology across all shifts, filling in for absent employees. Machine monitoring and the Internet of Things are especially helpful for remote support staff. Shops with a higher degree of automation will obviously see less of an attendance impact. Data analytics dashboards are a great enabler for remote production meetings.
An OEM told us its supply chain organization was fully prepared to work remotely since its business continuity plan called for a system for executing and monitoring remote activities. A Tier 1 told us about a recent investment in information technology systems that is now paying off handsomely for remote operations.
Now is an opportunity to catch up and come out stronger. The industry will find a way, says Nycote President Marcie Simpson. She is “impressed with the level of communication and transparency. . . . It seems as though everyone is innovating ways to ensure supply chain continuity.”
The best-case scenario is that industry comes out of this crisis in about 12 months with moderately reduced demand and the Boeing 737 MAX back in service. The supply chain will then be functioning better, because the intervening period will have been used to catch up on past issues. For example, the engine supply chain can wrinkle out the kinks that have hobbled engine manufacturers. They can use the respite to address the early shop visit issues and develop much-needed repairs for new engines. Lower tiers would be well-advised to use this time to focus on operational excellence and technology implementation.
Vivek Saxena is the managing director at Advisory Aerospace OSC, a consultancy focused on operations and supply chain.
https://aviationweek.com/aerospace/manufacturing-supply-chain/opinion-aerospace-manufacturing-time-covid-19
