Towards More Resilient, Dynamic Aerospace Supply Chains
COVID-19 came to shake well-established supply chains and the Ukraine-Russia conflict further complicated the logistics sector, affecting numerous manufacturing industries including aerospace. To face this situation, adaptability is key to a dynamic and resilient supply chain that can keep the sector moving forward. But, the only way to build these resilient, adaptive supply chains is through collaboration, agree industry experts.
Aerospace clusters in Mexico and abroad are playing an essential role in boosting the recovery of the aerospace industry. Clusters around the world have supported manufacturers, helping them to integrate within supply chains. Academia, OEMs and Tier1 companies have also been allies during this process, leading players to tackle challenges through joint ventures. One of the key factors that have boosted the role of clusters is communication, which will also be essential for future growth in Mexico. "Communication and integration of domestic clusters will be a revolutionary practice for Mexico's aviation sector," said Eugenio Marín, CEO, FUMEC.
Clusters are taking an even more important role in Mexico’s aerospace industry, according to Marín. In previous times, clusters were not as fast to cooperate with each other, which reduced the value they brought to the supply chain. Now, clusters are working together to get and train talent to remain prepared for the demands of foreign companies that want to invest in Mexico.
Collaboration is the name of the game, said Alberto Robles, Strategic Supply Chain Manager, General Electric Aviation. In the past, aerospace was not considered to be essential so the sector focused on lobbying to advocate for the industry. Through more strategic partnerships among industry clusters and FEMIA, the industry is gradually removing the obstacles to help the industry keep moving forward. “We need to work closer with our allies. We are competing with emerging regions in the world and we ought to start looking for opportunities,” said Robles.
Meanwhile, more aggressive strategies are being implemented while supply chains are being diversified to avoid shortages. Moreover, some companies are starting to incorporate new materials and rely more on technology. “We are busier now, have good financial planning and we have shifted to digitalization,” said Roberto Corral, President, Innocentro. For the acceleration of adaptability, technology was crucial. This has been a huge leap for companies, which are now pouring investment into tech, said Marín.
The experience of all actors during the pandemic varied widely, as did their adaptation strategies. Innocentro, for example, became a hybrid company to have a broader reach while keeping in touch with employees. During this period, the company also embraced new work models that allowed employees to increase productivity and satisfaction. “Becoming a hybrid company helped our team stay motivated and continue posting brilliant results. We thought that if the company helped its employees work better from home, this work model could turn into an asset,” said Corral.
Small and medium-sized enterprises (SMEs) underwent a more challenging process. SMEs faced a disproportionate challenge in adapting their processes and only those that have moved with agility have survived. “SMEs underwent quite a journey. It is important to recognize those who thrived through this period of uncertainty. We did not know what was coming or how long it would take to pass. As a manufacturing company, the recovery has come with a lot of challenges such as the political global context,” said Jatziri Barrios, Director Turboparts Specialists, ETU-Aerospace.
Although the sector is recovering, companies must implement strategies to build more resilient supply chains that can handle future shocks. Supply chains must be prepared to endure highly disruptive events and quickly recover. “Creating a resilient supply chain is like acquiring an insurance policy: it represents a cost but it is better to have it and not need it than to need it and not have it,” said Robles.
Transparency and information sharing throughout the supply chain are immediate actions companies can implement to mitigate hidden risks. They should also diversify their supply portfolio, create and protect supply networks and develop business continuity plans. Moreover, organizations must be immersed in forecasting and consider all the upcoming challenges. “What if?” questions should be answered to avert catastrophic outcomes. Mexico, in particular, must start investing in advanced manufacturing. “We must look at the future and work towards that,” said Robles.
As the COVID-19 havoc is not over yet, the sector must be prepared. “The pandemic is not over; we need to be ready for another outbreak. Moreover, the Ukraine war has destabilized operations. Mexico needs to be ready and develop its capabilities. The country has an opportunity to join the big leagues if we work together to close gaps and invest in innovation and technology,” said Barrios.