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There’s a lot happening in A&D right now. While public focus will likely always remain on large organizations—Boeing, Airbus, Raytheon, and more—the ears of executives leading tier 3, 2, and 1 suppliers must be burning. Nearly all of today’s large A&D OEMs are looking to the supplier network to identify areas for improvement, and it’s putting pressure on those organizations to make serious improvements in quality management and compliance capabilities.
In this post, we’ll discuss the current state of the A&D industry, and also look into the efforts today’s leading suppliers are taking to demonstrate superior quality and compliance and ensure contracts continue to be won in 2014 and beyond.
It’s no surprise A&D is experiencing major change. As reported in PwC’s “Aerospace & Defense 2013 Year in Review and 2014 Forecast,” the Aerospace sector had its best year yet in 2013, which was driven by a surge in commercial aviation. The Defense sector’s performance was significantly less astounding—even a bit concerning—due to the $40 billion defense budget cuts that took effect in March 2013.
While success in Aerospace clearly stood out over the Defense sector’s performance, what’s remained consistent between the two is the increased focus on performance in the supplier network. Both sectors leverage supplier networks often extending into the thousands, and for a variety of reasons—cost, regulations, and more—both are becoming more and more discerning of which suppliers are being contracted.
With pressures to perform poised to only becoming more burdensome for A&D suppliers, the shortcomings of traditional methods for communicating and collaborating with downstream partners on quality and compliance issues are surfacing. Traditional, manual methods for sharing key intelligence such as audit information, as-built data, statistical process control data, traceability records, and so on are not only inefficient, they also introduce a number of risks.
Upstream selectivity continues to become common in A&D, and what’s emerging as a critical success factor for suppliers is having a robust and auditable quality management system. It will be those suppliers that can demonstrate the ability to meet regulatory compliance, mitigate the risk of cybersecurity threats as well as counterfeiting, and deliver on commitments that will win business in the future.
With increased pressures to meet expectations, many suppliers are leaving outdated manual processes and technologies behind. The Enterprise Quality Management Software (EQMS) category has gained notoriety in the past several years for its ability to create integrated quality and compliance by streamlining key processes and is emerging as the new standard. Most solutions are designed with these industry challenges in mind.
While the technology is quite versatile, some of the key aspects that are driving improved quality and compliance for A&D suppliers are:
Although financial limitations have made it difficult for relatively smaller suppliers to make such an investment in the past, the rising use of cloud-based technology has made integrated quality and compliance more of an option and even leveled the playing field in many respects. Backed by the benefits of flexibility in pricing and user experience and improved time-to-value, cloud-based EQMS is increasingly becoming the solution for meeting stringent quality and compliance expectations in A&D.
Although EQMS may help A&D suppliers meet quality and compliance expectations, there’s certainly an opportunity to leverage it to exceed them. EQMS can drive sustainable performance improvements over time and be used to even carve out a competitive advantage. We discuss this in depth in our recent eBook, “Driving Quality and Profit with Compliance: Success Strategies for A&D Suppliers.” It covers the specifics on what A&D suppliers must do to remain competitive now and into the future.