NEW YORK, 9 Feb. 2012. PwC analysts—having released “Mission Control,” a quarterly analysis of activity in the global mil/aero sector—anticipate that a high production rate ramp-up may be needed across much of the aerospace and defense sector in 2012 and beyond. “Managing risk in the supply chain will likely become more important in commercial aerospace where the industry operating model has pushed much of the design and manufacturing work to suppliers, often in the form of risk sharing partnerships,” says a PwC spokesperson.
One-fifth (21 percent) of suppliers are prepared to support the high ramp-up required in the next five years, according to PwC analysis of the potential capacity risks in the aerospace supply chain. Companies in the aerospace sector are generally alert to the need to proactively identify, prevent, and manage supply chain risk; however, in many cases, current approaches to supply chain risk management are either too complex or too simple, leaving companies vulnerable to issues, according to the findings.
"Companies need a practical yet comprehensive method to identify rate readiness risks in the aerospace and defense supply chain," says Scott Thompson, U.S. aerospace and defense leader at PwC. "In the majority of cases, supplier transformation to address risks can take place without the need for any M&A. But, in some cases, consolidation either within the supply chain or vertical integration of the supplier with the aircraft manufacturer should not be ruled out."