The aerospace industry, still reeling from the pandemic’s impact, has found itself struggling to keep pace with demand. Labor shortages, supply chain disruptions, and escalating costs have hindered the recovery. McKinsey reports that by December 2023, demand had returned to 97% of pre-pandemic levels, but with around 15,700 aircraft on backorder, it would take over a decade to meet this demand at 2023 production rates. This has created significant pressure on the supply chain, and the challenges don’t stop there.
According to Deloitte, the aerospace and defense (A&D) industry is further constrained by geopolitical issues, shifting market demand, and increasingly stringent sustainability regulations. From advanced propulsion technologies to sustainable fuels, the future of aerospace hinges on companies being able to innovate while overcoming these supply chain bottlenecks. With 33% of late deliveries attributed to end-customer challenges—such as changes in schedules or engineering issues—the aerospace sector finds itself in a fragile state.
In addition to these challenges, Reuters reports that parts shortages, extended lead times, and price inflation have further stressed the supply chain, with recovery potentially taking up to two years.
Boeing’s Struggles and Their Ripple Effect
Just as the supply chain began stabilizing, Boeing’s wave of quality issues has thrown the industry into further turmoil. Deliveries in early 2024 were the lowest since mid-2021, with the FAA capping Boeing’s narrowbody output at 38 jets per month until quality issues are resolved. While Boeing struggles to meet demand, Airbus is gaining ground despite facing its own engine inspection challenges with Pratt & Whitney.
Boeing’s production problems don’t just affect Boeing—they have a cascading impact on the entire aerospace supply chain. Suppliers, who have scaled up their operations to support Boeing’s aggressive ramp-up plans, now find themselves at risk of being left with excess inventory and commitments. Once Boeing’s issues are resolved, suppliers will be pressured to ramp up from near-idle levels to full capacity almost overnight.
With Boeing aiming to reach 57 aircraft per month by Q3 2025, suppliers must prepare for this sudden demand surge while managing existing shortages. Navigating this turbulent environment requires strategic planning and agility, and that’s where Value Driven Solutions (VDS) excels.
How Value Driven Solutions Optimizes the Aerospace Supply Chain
As the aerospace supply chain struggles to regain stability, Value Driven Solutions (VDS) stands out as the premier provider in optimizing end-to-end supply chain performance for the aerospace industry. With decades of experience, VDS specializes in helping businesses not only navigate today’s challenges but also future proof their operations for long-term success. Here's why VDS is the trusted partner for aerospace companies facing supply chain disruptions:
Comprehensive Supply Chain Optimization: VDS’s proprietary Value Driven Approach® is designed to deliver fast, measurable results by identifying hidden sources of value in supply chain operations. VDS Experts conduct thorough assessments of current-state processes, utilizing predictive analytics and data-driven strategies to unlock significant savings. Whether it’s reducing lead times, cutting transportation costs, or streamlining material procurement, VDS helps clients uncover millions in cost savings while improving overall responsiveness.
Strategic Sales Inventory Operations Planning (SIOP): In today’s volatile environment, aligning supply with demand is crucial. VDS implements Sales Inventory Operations Planning (SIOP) to give companies the visibility and insights needed to make informed, proactive decisions. SIOP not only balances distribution, manufacturing, and procurement operations but also fosters cross-functional collaboration between suppliers and customers. This alignment is critical for managing production schedules and addressing demand fluctuations with agility.
Production Planning and Continuous Improvement: Efficiency is key in aerospace production, and VDS helps companies optimize each stage of the manufacturing process. Through a combination of tactical planning and operational improvements, VDS ensures companies can meet demand forecasts while managing capacity constraints and material availability. Additionally, VDS experts guide clients in adopting continuous improvement initiatives that enhance work processes, reduce waste, and drive ongoing efficiency gains.
Expertise in Handling Complex Supply Chain Challenges: From addressing Boeing’s production issues to resolving parts shortages, VDS has the expertise to tackle the most complex supply chain challenges. With a focus on ensuring quality systems are intact, VDS helps companies return to the basics of process discipline, talent development, and proactive customer engagement. By leveraging advanced technologies and ERP systems, VDS ensures aerospace companies are equipped to handle both current disruptions and future demands.
Innovation as a Strategic Imperative: VDS recognizes that innovation is not just a luxury in aerospace—it’s a necessity. To stay ahead of the competition, VDS encourages clients to invest in research and development, trial new materials, and explore advanced manufacturing techniques. By prioritizing innovation, aerospace companies can not only survive but thrive in this rapidly evolving industry.
Proven Performance and Lasting Results
At VDS, the focus is on delivering rapid and sustainable performance improvements. Whether it’s optimizing supply chain costs, enhancing manufacturing productivity, or improving asset utilization, VDS’s tailored solutions are designed to create visible results in the short term and sustainable growth in the long term.
For aerospace companies dealing with fragile supply chains, VDS offers a path forward. With expertise in sourcing, procurement, logistics, and operations, VDS ensures that every aspect of your business is fine-tuned to meet today’s challenges while positioning you for future success.
Conclusion
The aerospace supply chain may be in a fragile state, but with the right partner, businesses can overcome these challenges and emerge stronger than ever. Value Driven Solutions provides the tools, strategies, and expertise necessary to optimize the end-to-end supply chain, reduce costs, and improve operational efficiency. With a focus on quality, innovation, and continuous improvement, VDS helps aerospace companies navigate the complexities of today’s market and secure a competitive advantage for the future. Whether you’re struggling with parts shortages, production delays, or rising costs, VDS has the solutions to help you succeed.
Contact us today:
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Supply Chain & Operations → VDS Consulting (vdsconsultinggroup.com)
Aerospace & Defense → VDS Consulting (vdsconsultinggroup.com)
