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Currently there is a geopolitical scenario that impacts the global supply chain through the shortage of raw materials, conflicts, and the aftermath of Covid-19, companies also need to contend with the skills shortage, sustainability measures, and technological advancements to meet demand. There are reasons to be positive as WEAF considers the future proofing of the supply chain and looks at some of the solutions.
Firstly, there is the newly-established Aero Excellence™ International association. This initiative seeks to bolster supply chain resilience by implementing a new and universal standard for operational excellence, sustainability, and cyber security within the aerospace, defence, and space sectors.
The new standardised assessment, Aero Excellence™, evaluates supply chain performance across countries by recognising supplier industrial maturity through a categorisation system of bronze, silver, and gold. This initiative aims to encourage efficiency, productivity, and competitiveness; thereby stabilising the supply chain through transparency and collaboration.
Colin Turner, WEAF CEO, commented: “WEAF welcomes the announcement on Aero Excellence International and the initiative’s commitment to building upon the successes achieved in collaboration with SC21 and Supply Chain Solutions (SCS). We are pleased to see the emphasis on strengthening the supply chain, which will pave the way for future growth and innovation. Throughout 2025, WEAF is dedicated to collaborating with our members, partners, and stakeholders to ensure the delivery of Aero Excellence™ whilst continuing our focus on SC21 and SCS.”
The UK has long invested in SC21 which was designed as an assessment programme. It encourages the competitiveness of the aerospace and defence industries by raising the performance of supply chains.
SC21 is not an auditing process but a continuous improvement process, which establishes a systematic and integrated approach to improvement, with ongoing monitoring. From an internal standpoint, it tracks the progression of improvement initiatives and from an external standpoint it validates progress using an industry recognised assessment framework.
Responding to the skills gap, a recent KPMG report on the Future of Supply Chain, noted that 37% of companies have replaced manual labour with robotics and advanced automation in warehouse operations. However, the report recognised that there needs to be coexistence between digital and humans in the workplace. This might mean that some roles are reinvented to support personal development, it is not about replacement in the context of humans versus robots, but where gaps in recruitment cannot be filled technology can be an alternative.
KPMG stated: “We expect to see many aerospace and defence companies move to a more automated enterprise model that combines robotics and real-time availability of information to drive automated decision-making on a larger scale.”
UK Government has been motivated by recent global events to ensure a focus on UK capabilities and the surrounding supply chain that supports them. This is to ensure resilience, deterrence, and protectionism enabling onshore innovation to deliver exports.
This was recently highlighted in the Defence Industrial Strategy Statement of Intent, the Secretary of State for Defence, John Healey MP commented: “Our defence sector should be an engine for jobs and growth, strengthening our security and economy. That requires a defence industry that is better and more integrated – one that can keep our Armed Forces equipped, innovating at a wartime pace, and ahead of our adversaries.”
Furthermore, the UK Government’s Invest 2035: the UK’s Modern Industrial Strategy drew on the importance of the supply chain more widely. The Strategy commented that business needs confidence in their respective supply chains to prosper. Therefore, there will be the establishment of a new governmental supply chain task force. The task force will analyse those within the supply chain that could be impacted by disruptions and understand how the risks can be tackled to mitigate impact.
Airbus has stated that it has on-site supply chain experts to support operations and a dedicated taskforce to provide foresight and alleviate any impact from the current geopolitical scenarios.
In accordance with management consultant, Roland Berger, which released in June its collaborative report “Aerospace supply chain: Resilience Report 2024” with input from across European industry associations, it found industry is fighting to build-up its resilience.
Some recommendations from the report suggest, and not limited to, ‘buffer storage of critical parts, development of alternative/multiple sources, active constraint monitoring and management.’ In addition, the set-up of an internal task force, something which as forementioned some industry primes are actively doing this.
With this in consideration, the UK Government has also followed-up with a focus on Advanced Manufacturing as a key growth area to feed into the upcoming Industrial Strategy.
The report also notes that increasing advanced manufacturing capabilities helps lessen dependence on imports of essential technologies, many of which have weak supply chains.
However, it states that the UK cannot fully replace all critical good imports with domestic production; increasing manufacturing capacity in key sectors can enhance diversification and supply chain resilience.
Within Invest 2035, the UK Government stressed the importance of Place particularly when it comes to the distribution of investment. A mechanism for funding into the region needs to be enacted, which involves key stakeholders, such as WEAF and other regional aerospace associations respectively, who understand the challenges and opportunities facing primes, SMEs and the supply chain in their areas and have the expertise to support decision-making on growth.
Involving advanced manufacturers in the decision-making process and providing the ability to influence policy is likely to provide strength to the domestic supply chain. This will be aided by the renewed focus on place to help position SMEs and smaller businesses for access to funding.
Whatever the future looks like for the supply chain, WEAF is available to support its members in managing the challenges and opportunities, please reach out enquiries@weaf.co.uk
Sources:
KPMG (2024) The future of supply chain