From regulatory compliance to profitability, A&D companies are facing a multitude of pressures. Stakeholders, governing bodies, and even the general public—in one way or another—are demanding improved performance. Although there’s no quick-fix approach, in an industry where the deep supplier network is debatably more complex than the final product, many executives are looking upstream to identify those improvements to supplier network complexities.
Specifically, in both our qualitative and quantitative research, at LNS Research we’re seeing an increased focus on improving the connection between manufacturing quality and supplier quality. Manufacturers must be able to develop strong relationships with the sometimes thousands of upstream partners. But efforts have to extend beyond that. Those that can gain visibility into and collaboration with those operations are the ones able to meet expectations while making sustainable performance improvements over time.
This post will discuss what market leaders are doing to facilitate this upstream connection, and how many A&D organizations are turning supplier quality management capabilities into a source of competitive advantage.
Quality Disconnect and the Complex Supplier Network
It is advancements to technology that are helping solve supplier quality challenges and assuage these cost and compliance pressures. But before getting into that it’s important to take a step back and discuss the roots of disconnect between suppliers and A&D manufacturers in the first place. And to do that we can take a look at data from our recent quality management survey, which included more than 500 executives and senior leaders.
When asked about their top quality management challenges (they were instructed to choose up to three), respondents from A&D reported two that stuck out: 60% said “quality metrics are not effectively measured” and 51% said “disparate quality systems and data sources.” Whether from past technological limitations or shortsighted and siloed IT investment decisions, these challenges indicate A&D organizations large and small are dealing with an incomplete view of quality.
In an industry where product quality issues can have potentially catastrophic impacts to financial performance and reputation, this incomplete view of quality surfaces a number of concerns—especially ones originating in the supplier network. And with increased pressures to meet regulatory compliance and customer expectations as well as to reduce costs, it comes with little surprise we’re seeing an increased focus in A&D on strengthening those upstream quality connections.
Moving to the Next Generation of Supplier Quality Management
Not all that long ago, supplier quality management solutions were primarily homegrown and manual in nature. Many forward-thinking organizations would (and in many cases still do) use email, FTP, or cloud-based content management solutions for communicating and collaborating with hundreds or thousands of suppliers. Although this provided some level of visibility and interaction, in many ways it amplified the disconnected environment many A&D companies face.
Today, however, next-generation supplier quality management capabilities are helping to break down these silos. Delivered in many cases via web-based portals as an extension of the existing manufacturing operations software footprint of OEMs and larger suppliers, these capabilities are simultaneously simplifying the complexities of the supplier network and compounding the ability to improve upstream quality.
With the ability to communicate and collaborate on a common web-based portal, many large A&D organizations are extending the efficiencies of internal compliance, quality, and traceability technology to upstream partners. This provides an opportunity for streamlining critical intelligence in areas like audits, corrective actions, real-time performance, part and component genealogy records, and so on.
This next-generation solution delivered via the web takes supplier quality management to new heights, delivering a level of standardized and in-depth intelligence to downstream A&D organizations that was previously not possible without major investment. These portals are improving relationships and facilitating data-backed decisions, and proving critical to bridging the gap between internal operational quality and the growing storm of activity upstream.
The complexities of supplier networks alongside the parts and components sourced from those networks in A&D are only poised to become more difficult to manage with traditional strategies and technologies. And there’s a quickly emerging impetus to determine not only how but when today’s major A&D organizations are going to take advantage of these next-generation capabilities.
Taking Supplier Quality Improvements Into Your Own Hands
As the breadth, depth, and complexity of supply chains serving manufacturing continue to proliferate, there is widespread awareness of how challenging these ecosystems are to manage with today’s technology. There’s far less awareness and actionable insight into how next-generation supplier quality capabilities can make a contribution—which is why we’ve recently published the report “Driving Operational Performance in A&D with Supplier Quality Management.” The report discusses the connection between supplier and operational quality, and how leading organizations are improving the rate of successful new product introductions, reducing risk, and meeting regulatory compliance, all while driving down costs. You can download a free copy of the report here (no opt-in).
Bottom Line: Better orchestration of complex supply chains and networks begins with a common foundation of scalable, easily understood analytics and quality reporting. Having this system in place can accelerate manufacturers to achieve their most challenging compliance and quality management objective.
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