Most of us in the aerospace supply chain are making preparations for the increased workload forecast in the coming years; however, it is difficult to sort through the information and predictions regarding the ramp up ahead. Will it end up being a steady increase of work or will it hit us abruptly?
The Ramp Up is driven by the market demand for more fuel efficient airframes and engines. How rapidly can this actually occur? The aerospace prime manufacturers are expediting the time it normally takes to go to full production from recent benchmarks like the Boeing 787 and the Airbus A380, which took 7-10 years to an unprecedented 3-5 years. It takes time to bring these high technology amazing new aircraft and engines to market. Design development, numerous static and flight tests are required before product is released to full production. It usually takes much longer than predicted or expected.
Timing of each supplier’s preparation depends of course on the type of product they produce, but is going to be critical to each one’s success. When to capitalize and have the equipment in position for the ramp up is one critical question. It takes months to have equipment built, delivered and implemented for production. It depends on the complexity of the equipment, in our product, anywhere from 8 to 18 months before realization on investment.
The second critical question is when to hire the additional workforce. In our product, it takes anywhere from 4 to 8 months to train a worker to full capability on a new piece of equipment. Each supplier needs to factor in the time it will take to educate the new workforce.
With such a huge pending Ramp Up in the aerospace market one might say supplier’s concern about capitalization and new people is a moot point, since “it’s around the corner”.
Meanwhile, a looming concern for companies in the aerospace supply chain is the faster than expected phase out of Legacy programs before new growth platforms have had a chance to mature and fill the production gap. Originally, existing Legacy programs were forecast to have a much more gradual sloping “tail”, which would have meshed well with the upswing of the next generation programs. Instead, a relatively weak global economy, and the promise of greater fuel efficiency, has lead many commercial airlines around the world to delay purchases. At the same time, budget pressures in the United States and pending sequestration cuts have put a crimp on purchases of aging but still core military platforms. This confluence of factors has created a larger than expected production gap in the aerospace market, and left companies in the supply chain struggling to keep a foot in both segments of the market as we wait for the next generation of technology to eventually bridge the gap.
So if you are in the supply chain being urged by your customers to add capacity in preparation for the ramp up you better understand what the ramp up will actually look like rather than go by what is forecast. You don’t want to be caught flat footed, but you don’t want to be staring at idle people and equipment while you are waiting for the work to trickle through the supply chain.
Each supplier will determine when they will capitalize and hire new workers based on what they see in their crystal ball. Remember an airplane or engine can only be built as fast as the slowest suppliers….and no supplier wants to be that!