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Supply Chain Strategies for Automotive, Aerospace & Defense Industries

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The Automotive, Aerospace and (to a lesser extent) Defense industries are undergoing massive globalization.

They are in various stages of transformation from a regional/local model to a global model in which the buying, making, moving, and selling activities could happen anywhere in the world. To thrive in today’s globalized environment, AA&D companies are reexamining their supply chain processes and their supporting technology.

In Search of Supply Chain Improvements

Aberdeen benchmark results show that supply chain management processes and technologies are being actively re-evaluated by AA&D industry companies today. Fully 76% of companies have delivered to or been asked to deliver to management recommendations on how to improve their supply chain management technology in the past six months. And 79% of companies are looking to improve their supply chain management processes

Struggling with Incomplete Supply Chain Management Automation

Aberdeen research finds that 76% of the companies surveyed do not have full supply chain process automation and a common system company-wide. Only 24% of companies have supply chain processes that are fully automated with either different systems or common systems across their company.

Best in Class companies are:
• 3X less likely to have manual or spreadsheet intensive supply chain processes
• 2X more likely to have standardized on a common, company-wide supply chain platform

Spending Plans

Overall, 85% of companies surveyed plan to spend some money in 2007 for supply chain technology initiatives. Fully 73% of companies with revenue of over USD$1 billion plan to spend more than $250,000 in 2007 for new supply chain technology projects.

Partnering with Packaged Software Vendors for Innovation

Nearly three out of 10 AA&D companies are seeking to partner with their ERP vendor or best of breed supply chain vendor to create net new innovations for supply chain. This compares to 19% that are looking to create innovations through custom-developed or inhouse development. The rest of respondents are looking to catch up to the industry average or adopt already established best practices for supply chain.

SCM Visibility Top Actions Aberdeen

Recommendations for Action
Given the nature of complex business requirements within the automotive, aerospace and defense industries, companies should investigate enterprise applications that are flexible enough to adapt to different company business requirements through usage of Service Oriented Architecture. Master Data Management should also be looked at carefully. These innovations are making packaged application-based supply chain platforms a viable path for AA&D companies.

Download full white paper below.

Last modified on Tuesday, 02 October 2012 09:29

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