It’s a good time to be in aerospace and defense. The outlook is positive for the next four to five years, according to Deloitte’s 2018 Global Aerospace and Defense Industry Outlook,

But, there are still major challenges facing this sector. Let’s look at the top five challenges A&D manufacturers face, as identified in a report from Ernst and Young.

  1. Volatility in the geopolitical and economic environment—The performance of global companies, like those in A&D, is tied closely to economic growth and political stability. No growth and stability in the world, no growth in the A&D sector. With the threat of tariffs on imported metals and other goods, Brexit and instability in European financial markets, and signs of slowing growth in China, there’s a real threat that geopolitical and economic tides may be ready to turn. There’s not much an A&D manufacturer can do to offset these risks, other than stay informed and operate as efficiently as possible.
  2. Managing the supply chain—With enormous supply chains can come enormous headaches. To offset these issues, A&D manufacturers need to create smarter supply chains—supply chains that are highly interconnected and deeply collaborative. With an interconnected, collaborative supply chain, A&D manufacturers can view their own parts inventory and the inventory of their suppliers in real-time, to avoid nasty surprises and possible production shutdowns.
  3. Competition in domestic and international markets—The big players just keep getting bigger and driving harder bargains. To compete effectively, A&D manufacturers need to keep their supply chains operating efficiently and collaboratively. In a collaborative environment, A&D manufacturers and suppliers can help drive out waste, maintain the optimum inventory of incoming materials and parts, and more effectively forecast need—all of which can help with cost containment efforts and staying competitive.
  4. Managing and retaining talent—A highly engaged, talented workforce can help A&D manufacturers gain an edge. Competition can be tough for workers with the right technical skills and clearances. To make it a little easier to attract talent, broaden your pool of candidates—cloud-based technology allows staffers to work from anywhere, at any time. And be sure to give valuable employees opportunities to collaborate, innovate, and advance—all of which help improve job satisfaction.
  5. Performing on key contracts—Delays, setbacks, product failures, and cost overruns can ruin an A&D manufacturer’s brand and financial viability. The keys here are building in quality from the ground up and establishing a smarter, more collaborative supply chain.  Everyone in the supply chain needs to work together to reduce informational silos, establish one accurate version of the truth, and share accurate information in real-time. A cloud-based supplier portal gives both manufacturers and suppliers the visibility, security, and traceability they need to improve quality, cut costs, strengthen their relationships, and deliver on key contracts.

Find out more about how a cloud-based supplier portal can help address these challenges.