Lack of capacity planning is adding to the ramp-up challenge, report reveals


A lack of capacity planning is adding to the ramp-up challenge for many aerospace and defence (A&D) manufacturers as they strive to meet the ambitious production rate increases set by aircraft maker, Airbus, according to a report published by management consultancy Vendigital.

Airbus first announced plans to ramp up its popular A320 programme in November 2021 and some manufacturers were unsure whether it would be possible to meet this level of demand, particularly as many were still suffering the after-effects of the pandemic shutdowns, which had left them with depleted resources and a lack of skilled labour. With the rate increases firmly underway, A&D manufacturers know that more challenges lie ahead as Airbus moves closer to its target to make 75 jets per month by 2025.

To learn more about how the industry is coping with the rate ramp up, Vendigital has delivered a rate readiness assessment project within the A&D manufacturing supply chain, comprising more than 100 suppliers based in Asia, Europe and the US. The assessments carried out revealed that more than a third of suppliers - 38% - had inadequate processes for capacity planning. Without urgent attention, this could cause them to get left behind and potentially lose market share.

Paul Adams, director and A&D sector specialist at management consultancy, Vendigital, said:

“We know that the rate ramp up has been challenging for manufacturers across the supply chain. The project we carried out provided  an under-the-bonnet assessment of how the industry is coping with the rate increases and it is clear that a lack of focus on capacity planning is holding some businesses back.”

The suppliers that undertook the rate readiness assessment were facing a steep ramp-up challenge, as their upstream customer was looking to increase production output,  sometimes in a matter of weeks. The upstream customer had itself completed a comprehensive review of its internal processes with the aim of optimising operational efficiency. The report warns that any manufacturer planning to undertake a rate readiness assessment should look both inwardly and outwardly.

Paul Adams said: “It’s easy to think that meeting the ramp-up challenge depends solely on the readiness of suppliers. While this is important, there is no point investing resources in strengthening supply relationships and building in extra capacity if your own processes are underperforming. To be truly collaborative, each business must look both inwardly and outwardly, and data is key to this.”

The lack of focus on capacity planning identified within the supply chain was primarily due to a lack of skills. Many A&D manufacturers are still operating with a depleted skills base, which they have not yet managed to rebuild in the wake of pandemic-related disruption. In some instances, it was found that a lack of knowledge about key plant and machinery, and lapsed maintenance programmes were making it difficult to predict production output reliably. In other instances, even if capacity planning was taking place at a senior level, a lack of focus on communication and process efficiency was preventing the message from reaching the production floor.

Adams commented: “Ramping up is always a time of heightened risk for any manufacturer, not least those with complex, global supply chains. For those that succeed, there are potential rewards – opportunities to strengthen customer relationships, differentiate products and services and increase market share.”

While less marked than the lack of capacity planning, other supply-side deficiencies were identified during the rate readiness assessment. These included challenges accessing skilled labour, difficulties sourcing raw materials and components, substandard production tooling and equipment, and issues with operational efficiency.

The report provides advice for A&D manufacturers across the supply chain on steps they can take to assess their own ramp-up readiness. The first step is to find out more about what the demand curve looks like and over what timeframe, and should be followed by a detailed assessment of individual suppliers and a prioritisation process to identify where additional support might be required.

Building relationships and moving to a more collaborative way of working with suppliers and information sharing can also help to minimise risk and prepare the way for the rate increase. Other steps include preparing an action plan, working together to develop the skills base where needed and reviewing progress regularly to ensure continuous improvements are being made.

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