TREMORS IN THE SUPPLY CHAIN: A precursor of “the big one?”

The performance of the aviation supply chain has not been as robust as it should be in 2018, with airplanes on the ground with no engines in Toulouse, Renton, and even Charleston being the symptoms of some deeper issues.  Those deeper issues impact the industry’s ability to absorb and manage substantial technology change while at the same time ramping up production to record levels.  Changing relationships between the OEMs and suppliers, margin pressures being passed through from airlines to OEMs to suppliers, and a push by OEMs to recapture aftermarket and services revenues from suppliers are all impacting suppliers as the industry continues to evolve.  

The net result from these pressures, which are reshaping the nature of the supply chain and relationships between customers, OEMs across the supply chain, is that airplanes aren’t being built at planned rates at Airbus and Boeing for both narrow-body (A320, A220, and 737) and wide-body (787) aircraft.