Doing business in the Aerospace and Defense (A&D) sector poses additional challenges to a manufacturer beyond what companies face in other markets. They have stringent reporting requirements, often they are held to a higher standard of quality and reliability, and there is continual focus on efficiency and cost cutting. Engineering and product lifecycle management demands tend to be extraordinary and there is usually a strong need for full traceability through the life of the product.
This series discusses some important considerations for A&D manufacturers in the context of enterprise information systems and how they can help in addressing five important areas of concern—compliance, control, communications, competitiveness and cutting cost, waste and complexity. Enterprise systems are essential tools for running a manufacturing business effectively, but the demands of the A&D market can place demands on system that are not easily addressed by one-size-fits-all products that are not specifically tailored to this environment.
Cre8tive Technology (www.ctnd.com) will be posting a weekly six part series on The Five Cs of Aerospace & Defense Success:
Part 1 The A & D Challenge
Part 2 Compliance
Part 3 Control
Part 4 Communicate
Part 5 Competitiveness
Part 6 Cutting
Cutting
No discussion of manufacturing in the twenty-first century can ignore the realities of a cost-driven environment. Cost cutting is expected, sometimes demanded, and always a part of any process improvement, Lean, or management-oriented program. But blindly cutting costs is risky and often self-defeating. Management must carefully assess the impact of changes made in the name of cost cutting to ensure that these actions will not result in higher costs or other difficulties elsewhere. Cutting inventory is counterproductive if it results in shortages, disrupted production schedules, expensive expediting, and premium freight charges. You have to cut the right inventory (or staff or equipment) so as not to adversely impact performance. Lean programs are well known for their success in this area primarily because all process and procedure changes are well thought out and validated through the structured lean transformation process. Your ERP system can be a key to identifying cost saving opportunities, exploring their impact through simulations and ‘what if’ scenarios, and measuring the results after implementation.
When considering cost, don’t forget the cost of compliance. Extra labor and effort expended on gathering and formatting information for customer reports and accounting purposes is waste by the lean definition—not value adding. Integrated systems with built-in A&D accounting and progress tracking capabilities can significantly cut the cost of compliance by eliminating this waste. Similar arguments can be made in the quality area. System functions can reduce the cost of quality measurement management and reporting.
The third area to consider in the context of ‘cutting’ is cutting complexity. Simpler systems and processes are the most efficient with less non-value-adding effort required. The more integration your systems contain, the less complex your procedures have to be to get everything together for effective management and operations. The more integrated the systems are out-of-the-box, the simpler your IT environment with fewer custom programs, synchronization routines, file transfers, and multiple (duplicate) data sets. Cutting complexity is a very ‘lean’ and a very smart thing to do.
Follow this series and other previous postings on www.ctnd.com/blog/.