Supply Chain Strategies in Aerospace Industry: Assessment of Approaches to Increase the Competitiveness and Profitability in a Global Environment

Abstract

This master’s thesis outlines an opportunity for research in the area of supply chain management in aerospace industry. Based on free accessible data, the focus of this thesis is laid on identifying and discussing current management approaches in the field of long range composite aircraft to improve the competitiveness and profitability. Supply chain management in modern aerospace manufacturing industry is a field which gained rapidly influence amongst practitioners in the last decade. The market leading companies in this field - Airbus and Boeing - introduced new supply chain management strategies for the development/ manufacturing of their new long range composite aircraft programs Airbus A350 XWB and Boeing 787 Dreamliner. These new aircraft programs promise improvements in efficiency and passenger comfort by utilizing the advantages of carbon fibre materials and applying more efficient power plants. Airbus and Boeing decided to outsource about 70 percent of the development and manufacturing work to decrease cost and to share risks. However, analysing their strategies deeper uncovers questions concerning the rationality of the current trend in aerospace supply chain management which is indicated by increasing outsourcing and offshoring activities: Is offshoring a suitable approach for developing emerging markets? Are suppliers capable to provide aircraft components? Is it reasonable to ship components over long distances? What are the social and environmental consequences in the long term? These questions lead to reconsider the current trend in aerospace supply chain management. However, industry sectors such as the heavy machine industry outpaced offshoring and are starting to reshore manufacturing capacities. In the long run, re-localisation with focus on a collaborative approach towards suppliers could be a suitable development for the companies Airbus and Boeing as well to increase their long-term performance.