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By Bill Lewandowski, AIA Vice President, Supplier Management It should be very heartening for all U.S. aerospace and defense suppliers to read the 2006 Top-Performing Companies study featured in the July 10 edition of Aviation Week & Space Technology magazine. "General Dynamics Corp., Lockheed Martin Corp. and Northrop Grumman Corp. ranked first, second and third, respectively ... Raytheon also proved robust, as has Boeing since 2003 ... Moreover, the fact that General Dynamics, Lockheed Martin, and Northrop Grumman are ranked at the top, with Raytheon and Boeing coming on strong, has profound implications ... And momentum is building, which almost certainly will be reflected in future Top-Performing Companies studies." These results have occurred despite an environment in defense of growing requirements creep generated by program offices and instability of program funding and schedules from year to year as legislated by Congress. Why is this ranking and future performance outlook good for aerospace and defense suppliers? The aftermath of 9/11 reverberated throughout the aerospace industry. Suppliers rely on the success of their customers for their own success. When the airlines stopped buying new airplanes after the catastrophic events of September 2001, numerous suppliers who relied heavily on that market went out of business. The Aviation Week study affirms that aerospace and defense companies that are successful, top performers in delivering products to customers are supported in managing their businesses by successful, top performers in the industry's supplier base. That's because evolution and trends in the industry have resulted in more than 70 percent of the value-add to final products coming from the aerospace and defense supply base. This dependence on the supply base and the success of the top performers should mean that suppliers who are supporting these companies' products are enjoying their customers' success. And, for the most part, they are. If aerospace and defense suppliers are not seeing success in their businesses today, they are doing something wrong. This study should be a real eye opener. There has not been a better time in recent history for industry suppliers. With today's increased defense budgets and the recovery of the civil aviation market, abundant opportunities are out there and can be taken advantage of now — if suppliers want to be part of the future of the aerospace and defense industry. It also behooves AIA associate members to participate in the events of the Supplier Management Council to network, to get the information necessary to be part of the future of the industry, and to actively improve the industry. As the Aviation Week report on the study points out: "...even today's top-performing companies can ill afford to take current positions for granted, no matter how secure they may seem ... Increasing globalization, talent management and striking the right balance between short- and long-term goals will continue to challenge management throughout the airline and aerospace industries." (Editor's note: A suppliers' perspective of the Top-Performing Companies study was provided to Aviation Week by AIA's Bill Lewandowski.) SMC Welcomes Newest Associate Members
Torotel Products Inc. Rubbercraft As of September 1, 2006, AIA has 106 regular member and 178 associate member companies. Mark Your Calendars 2006 Associate Member/SMC Events
Farnborough 2006 Opened Doors for Global Cooperation The Supplier Management Council, as in previous years, organized various meetings, luncheons, and dinners to benefit AIA associate members at Farnborough. AIA member companies, such as Raytheon Company, General Electric Company, The Boeing Company, and Kaman Aerospace Corporation, supported the SMC as well by hosting suppliers in various venues. Highlights included:
As the council and AIA prepare for the 2007 Paris Air Show, members are urged to pass along any comments on how our service offerings can be improved for next year's event. SPECIAL THANKS – We Couldn't Have Done It Without You Vince Hrenak, SMC chairman and vice president of supply chain, Raytheon Company, as usual went beyond the call of duty to spearhead the SMC mission at Farnborough. Vince kindly hosted a large luncheon in the Raytheon chalet as well as gave a well-received presentation on "Doing Business with Raytheon." Thanks, as well, to all those key members below who helped make Farnborough 2006 a smashing success for the SMC: Dan Korte, Vice President, Supplier Management and Procurement, The Boeing Company. Bob Gower, Vice President, Supplier Operations, The Boeing Company. Mike Chanatry, General Manager, Global Sourcing, General Electric Company. Bill Brown, Vice President, Subcontracting and Business Development, Kaman Aerospace Corporation. SMC Will Lead Aerospace Trade Mission to India AIA's Supplier Management Council is in the final planning stages for an Aerospace Trade Mission to India December 2-7. The purpose is to meet with Indian government and defense officials about opportunities in aerospace, learn about Indian markets, and have one-on-one meetings with Indian supply base companies for potential collaborations. India holds much promise in the coming years as one of the largest purchasers of civil and defense equipment. If you are interested in being a part of this first-ever SMC trade mission, contact varun.nikore@aia-aerospace.org. |
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