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THE SUPPLIERS' VOICE: February 2007, Volume 7, No. 3 SMC's 2007 Meeting Agendas Will Focus on Major Supplier Issues
By Bill Lewandowski, AIA Vice President, Supplier Management

For the second consecutive year, the Supplier Management Council is focusing its 2007 meeting agendas on major issues affecting suppliers.

This process began with supplier issues workshops last October at the Fall SMC meeting in Cocoa Beach, Florida. The workshops identified concerns that suppliers were having in their companies, policy issues with government procurement and contracting regulations, and relationships with customers.

The SMC Executive Committee in January reviewed the issues and began developing action plans to address them.

The issues were divided into five supplier categories:
  • Working globally.
  • Continuous improvement and education.
  • Efficient supply chains.
  • Industry trends.
  • Improving the customer-supplier relationship.
At least one issue in each category will be addressed at each 2007 SMC meeting. At the March 19-21 meeting in San Antonio, Texas, the following items will be addressed:
  1. Working globally. Understanding the offset credit process and how U.S. suppliers can fit in.

  2. Continuous improvement and education. The differences and advantages between the Commerce Department's Manufacturing Extension Partnership Program and the Supplier Excellence Alliance.

  3. Efficient Supply Chains. Discussion on material obsolescence issues caused by prime requirements changes. How specialty metals regulation changes affect suppliers.

  4. Industry trends. How suppliers can participate in performance-based logistics and indefinite delivery, indefinite quantity contracts. "Best practices" on controlling insurance costs.
The fifth subject, improving customer-supplier relations, will be addressed in an advisory council session in which suppliers can provide "not-for-attribution" input to a specific prime contractor, suggesting improvements. The aim of this innovative approach is to improve relationships and provide input to that prime. Potential discussion areas can be in the following areas:
  • CAD data requirements and distribution.
  • Long term agreements and cost-reduction initiatives.
  • Contractual and technical requirements flow down.
  • Owner-buyer disconnect.
  • Subcontract administration.
  • Talent retention.
The first supplier advisory council session will be with Raytheon, led by SMC Chairman Emeritus Vince Hrenak, and Boeing, led by the SMC Chairman Bob Gower. Results of the session will determine the future of the concept.



SMC Organizes Suppliers on Trade Mission to India
By Varun Nikore, AIA Director, Supplier Management

Members of AIA's Supplier Management Council completed a first-ever trade mission to India in December, culminating in one-on-one meetings with Indian suppliers in a nation that holds much promise for the United States aerospace industry.

Focused on supplier-to-supplier interactions, 28 participants representing 18 member companies looked to set up possible joint ventures and other agreements with India's suppliers.

Several U.S. primes also attended to expand and diversify their supply bases. Offset obligations are a key reason for exploring emerging markets in which larger aerospace and defense purchases are made.

Although the SMC has taken member companies to the Paris and Farnborough Air Shows for the past seven years, several companies have participated in a number of other marketing events abroad.

The trade mission to India, however, went several steps further by engaging foreign suppliers in an increasingly active way.

Why India?
India was chosen as the focus of the association's first trade mission because it holds much promise in both the civil and defense markets, based on GDP growth of more than 8 percent since 2003.

On the civil side, India has one of the largest aircraft backlogs of any nation in the world. In defense, the nation is on a fast track to upgrade its aircraft fleets. India is expected to purchase more than $10 billion in defense products annually for the next decade.

One of the largest opportunities for U.S. companies is India's impending purchase of 126 multi-role combat aircraft on which Lockheed Martin and Boeing are expected to bid.

Opportunities on both sides are enormous, and suppliers will have a large part to play because the Indian infrastructure can't support the pace of expansion. The estimated 200 to 300 suppliers in the country will undoubtedly have to partner with foreign suppliers to gain knowledge of modern manufacturing processes and methods.

What we accomplished
There were many benefits to the suppliers involved in the trade mission. In New Delhi, suppliers met with key government officials from the Ministry of Defense and External Affairs to hear directly about where both opportunities and impediments lie.

Also, in both New Delhi and Bangalore, AIA members were given important presentations on the dynamics of the Indian procurement system and government operations. Perhaps the most tangible benefits in attending were meeting and networking with current aerospace and defense suppliers as well as taking a tour at India's government-owned prime, Hindustan Aeronautics, Ltd.

A survey issued to participants shortly after their return tells it all — more than 86 percent indicated that they expect to sign a joint-venture or other agreement with an Indian supplier within one year.



2007 Associate Member/SMC Events
    Southwest Regional Meeting, Feb. 22-23, Dallas, Texas. Host: Raytheon Company

    Spring 2007 SMC Meeting, March 19-21, San Antonio, Texas

    47th Paris Air Show, June 18-26, Le Bourget Airport

    Summer 2007 SMC Meeting, July 24-27, Colorado Springs, Colo.

    Fall 2007 SMC Meeting, Oct. 16-18, Atlanta, Ga

    Northeast Regional Meeting, Sept. 20-21, East Hartford, Conn. Host: Pratt & Whitney
For more information, contact Leonora Hansford at leonora.hansford@aia-aerospace.org or Peggy Boyd at peggy.boyd@aia-aerospace.org.



SMC: 10 Years and Counting
AIA's Supplier Management Council in 2007 is celebrating 10 years of leadership on behalf of America's aerospace suppliers.

Formed with 20 pioneering members, a decade later the council is a mature body of strength and influence in the aerospace and defense industry, bolstered by a dynamic roster of 175 AIA associate members.

The newest members are Cristek Interconnects, Inc., EDAG Inc., ION Corporation, Reyes Machining, and Signal International.


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