The world of aerospace is becoming exactly that – a global rather than a national industry.
Although the internationalisation of industry supply chains has been a trend for 25 years, the pace has really stepped up in the 21st century with aircraft manufacturers now outsourcing large elements of responsibility for designing and producing “systems”, or families of components, structures and technology, to a small number of risk-sharing partners, rather than directly managing complex local supply chains themselves. These partners in turn outsource complex design and production packages to their own suppliers.
The result of this is that programmes such as the Airbus A350 or the Boeing 737 – and even helicopters and corporate jets produced in much smaller volumes – will have major suppliers all around the world, each managing a crucial part of the aircraft’s construction.
This trend has come about for a number of reasons. Firstly, aircraft manufacturers have only been able to afford the cost of developing and producing highly-complicated aircraft by sharing the risk with suppliers. A company like Boeing used to employ hundreds of thousands of technicians manufacturing virtually every element of an aircraft in-house. Today, Boeing will be responsible for final assembly, marketing and sales and overall design: everything else is contracted out.
Secondly, dozens of countries have identified aerospace as a “halo” industry, creating skilled jobs, boosting exports and attracting investment. Often beginning by competing for “build-to-print” work, many nations have successfully pushed up the value chain, introducing elements of design engineering as universities have begun to produce talented (and cost-effective) aerospace engineers.
Various “emerging” nations have taken different approaches and in my talk at the Scotsman conference on the Future of the UK Aerospace Industry I will look at the paths adopted by the likes of Mexico, Poland, Tunisia and the United Arab Emirates.
I will also address the challenges affecting “traditional” aerospace nations and regions, including Scotland and the wider UK. Despite the lack of domestic OEMs (Original Equipment Manufacturers) and a declining defence spend, the UK’s aerospace industry remains robust, helped by a strong position on Airbus programmes, but also with the likes of Boeing. For traditional SMEs, the challenge has been to adapt. This has involved moving from a build-to-print expertise for a local customer to a more value-added approach, by investing in training, graduate recruitment and marketing, as well as working to establish specialist “clusters” in local regions, often with the help of government, local authorities, business organisations and local educational establishments.
• Murdo Morrison is Editor, Flight International and tweets at @FlightEditor
The Future of the UK Aerospace Industry takes place on 5 Sept, at the National Air Traffic Services centre at Prestwick. Speakers including Michael Moore MP, Fergus Ewing MSP and voices from across the industry will be debating the crucial issues affecting the sector. They will examine the UK government’s £2B industry partnership programme, strategies for securing high value jobs, training & skills and research & development. For more information see www.scotsmanconferences.com