Current issues and trends in the Aerospace supply chain

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1 Current issues and trends in the Aerospace supply chain Iain Subtitle Kirwan runs here 1 line max Director Supply Chain Consulting

2 Global A&D insights and trends Overall global A&D industry expected to grow by around 3% in 2015 Global commercial aerospace sector to sustain its significant revenue and earnings growth in 2015 Continued declines in revenues for the global defence sector According to ADS, British companies are responsible for $1 in every $6 spent by the world s commercial airline manufacturers in the present boom. There has been a fivefold increase in the manufacture of commercial aircraft since 2009, and ADS forecasts another 5 percent increase in deliveries this year.

British companies are responsible for $1 in every $6 spent by the world s commercial airline manufacturers in the present boom.

3 What have you told us? WEAF Supply Chain Survey % of survey participants were more optimistic about the economy than in the previous six months 70% of companies expect to increase their headcount in the next six months The three biggest challenges that suppliers are facing are skills shortage, unpredictability of demand and customer cost pressure Suppliers are optimistic that their customer base will increase over the next 12 months with growth of new overseas customers increasing significantly

months 70% of companies expect to increase their headcount in the next six months The three biggest challenges that suppliers

4 What about other Supply Chain leaders? Deloitte CPO Survey 2014 Participation in growth A changing mandate for Supply Chain leaders, moving from cost focus to new product development and supplier innovation Talent 57% of Supply Chain and Procurement leaders feel their teams lack the skills needed to deliver their operating strategy Risk Overall supply chain risk has increased with economic, reputational and geopolitical risk rising most markedly Analytics 70% of Supply Chain and Procurement leaders intend to invest in their analytics capabilities in the next 12 months

and supplier innovation Talent 57% of Supply Chain and Procurement leaders feel their teams lack the skills needed to deliver their operating

5 What s next for Supply Chain Management? Focusing on risk and protection of reputation through responsible supply chain management Aligning capability to emerging markets and acting as a beachhead for growth Emerging Markets Corporate Reputation Supplier Relationships Working increasingly collaboratively with suppliers to generate value LCCS vs on-shoring Being at the forefront of strategic decisions to determine the future supply chain design Ruthlessly driving efficiency from operational and transactional tasks Back Office & Outsourcing The 2020 world Analytics and Big Data Leveraging analytics to bring insight and demonstrate true financial value Proactively bringing innovation from the supply base to the business Innovation Capability Building the knowledge and capability to support a whole new era of requirements

Reputation Supplier Relationships Working increasingly collaboratively with suppliers to generate value LCCS vs on-shoring Being at the forefront of strategic decisions to determine the future supply

6 Contact Iain Kirwan Director Supply Chain Consulting Mobile: +44 (0) Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited ( DTTL ), a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of DTTL and its member firms. Deloitte MCS Limited is a subsidiary of Deloitte LLP, the United Kingdom member firm of DTTL. This publication has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication. Deloitte MCS Limited would be pleased to advise readers on how to apply the principles set out in this publication to their specific circumstances. Deloitte MCS Limited accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication Deloitte MCS Limited. All rights reserved. Registered office: Hill House, 1 Little New Street, London EC4A 3TR, United Kingdom. Registered in England No

is a legally separate and independent entity. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

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