The Future of the Global Aerospace & Defence Supply Chain

Transcription

1 Peter Smith Chairman and CEO The Future of the Global Aerospace & Defence Supply Chain Global Precision Engineering

2 Nasmyth Group s Mission To be a full capability supplier of precision mechanical engineering, addressing requirements for high quality product and systems for global aerospace, defence, marine, medical, space, energy and specialist automotive markets.

3 The Future of the Global Aerospace & Defence Supply Chain This presentation examines the critical factors that look set to shape the future of the global aerospace & defence supply chain I will cover how all suppliers, whatever their size, must adapt to the realities of supply chain rationalisation and globalisation I will consider in detail the specific issues that suppliers must address in order to meet the needs of OEMs going forward from financial stability to technology flow-downs, from capacity constraints to skills shortages In order to thrive, everyone in the supply chain should have a clear understanding of their role in serving the end customer, the OEM

4 What makes a good supplier? Financial Stability Skills Technology Capacity

5 What makes Nasmyth Group successful? Financial Stability Cash - Generation and management Bankers - Excellent and supportive bankers Privately Owned - Freedom, focus and agility Funding - No Private Equity, Venture Capital or Plc Profits - Balance of profits via growth

6 What makes Nasmyth Group successful? Solutions - Provision of total solutions Engineering - Excellent engineers Technology Clarity - A clear focus Strength - Strongly established and leading edge Investment - Willing to invest Equipment - Latest equipment and software

7 What makes Nasmyth Group successful? Training - 10% apprentices, 5% Degree, 2 nd Degree or Professional Training Partnering - AMRC, NARC & TMC (Advanced Manufacturing Research Centres) Skills Retain - Employees with 40, even 50 years service, proactive programme of employee development Hire - Adding key skills in Management, Engineering, Sales & Manufacturing Pre-emptive Hires - Recognising the requirements of growth, adding and training for key management roles in advance of the need

8 What makes Nasmyth Group successful? Customers - Work with customers to identify and avoid capacity constraints Capacity Planning - Clear and unambiguous planning of capacity and investment Strategy - Strategic involvement and use of qualified supply chains People - Timely investment in and development of people Skills - Ensuring the managers and engineers have leading edge capabilities and skills

9 Nasmyth Group An illustration of Success as a Supplier and Manager of Key Supply Chains Sales growth approaching 20% plus per annum Employ 800 skilled people and another 450 plus in our supply chains 12 companies organised as four clusters on 10 sites 65% engine and airframe equipment, components, processes and services In existence for 12 years, our oldest Company 1914 A privately owned mid-cap business

10 The Future Supply Chain Cost Down Delegated Approvals Rationalisation Lower tier levels for smaller businesses Delegated supply chain management Rapid response to design improvements and change

11 Challenges created by changes to Supply Chains Cost Down There are limits eventually to efficiency improvements Respite through low cost engineering and manufacturing resources Approvals Quality and source change approvals Capacity and Investment Required Funding the demand for investment in plant, equipment and people Working capital increases Manufacturing and Technology flow down Strains engineering resources Supply chain management skill shortage Contract and commercial levels of understanding Risk of Customer Dependency 30% rule

12 What is good about the changes? Relationships - Closer relationships between OEM s and supply chains Plans - Greater visibility of long term OEM plans Volumes - Increased volumes Improved economics Assists with price down Technology - Technology flow down Up skilling the Supply Chain Strength - Selects the stronger supply chain members Financial Capacity and Investment

13 Rationalisation When will it stop It was here 10 years even 20 years ago It will not stop How do Companies survive Their customer focus - willingly become tier 2 to 4 Work closely with and for technically qualified and preferred tier 1 s Become themselves more like mini OEM s Processes Management Standards and approvals The Global Challenge It too will not stop

14 How OEMS think Drivers Cost saving and on time delivery - Always expected Simplification = Rationalisation Full capability suppliers - One contract instead of several Open and familiar processes - Quality, planning etc. Strong commercial contracts A bought in supply chain? Think like an OEM

15 How does the future look? Vibrant and growing industries New challenges, new opportunities Rationalisation continues Direct suppliers to OEM s must Exceed and remain above a rising size and technology threshold Be financially sound Have respected and professional management Recognise and respect globalisation Manage their own supply chains

16 Nasmyth Sales Think like an OEM

17 For more information about Nasmyth Group visit our stand S2-370