Sourcing Strategies and their Implementation in the Aerospace Industry

Abstract

By a field study of an Airbus Group subsidiary in combination with a review of extant literature this work examined strategic sourcing in the aerospace industry and the associated implementation challenges and obstacles. The case study observations were consistent with the literature-based conception that extremely long product cycles, in combination with relatively high non-recurring costs, and a need for strong quality control can be considered as distinctive features of the industry. Those characteristics benefit the application of long-term partnerships and a relative absence of multiple sourcing. However regarding implementation it became apparent that the case company is susceptible to issues that are related to its origin and hamper this approach. Amongst others those are a historically grown production setup focused on mainly vertical integrated operations with the associated insufficient ERP systems, limited transformation capabilities and capacities that coincide with ramp-up challenges while the impact of backlogs and delivery failure is extreme, and short-term cost pressure. This problematic context can be considered similar for other incumbent aerospace companies – especially from Europe - which have comparable origins and also face the same industry-wide challenges. Hence also implementation - and not only determination - of sourcing strategies may be considered a main issue in this context.