Five Factors Impacting the Aerospace Supply Chain
The aerospace supply chain is not alone when to comes to needing skilled workers.
Like manufacturing everywhere, the aerospace industry, a major part of the Connecticut and U.S. economies, suffers from a dearth of skilled workers.
Finding skilled workers is one of five major factors impacting the aerospace supply chain that a panel of experts tackled at the Oct. 26 Made in Connecticut Manufacturing Summit in Trumbull.
Eric Daniels, a partner at Robinson+Cole, moderated the discussion featuring Aerospace Components Manufacturers executive director Paul Murphy, Aero Gear Inc. president Doug Rose, and Jonal Laboratories president Marc Nemeth.
Skilled Worker Shortage
Rose, whose Windsor-based company employs about 175 people, said Aero Gear was fortunate to have a good relationship with Asnuntuck Community College and its advanced manufacturing program. We need Madison Avenue-type marketing to dispel the myths that are out there.
“Twenty-five percent of our workforce is from that program,” he said.
The program brought new, younger workers to Aero Gear, which has changed the dynamics of his workplace, Rose added.
“We find our older people are mentoring our younger people,” he said. “We’ve had a lot of success teaming them up.”
"We need Madison Avenue-type marketing to dispel the myths that are out there," Murphy said.
Nemeth said he keeps his staff engaged by updating them on all his company's projects so they understand the importance of their work.
"Today's manufacturing worker wants to be part of something bigger," he said. "Companies need to create and recognize that."
We need Madison Avenue-type marketing to dispel the myths that are out there.
Technology is the second major factor supply chain companies must address.
Daniels said it's essential for companies to "keep up with the latest technology to remain globally competitive."
Connecticut is a high-cost state, Nemeth said, and to remain competitive in a global market, companies must carve out a niche—and you need technology to do that.
If you don't invest in technology, "you die over time," Nemeth said.
"The issue is choosing the right technology."
Murphy said investing in technology "is a gamble because what you buy today may be obsolete tomorrow."
But, he said, if you don't invest in technology, your competitors will.
Murphy said ACM members share best practices regarding their technology investments.
Mergers and Acquisitions
The third impact area is the growing numbers of mergers and acquisitions. The more you sell knowledge, and not machine time, the more you stay strong.
Daniels noted that a record $72 billion was spent on deals in the aerospace sector in 2017, according to PwC.
"There are always going to be mergers and acquisitions," Murphy noted. "It makes a lot of sense."
He said acquisitions happen because a lot of original equipment manufacturers don't necessarily want to deal with a small company, often due to lack of capital or the absence of succession planning.
"You wonder as an independent company, 'Is that the writing on the wall? What do you have to do to stay independent?' Which we intend to do," he said.
Rose said companies that provide a commodity, such as traditional manufacturing, are more vulnerable to consolidation because the OEM is essentially buying time on their equipment.
But companies that provide knowledge will find it easier to remain independent.
"The more you sell knowledge, and not machine time, the more you stay strong," he said.
The more you sell knowledge, and not machine time, the more you stay strong.
The fourth area is the impact of aerospace clusters.
"We've had a lot of success over 20 years based on the trust we've built with each other," Murphy said.
He said that, years ago, Connecticut aerospace companies held their cards close to the vest and never shared secrets.
Now, they all benefit from sharing, Murphy said.
"We're better together, we're stronger together, even as competitors," he said.
"I'm a huge fan of the aerospace cluster," added Rose.
"It's all about boosting our competitiveness and selling Connecticut as a manufacturing location."
The fifth area the panel explored is the aftermarket. We're better together, we're stronger together, even as competitors.
Nemeth thinks that while OEMs will take on most of the maintenance services market, he sees an opportunity for companies like his to partner with OEMs.
But Murphy had a different view.
"These repairs are going back to the original equipment manufacturers," he said, “and they're going to control most of that."
We're better together, we're stronger together, even as competitors.
For more information, contact ACM's Paul Murphy (860.513.3205).
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