Global Supply Chain Challenges in the Avionics Industry

Pressures on the international supply chain are causing critical shortages and significant delays for many industries. The avionics and electronics industries are not immune to this. According to the Institute of Supply Management, three in every four B2B businesses that trade globally have reported major supply chain disruptions due to the Covid-19 pandemic.

Whilst Covid-19 is the main contributor, several other events are adversely affecting supply – some including the recent Suez Canal incident, extreme weather conditions in Texas causing extended factory shutdowns, and a devastating fire at an auto-chip manufacturing plant in Japan in March this year, which will take several months to return to normal production. Such events are constraining supply which is resulting in businesses having to increase their lead times and constantly manage customer expectations. Companies are forced to either increase their prices or absorb higher costs – the latter ultimately hurting the business’ gross profits.

Here at Flightcell we are dependent on several suppliers for our product lines, including our flagship product, the Flightcell DZMx. These suppliers are spread across multiple countries, time zones and continents. This requires careful coordination and management and fortunately we have over 20 years’ experience managing our supply chains and building excellent relationships with our suppliers. However, present times are unique and if there is a time for businesses to constantly adapt and make positive changes to their supply chains that time is now.

It is widely agreed by supply chain analysts that further product and logistical disruptions will arise in the global supply chain over the coming 1-2 years. They also highlight that increasing economic pressures and trade disputes will also put pressure on the supply chain and businesses must keep well informed of macro-economic factors.

Just as Flightcell continually optimise and improve our products, we recognise the need and are equally committed to ensuring our supply chains are kept as efficient as possible. We remain proactive in developing contingency plans to prioritise and minimise risks and manage potential supply disruptions as they arise. One initiative we have adopted includes holding greater quantities of critical components* This initiative alone has proved beneficial and while we have encountered some lead time disruption, it has been minimal compared to what it could have been, had this initiative not been implemented.

It is no easy task but in today’s dynamic global marketplace we recognise that investing time and resource into preparing accurate inventory forecasts and maintaining a strong supply chain is imperative to our business operations and may in fact give us a competitive advantage.

*Critical components include those with: Erratic delivery track record, customised items, growing lead times, high complexity and risk of obsolescence, or sole/ limited source of supply.