The warning about the vulnerability of the aerospace and defense industry’s supply chain came buried in the pages of a report issued by the consulting firm EY two years before the COVID-19 outbreak became a full-blown global crisis. In the February 2018 report, EY cautioned that “disruption at any part of the supply chain might lead to a cascading effect on the entire supply chain. Supply disruptions and subsequent delivery failures can lead to severe consequences.”
The consequences of disruption that EY envisioned have materialized in the A&D industry during the pandemic. Closures of factories in Mexico, where A&D firms have been deemed non-essential, were reportedly wreaking havoc on the supply chains of U.S. defense firms. Major cutbacks by airlines were idling or curbing activity at many civil aircraft assembly plants, curtailments that were reverberating down to lower-tier suppliers.
Among aerospace and defense manufacturers, the pandemic exposed supply chain vulnerabilities that even the most diligently modeled and tested contingency plans had not uncovered, and risks many companies never imagined they would need to address. It also highlighted three of the capabilities that can help to protect a supply chain by neutralizing or at least reducing those vulnerabilities, including:
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