Discover how Supply Dynamics helped a leading manufacturer of small business jets use PAC and SDX to transform how they manage their supply chain and how they utilized material demand aggregation to achieve:
- Bill of materials from all tiers of supply for 22,000+ parts
- $5 million in savings on aluminum bar and plate
- Improved efficiencies across all sub-tier suppliers and aluminum mills
SDX Success: Leading OEM for Small Business Jets Accomplishes End-to-End Supply Chain Visibility in Just 180 Days
A leading OEM manufacturer of small business jets had limited visibility into the types, quantities, and cost of the raw materials used to produce the components and assemblies that go into their product. The company’s executive team realized that this lack of visibility translated into a lack of control over a significant percentage of the cost of their aircraft.
Challenges from Lack of Raw Material Visibility
The OEM knew they could get their biggest return starting with analysis of aluminum, their most commonly utilized commodity. They had nearly 4,600 assembled parts comprised of more than 22,000 detailed part numbers sourced from hundreds of suppliers. They wanted to gain raw material cost visibility and control specifically for aluminum plate and bar stock.
Although incomplete pieces of the information existed in various ERPs and other systems across their IT infrastructure, their data was not readily accessible nor was it in a usable, structured format to facilitate decision making. To add to their difficulties, our client was also missing out on crucial supply chain synergies promised in a recent acquisition of another airframe manufacture. Their inability to integrate purchasing data and systems was a major barrier to progress and their data was a disparate mess.
In sum, our client wanted to provide decision makers with better visibility into sub-tier raw material demand, improve forecasting, and enhance negotiation and sourcing strategies.
Solution for Strategic Supply Chain Sourcing
To kick off this supply chain visibility initiative, Supply Dynamics was retained to deliver our client complete, accurate, reliable data and systems to connect the proverbial dots across hundreds of supply chain stakeholders. All 4,500+ assemblies and the 22,000+ component part drawings were processed with our software-driven engineering service called Part Attribute Characterization (PAC) delivering a clean, accurate, comprehensive bill of materials.
Next, the bill of materials was loaded into SDX and linked to a master production schedule to provide end-to-end visibility into raw materials, parts, and subcomponents that went into the jets our client designed and manufactured.
All of this happened in just over 180 days.
Savings on Aluminum at All Tiers of the Supply Chain
Equipped with the necessary systems and data, our client was able to:
- Understand and optimize the aluminum costs associated with each and every part manufactured at every tier of their extended supply chain
- Identify common materials among sub-tier suppliers and across their newly acquired businesses,
- Consolidate purchasing of like parts and materials to a fewer sub-tier suppliers and aluminum mills and distributors to gain efficiencies.
With the aggregate material insights harnessed from SDX, our client negotiated on behalf of its sub-tier suppliers for better raw material metals pricing – and saved over $5 million!
Our client continues to leverage the data from aggregation and is now exploring other opportunities for cost savings and performance improvement.