In the highly regulated aerospace and defence sectors, assurance demonstrates a unilateral commitment to quality across global supply chains. LRQA Aerospace & Defence Industry Team’s supply chain assurance director, Dan Carmel reports.
What is the number one risk identified by leading industrial clients today? Perhaps it’s skills shortages in the wake of the pandemic as flexibility, better work-life balances and recognition expectations from workers remain high?
Or perhaps, it’s the price of raw materials, driven up by logistical challenges resulting from the said skills shortages?
Or perhaps, it’s the threat of cyberattacks, where the potential for high revenue and relative ease-of-use make ransomware a go-to weapon in the arsenals of financially-motivated cyber-attackers? (1)
The answer is, all of these combined. That’s because they all lead to one thing: disruptions to supplies of key inputs for business-critical operations. Whether its disruptions to the supply of skills, raw materials or IT functionality, these all make up crucial elements of any modern enterprise’s supply chain.
Only a few years ago, skilled labour was abundant and undervalued; organisational culture was overlooked. That’s no longer the case; the pandemic has disrupted working attitudes and values.
Only a few years ago, raw materials from Russia, Ukraine and the Far East were pretty much guaranteed delivery within weeks. That’s no longer the case; war, skills shortages and sanctions have disrupted processing, supplier priorities and logistical infrastructure.
Only a few years ago, a good anti-virus software would protect your IT infrastructure from some phishing or mal-ware. That’s no longer the case; attacks now disrupt even the software service providers which have resulted in widely successful and extremely damaging attacks. (2)
All of these disruptions to supply chains have been experienced by even the largest OEMs in the industrial landscape, which has not been helped by a sometimes passive approach to supply chain risk that they have enjoyed for the last 30 years. It could not go on and now OEMs are realising this and re-evaluating their supply chain risk. One of the core activities in this re-evaluation is supply chain assessment and assurance (SCA).
Many OEM supplier bases can consist of over 5,000 suppliers at any one time, accumulated over decades. This has led some supply chain directors to conclude that they simply do not have the resources or tools to effectively assess and analyse the capacity, capability and constraints (the three Cs of supplier evaluation) of their key suppliers. By key suppliers, I mean those that have a tangible impact on the product, process, persons or information needed to enable the business to function as expected.
OEMs can benefit from assurance, inspection & assessment providers (also known as Certification Bodies or ‘CBs’) who can both deliver supply chain management training and conduct fully-managed supply chain services, for companies seeking to offload these processes to specialists. They may not have appreciated the experience and expertise of CBs and at times, even dreaded their presence at their own sites. After all, most people don’t really like third-party auditors coming in and seeing if their activity, operation or leadership are planning & delivering as their customers expect them to be. But that’s precisely what’s needed now by OEMs and their sub-tiers, on whom they really depend, as they realise the scale of the supply chains they’ve been enjoying for years.
Supply chain certainty
By commissioning an independent inspection & certification body like global assurance provider LRQA to deliver supply chain inspection and assurance services, clients can invest in a more resilient and flexible supply chain at a time of challenges for suppliers.
LRQA's key supply chain assurance (SCA) services include:
The benefit of these services is that they can be modular and delivered at scale, beginning with the vendor site level or right up to implementing a fully managed, supply chain quality programme incorporating all of the above.
LRQA is a leading, global provider of inspection services, serving over 10,000 clients worldwide across complex global supply chains to deliver quality, safe equipment. This is the natural next step for any OEM or sub-tier business seeking a reliable and competent partner to enhance supply chain assurance.
Not to mention the cutting edge, intangible supply chain that now exists: Digital. The supply of Software-as-a-Service is now a core aspect of ERP, PLM and CAD software systems, facilitating upgrades, security and connectivity across manufacturing assets, logistics, supplier planning and customer portals, often in near real-time. It's now time to perform supply chain due diligence at every level to achieve a more granular, almost surgical level of risk awareness, which dedicated CBs have the experience and resources to deliver via tailored SCA programmes.
This fits in very well with supply chain accreditations for those individuals seeking to deliver and maintain industry standards in supply chain management. While the terms ‘procurement’ and ‘supply chain’ may be used interchangeably by some, there is a difference and for professionals working in these operational areas, accreditations are a proven route to gaining education and recognition of supply chain standards.
Tried and trusted
The UK’s Institute of Supply Chain Management (IoSCM) has a range of training modules trusted by some of the world’s largest corporations to train and educate their workforce. The IoSCM understands the industry and the need for highly-skilled, qualified professionals which is why they developed sector-specific qualifications that will help upskill employees, evolve businesses and enhance careers. (3)
Supply chain accreditations exist in the following disciplines: Supply chain management; Manufacturing, Production and planning; Logistics and transport; Management and leadership; Import and export; Warehousing and inventory; Ports and shipping; Purchasing and procurement; Quality management.
Procurement and supply chain professionals looking to personally and professionally progress can undertake these courses and businesses hoping to improve productivity, loyalty and motivation in the workplace should encourage employee development in this sphere. These professionals will, at the end of the day, be the ones who work with certification bodies to develop supply chain risk mitigation strategies, create supplier management frameworks and establish best practice for ensuring the correct standards are communicated and adhered to throughout the supply chain.
A capability that merges external supply chain assurance with internal supply chain professional accreditations are what will be needed by businesses going forward. With this merged capability, industrial businesses can publicly secure their brand and reputation through actively demonstrating a commitment to supply chain quality, while at the same time, empowering procurement and supply chain professionals with the knowledge, intelligence and tools they need to address risks, delays and failures in the supply chain.
(1), (2): The Current Threat Landscape: Ransomware by Nettitude, an LRQA company
(3): Institute of Supply Chain Management, https://www.ioscm.com