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Full of big fish, little fish, elephants and fleas, in terms of diversity and size, today’s global aerospace supply chain contains large multinational corporations, the proverbial Fred in his shed and everything in between!
Many aerospace materials suppliers working for established OEMs can probably be forgiven for thinking their relationship is simply a case of ‘us and them’. However, there has recently been a sea change in the way larger companies address their working relationships with the extended materials supply chain. This rethink has led to a much less adversarial approach to the way they do business, creating more collaborative relationships leading to mutual benefits for both parties.
One company prepared to show its mettle in overcoming any barriers to long-lasting beneficial partnerships is the NeoNickel Group, a European supplier of speciality aerospace alloys for commercial aviation, defence and space exploration. As major aerospace OEMs evolve and aggregate their material demand over a fixed period, the company is seeing an increase in contractual business flowing down through the supply chain to its door.
“We are increasingly being asked to enter into contractual agreements for projects as the market moves away from a more transactional spot buy basis to purchasing on 1-3 year agreements,” begins NeoNickel’s Milton Keynes facility, sales manager, Neil Wingham. “NeoNickel recently won a number of contracts with the support of mills with agreed pricing for the duration of the agreement based on either a firm and fixed basis, or with elemental movements factored into the pricing. Customers can plan for fixed costs on their material and continuity of supply meaning that we are able to manage our supply chain and demands with greater efficiency. Our investment in market leading software allows us to report in real-time on usage, forecasting and lead-times, enabling us to react to any changes in demand quickly and with minimal fuss.”
It’s a material whirl
In such a heavily regulated industry like aerospace, how important to NeoNickel is it to keep up with the latest accreditations, such as AS9100 and Nadcap?
“Our technical/quality team always pushes to sit in various standard committee meetings like ASTM, ISO or NACE,” states NeoNickel’s technical marketing engineer, Poontrika Walton. “That way, not only do we know what is going on and the climate in the industry first-hand, but we can also respond quickly to any new demand and supply.”
I’m interested to know what customers asking NeoNickel to do more of? Price, quality and delivery are given, but is there anything else that springs to mind?
“As customers look to rationalise their supplier base and grow their businesses into new markets, raw material suppliers who are able to offer a wider range of products are proving to be most successful,” continues Wingham. “NeoNickel operates across a range of industries and carries materials in nickel, titanium, stainless steel and alloy steel. As the exclusive European agent for Rolled Alloys Inc. and Corrosion Materials Inc. we present a unique product offering to our wide customer base. With locations throughout Europe, we offer a fast turnaround across a number of materials making us a one-stop shop for many of our customers.
“We are recognised in the marketplace for our processing capabilities, whether it be in our investment in bar saws, plate saws, waterjet or laser processing. Customers are asking us to supply them with more than this. We are able to service this demand by also supplying non-standard products that are not available ‘off the shelf.’ Our Sheffield Conversion Centre manages the process of forging, heat treatment, testing and machining through an approved route. As such we are able to supply our customers a finished product rather than a piece of metal.”
Is there a concern that less well developed countries can push unqualified, or at least ‘unknown origin’ materials into the aerospace metals supply chain?
“We see more of this in the industry due to globalisation and price competitiveness,” states Walton. “It will be unavoidable in my opinion. The most worrying aspect is not that the material comes from less developed countries, but issues with traceability. Today’s buyers also play a crucial role and in my opinion they should be technically oriented to know exactly what they are buying and how defective materials can vitally cause the loss of lives, properties and reputation.”
Living in the plastic age
I ask whether NeoNickel is concerned by the increasing use of carbon fibre composites in the aerospace industry and does it pose a threat to its business? Are you seeing a metallic backlash to compete with their desirable lightweight properties?
“No, carbon fibre is not really a competitor of our materials,” affirms Walton. “Indeed, it’s quite the opposite as it promotes more usage in the various grades of alloys we sell. Firstly, the use of carbon fibre composites is directly proportional to the use of better galvanic corrosion-resistant materials, such as titanium alloys. The use of aluminium, which can corrode when coupled with carbon fibre, is expected to decrease.
“Secondly, by trying to adopt more carbon fibre and other lightweight materials, the industry is showing a clear sign that major players are willing to invest in better materials which could make their aircraft more efficient and more environmental friendly by employing higher temperature engines and lighter weight. This means that as a good quality supplier of super alloys, titanium and stainless steel, NeoNickel will definitely see more opportunity in this industry.”
NeoNickel has seen and expects to see more vertical integration in the supply chain, with manufacturers increasingly wanting more control on distribution, which ultimately will be bad news for the end user. The net result will be a smaller market to choose from, which will no doubt increase pricing in the long term. The emphasis on service and quality will be lost in return for short-term price gains.
“I think the industry is definitely heading towards more long-term agreements and multiple sourcing in order to ensure a de-risked and reliable supply chain,” Walton notes. “There are definitely more consolidations in major suppliers, such as TIMET and Precision Castparts Corp. in order to respond to the customer more quickly and get a better forecast.”
Exceeding expectations
NeoNickel’s general manager, Jane Savage recognises that operating in one of the world’s most safety critical industries means the quality and standard of its products must be absolute.
“The industry will continue to evolve as will customers’ expectations,” she concludes. “We are focused on being one step ahead of our competition by offering a world-class service, the highest level of quality as well as the ability to adapt to each customers individual needs, whether this is by offering consignment stock, added value products or just on-time delivery. We see ourselves as the ultimate metal manager and view our customers and suppliers as partners in this process.”
Clearly, the burgeoning demand for more commercial aircraft manufacturing in Asia coupled with a supply chain faced with ever more buyouts and acquisitions means that today’s materials suppliers need to be as tough and durable as some of the materials they provide.
