• Advertise
  • Contact Us
  • Supplier Directory
  • SCB YouTube
  • About Us
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Parcel & Express
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Robotics
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Customer Relationship Management
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • Green Energy
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • Sourcing/Procurement/SRM
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Management & Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Warehouse Automation
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
    • Webinar Library
  • PODCASTS
  • WHITEPAPERS
  • VIDEOS
Home » Sourcing/Procurement/SRM » A&D Supply Chains Prepare for Uncertainty in 2009

A&D Supply Chains Prepare for Uncertainty in 2009

December 10, 2008
From AMR Research/Michael Burkett

A&D manufacturers face uncertainty as 2009 approaches, with a new Presidential Administration and Congress soon taking hold of policy and budget decisions. Throw into the mix the current economic turmoil, and A&D manufacturers are justified in their concerns about the direction of current and future programs. These companies can expect increased scrutiny not only on the strategic value of programs, but also on efficient execution against cost, schedule, and technical performance goals. Supply chain professionals must recognize the need for improved program performance and identify actions they can take to help reduce program risk.

The Obama administration is unlikely to slash defense spending in the near term, but has indicated a possible shift in priorities, which could bring new focus on major weapons programs like the F-35 Joint Strike Fighter and Future Combat System. A March 2008 General Accountability Office (GAO) report chastised the Department of Defense (DoD) for poor program performance, stating that cost and schedule outcomes have not improved since 2000 and the 72 programs assessed did not meet best practices essential for performance. The GAO report also found variations in cost and schedule, with a total estimated acquisition cost growth of $295B in FY 2007.

The DoD and corporate executives are calling for improved program execution. Boeing CEO Jim McNerney stated in a July 11, 2008 Aviation Week article that his company didn't have enough accountability in its program management approach and is now bolstering its importance. The director of defense procurement, acquisition policy, and strategic sourcing issued a memorandum in August 2008 to the Army that processes such as earned value management (EVM) must be used more effectively to improve program execution.

Supply chain has a role in helping to manage program risk:
Supply chain professionals can proactively contribute to improvement by bringing their expertise to the table. The following are two of the top issues and suggestions on how the supply chain organization can assist.

Eliminate inaccurate baseline estimates of cost and schedule:
A July 2008 GAO review of the DDG 1000 Zumwalt destroyer program pointed to several issues across the shipbuilding portfolio, including unexecutable business cases that allow programs to start with a mismatch between scope and resources.

Here are two areas where supply chain can contribute:

Early program involvement--The supply chain group must be actively involved during the early stages to submit an accurate supply schedule, taking advantage of available supply chain scenario-planning capabilities, before customer signoff.

Integrate new product introduction into the sales and operations planning (S&OP) process
--Incorporate the new product pipeline into sales and operations planning to understand the tradeoffs between business value and the cost of supply.

Reduce program cost overruns and schedule slippage:
Programs with cost overruns and schedule slippage include Lockheed Martin's Littoral Combat Ship and the Armed Reconnaissance Helicopter with Bell Helicopter/Textron. The March 2008 GAO assessment found that requirements changed on 63% of programs reviewed once system development began, which contributed to poor program execution.

Areas where the supply chain organization can contribute include the following:

Intersection with enterprise project management (EPM)--Supply chain is responsible for executing certain work packages within the project schedule. As part of a solid EVM and project risk management process, the supply chain must reliably execute tasks, but also quickly identify design and schedule changes that contribute to program variances along with proposed mitigation strategies.

Supplier performance and risk management
--Increased outsourcing to suppliers introduces additional program risk the supply chain must manage. It must improve a number of capabilities, including strategic sourcing and supplier contract negotiations, supplier segmentation and risk profiles, supplier development (like for small businesses, which is required by government regulation), and multi-tier visibility and change control.

Supply chain talent could become a barrier to contributing more strategically to program performance. Our April 2008 study on supply chain talent found that the supply chain organization is often viewed as a necessary evil instead of as a strategic partner. It often has insufficient span of control in areas affecting supply chain success, such as new product introduction and post-sales support.

If A&D is serious about improving program performance, then the supply chain group must have a strategic seat at the table for business planning as well as the organizational talent and tools required for success.
AMR Research

    RELATED CONTENT

    RELATED VIDEOS

    Sourcing/Procurement/SRM Aerospace & Defense Automotive
    KEYWORDS Aerospace & Defense Automotive Sourcing/Procurement/SCM
    • Related Articles

      Former Analyst Heads Project To Help Supply Chains Prepare for the Unpredictable

      Supply Chain in A&D Sector to Be Under Scrutiny in 2009

    • Related Directories

      ProcureAbility

    From AMR Research/Michael Burkett
    More from this author

    Subscribe to our Daily Newsletter!

    Timely, incisive articles delivered directly to your inbox.

    Featured Product

    Popular Stories

    • Stacks of multi-colored shipping containers arranged in rows at a port, with rows of blue and grey shipping cranes lining the background along the coastline

      Port of Savannah Approved for New 3.5M TEU Terminal

      Global Gateways
    • An overhead view of a port, with stacks of containers and vehicles moving through rows

      Podcast | AI in Supply Chain Planning: Impact, Promise and Limits

      Artificial Intelligence
    • An overhead view of a shipping port stacked with containers, with stylized lines forming a grid connecting ships and berths

      Beyond De Minimis: Why Importers Need Defensible Shipment Data

      Parcel & Express
    • On Demand Webinar Oliver Wight Wed Oct 14 2026 2p ET.png

      AI in IBP: From Data to Decisions

      Webinars
    • SCB_Q426_SAP_FSR_THUMB_2.jpg

      An AI Playbook for Your Journey to Autonomous Planning

      Global Logistics

    Digital Edition

    Scb q3 26 cover

    100 Great Supply Chain Partners 2026: The Secret to Supply Chain Success

    VIEW THE LATEST ISSUE

    Case Studies

    • Recycled Tagging Fasteners: Small Changes Make a Big Impact

    • A GRAPHIC SHOWING MULTIPLE FORMS OF SHIPPING, WITH A HUMAN STANDING AT THE CENTER, TOUCHING A SYMBOLIC MAP OF THE WORLD

      Enhancing High-Value Electronics Shipment Security with Tive's Real-Time Tracking

    • A GRAPHIC OF INTERLACING HONEYCOMBED ELEMENTS REPRESENTING GLOBAL BUSINESS TRANSACTIONS

      Moving Robots Site-to-Site

    • JLL Finds Perfect Warehouse Location, Leading to $15M Grant for Startup

    • Robots Speed Fulfillment to Help Apparel Company Scale for Growth

    Visit Our Sponsors

    4flow Amazon Freight Anaplan
    Arkieva AutoStore Blue Yonder
    Canadian National Railway Company Carton Cloud CoEnterprise
    Dassault Descartes Dexory
    Duravant E2Open EPG
    General Logistics Systems GEP Hy-Tek
    iGPS Knapp Korber
    Lyngsoe Odyssey Logistics OMP
    PeakAI Procurability Quinyx
    SAP Sikick Staples
    S&P Global Mobility Systech TADA
    Tive TransImpact US Bank
    Werner WSI
    • More From SCB
      • Featured Content
      • Video Library
      • Think Tank Blog
      • SupplyChainBrain Podcast
      • Whitepapers
      • On-Demand Webinars
      • Upcoming Webinars
    • Digital Offerings
      • Digital Issue
      • Subscribe
      • Manage Email Preferences
      • Newsletters
    • Resources
      • Events Calendar
      • 2026 Event Coverage
      • SCB's Great Supply Chain Partners
      • Supplier Directory
      • Case Study Showcase
      • Supply Chain Innovation Awards
      • 100 Great Partners Form
    • SCB Corporate
      • Advertise on SCB.COM
      • About Us
      • Privacy Policy
      • Contact Us
      • Data Sharing Opt-Out

    All content copyright ©2026 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

    Design, CMS, Hosting & Web Development :: ePublishing