The aerospace industry is very complex and highly regulated putting increased demands on aerospace and defense manufacturers and their business systems. The rapid change in the aerospace and defense manufacturing industry, increasing competition,and changes in technologies require suppliers to fast, fluid,efficient and cost-effective applications to solve daily challenges to better serve customers, collaborate more effectively with vendors, and to continue building state-of-the-art products at the highest possible level of quality and the lowest possible prices to fend off competitors.
One the mission-critical systems required by all aerospace and defense manufacturers is Enterprise Resource Planning (ERP). To understand how ERP is helping the Aerospace sector however, we need to know what ERP means.
What is ERP?
Enterprise resource planning (ERP) is simply the management of integrated business processes through the use of software or other technology. It is a business management software designed principally for manufacturers that integrates the main functions integral to the success of all areas of the business including accounting, inventory, sales, purchasing, manufacturing, human resources, and more. ERP is a suite of integrated applications that a manufacturer utilizes in the collection, storage, management and interpretation of data with defined business processes for financial, inventory, and other transactions.
A key benefit of ERP is that it supports multiple functions, meaning it is an extensive database that can be used and shared by different units in an organization. For instance,ERP will help the human resources department of an organization and at the same time, aids the marketing team in generating more sales, and enables the manufacturing department to balance supply and demand for just in time purchasing and minimum on-hand inventory to reduce carrying costs while ensuring on-time customer deliveries of products.
How ERP Is Being Utilized in the Aerospace Industry
The Aerospace sector is making use of several applications and ERP consultancy firms in the market to automate their operations and assist in their business functions, in order to reduce overhead costs and attain growth.
ERP is used in the aerospace and defense sector similarly to general manufacturing industries. It includes features to manage inventory lots and serial numbers. It provides modules and features to track and manage engineering revisions and quality control. It tracks inventory, includes material requirements planning to recommend suggested purchase orders, work orders, and transfer orders to balance supply and demand. It includes features to manage machines, work centers, labor employees, tooling, and other resources.
It includes scheduling modules to maximize machine and employee utilization. And it does basically anything and everything else that most general ERP products on the market have done for decades. However, ERP specifically designed for the aerospace and defense manufacturer must do a lot more. It must be able to track requirements flow down.
It must provide features for specific milestone and work breakdown structure (WBS) invoice and billing with dozens of specific requirements as dictated by military customers and others in the industry. It must support compliance and reporting for such things as ITAR, DCAA Audits, Transfer-Borrow-Loan-Payback (TBLP), AS9100 Quality Regulations, Logistics Support Analysis (LSA), MMAS for DFAR and DCAA, DPAS Reporting, and so much more.
The hard reality is that there are only a few truly great ERP products on the market for aerospace and defense manufacturers and most of them are very expensive and highly complex as they are designed for the largest aerospace and defense manufacturers. These monolithic systems do not scale well for smaller aerospace and defense manufacturers who have the same requirements but require a simpler approach and a much lower total cost of ownership for their ERP business system.
Top 3 Aerospace Companies Using ERP
The Boeing company Boeing is a leading international aerospace company known for manufacturing and designing advanced aerospace technologies within defense and space, as well as a renowned manufacturer of commercial jetliners. Through the usage of SAP Enterprise resource planning (ERP), Boeing is able to make its products better, deliver them faster and ensure manufacturing is easier and safer for its many thousands of employees. Their customers are also supported with insights to help them run their businesses more efficiently.
However,the impact of ERP on Boeing can be mostly felt in the area of design manufacturing. This can be attributed to the reason why it is one of the pioneer companies in the aerospace industry to venture into additive manufacturing technologies. With the help of ERP and additive 3D manufacturing, they are able to cut down costs, reduce losses and grow their business into a multi-billion-dollar company with a track record of quality products.
To help support their lean manufacturing and supply chain objects, the Commercial Airplanes business unit employed the ERP services of a Chicago based company.Boeing’s main purpose of initiating ERP in their business functions is to leverage on the benefits it has to offer which includes accelerating and developing their manufacturing process.
Airbus,also known as the European Aeronautic Defense and Space Company, is another major player in the aerospace and defense industry using SAP as its core ERP application. The European multinational aerospace corporation emerged as the world’s second biggest aerospace and defense company in 2018.
Airbus is renowned for designing, producing and delivering cutting-edge products and services –which includes the commercial aircraft, helicopter, defense, security and space segments.The integration of ERP into their business activities helps them in achieving innovation and maintaining their international status and branches -with roughly 180 locations and 12,000 direct suppliers globally.
The company has aircraft and helicopter final assembly lines across Asia, Europe and Americas.Innovation has always been a driving force at Airbus, which promotes cutting-edge technologies and scientific excellence to contribute to global progress. Through its predecessor companies, Airbus pioneered many of the technologies that helped conquer the skies and are now part of everyday life.
General Dynamics is another global aerospace and defense company in the market of making business jets and combat vehicles to nuclear-powered submarines and communications systems; their products are preferred by people because of their safety and security. They integrate ERP into their business functions to aid innovation and faster production of innovative products and services in business aviation; combat vehicles, weapons systems and munitions.
General Dynamics is organized into five business groups: Aerospace, Combat Systems, Information Technology, Mission Systems and Marine Systems. Through ERP, they are able to maintain a balanced business model which helps in managing the units and also gives each business unit the flexibility to stay agile and maintain an intimate understanding of customer requirements,all in a bid to achieve overall growth of the business and manage allocation of capital.
The application of SAP ERP in their business activities keeps them focused on what matters to their clients and helps them to deliver effectively through relentless improvement and continued growth, boosting return on invested capital and disciplined capital deployment.You can see from the examples above that larger aerospace and defense manufacturers tend to implement the most complex and expensive business applications available.
Many A&D manufacturers are utilizing SAP, Oracle eBusiness Suite (EBS), or Infor LN (fka Baan) while some are leveraging IFS, QAD, and other enterprise-class ERP applications. But these systems typically start at $1 million for software and at least that much (often four times as much) for the implementation services making these systems way too expensive for smaller aerospace and defense manufacturers.
SolutionsX has built out many specialized aerospace and defense features on top of the affordable Infor CloudSuite Industrial (fka SyteLine) ERP platform reducing the entry-point into A&D-specific ERP to a fraction of the price the larger application vendors charge.
Further, our staff specializes in A&D so we not only have the features –but we also know how to implement the software in an A&D manufacturing environment which few midmarket ERP consulting firms can say with confidence. Contact us today for more information about Infor CloudSuite Industrial for the A&D industry.