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Aerospace and Defense contractors and suppliers are expected to underwrite increasingly demanding performance outcomes, promoting improved readiness and sustainability. Global supply chain services will be key.
Contractors that can utilize effective global supply chains and networks—and maximize global supply chain service visibility for key elements of delivery, cost and performance—will have a strategic differentiation.
To achieve this competitive differentiation, core, cross-program capabilities must be built, enabling providers to understand customer needs and build the right skills and team to deliver them. Aerospace and Defense companies must also re-think the customer relationship as it changes over a product’s life cycle. Knowing how a customer expects to use a product from the time of its introduction, through its multiple deployments, to its ultimate retirement is essential to providing the correct level of global supply chain service and anticipating customer needs.
Underpinning these expectations is a need for new global supply chain management skills. Aerospace and Defense providers need solutions that help them shape superior operating strategies; rapidly and successfully deliver products to market; and reduce the costs associated with procurement, inventory, distribution, transportation and readiness. Accenture is committed to helping you achieve these solutions.
The armed forces are focusing more on fighting wars and less on maintaining equipment. This makes it even more critical to increase the availability of their assets. In turn, the major Aerospace and Defense (A&D) contractors and the largest original equipment manufacturers need to build capabilities far afield from their traditional strengths with long lead-times, under highly engineered, major programs. Although the industry's role in logistics and support services has grown over the last 10 years, industry spending is still dominated by equipment acquisition and upgrades. Increasingly, however, contractors and suppliers will need to manage mission-critical capabilities, provide enabling infrastructure and—critically—contracts based on performance.
To achieve high performance, contractors and suppliers must stake their claim on this high-growth market. They must underwrite increasingly demanding performance results and manage a complex transition to an unfamiliar operating model. Finally, they must adopt new roles and tackle supply chain complexity that far exceeds traditional manufacturing operations.
How companies react to these changes will redefine the major defense players, especially in lean years for new products. Aerospace and Defense (A&D) firms are under pressure to improve military asset readiness and sustainability and use global supply chain services, all at a reduced cost.
Aerospace and Defense (A&D) contractors have a tremendous opportunity to succeed in helping the United States and its allies win the global war on terrorism—what has become known as "the long war." The most successful companies will have the vision to see the shift and the agility to steer a course to intercept it. They will transform their workforces, their products and services and the processes to procure and sustain products throughout their lifecycles.
By mastering the challenges associated with a service-oriented business, A&D providers can change the relationship and build new partnerships with their most important customers. On the journey to high performance, that's a highway the industry cannot afford to miss.
August 22, 2006
Outlook from Accenture
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