Avio: Building the High-performance Supply Chain

As it analyzed the ongoing changes within the aerospace and defense industry, Avio concluded that delivering exceptional customer service would be central to its ability to be a high-performance business. Customer requirements, from design through delivery, were not only more stringent but were the key to winning and retaining business. Avio would need to invest in several areas in order to maintain the levels of service that the market required, none more important than its supply chain.

Established in 1908 and headquartered in Turin, Italy, the Avio aerospace company is at the leading edge of propulsion technology. The €1.4 billion company has four primary lines of business that focus on aircraft engine modules and components, civil and military aircraft engine overhaul, space systems and marine turbines respectively. Avio is a world leader in mechanical transmissions and turbines as well as solid-propellant space propulsion systems. Along with its joint venture partners, Avio is also the sole supplier of complete solid rocket motors to European space programs and is prime contractor for the new European launcher Vega.

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While one of Avio’s core values is to use innovative products and processes to support its customers, the company’s existing supply chain capabilities could not keep pace with its creative drive. As lead times grew and internal asset utilization declined, customer service levels also fell, threatening Avio’s position in a highly competitive industry. Avio’s senior leadership understood that in order to retain its market position, the company would need to implement new supply chain processes and capabilities.

Accenture worked with Avio to rethink its approach to supply chain in the context of the changing aerospace and defense industry. Beginning with a Six Sigma analysis of Avio’s supply chain processes, Accenture worked with Avio to develop a comprehensive business process and IT approach that would address Avio’s current customer service challenges and give it the flexibility for growth and the introduction of new services. To embed these changes within the Avio organization and culture, Accenture worked closely with Avio to support the critical, yet often overlooked, activities of training, change management and knowledge management.

These business and technology changes have reestablished Avio’s position as a customer-centric high performing business. Supply chain planners can now manage “by exception” thanks to a supply chain cockpit that gives them the information that they need to make management decisions when they need it. Similarly, Avio’s new supplier portal has significantly increased the amount and freshness of information that Avio has at its disposal for supply chain and manufacturing planning. Armed with this information, Avio can more accurately set customer expectations and work with them to meet and exceed those expectations. With increased visibility into demand and improved collaboration up and down the supply chain, Avio can now operate with lower levels of inventory while ensuring the availability and delivery of its products.