ERP for the Aerospace and Defence Industry
Author: Jack Wimbledon
Due to the highly precision engineered equipment that is produced by the Aerospace and Defence manufacturing industry, it is of great importance that companies in this industry are efficient and co-ordinated throughout the entire supply chain. Due to its nature, the A&D industry can have many design alterations and material changes in any one product order. On top of these common complications are the increasingly stringent requirements for reporting, documentation and certification.
The rules that are set before the A&D industry as a means of quality control and standardization must be strictly adhered to. With so much red tape, these companies could really use some help.
A very effective solution to alleviate this pressure is to implement an ERP (Enterprise Resource Planning) system. This would help to diffuse some of the confusions that occur within the A&D industry. ERP and manufacturing software helps to aid in the planning, control and communication across the entire company whilst at the same time helping to cut costs and reduce lead-times.
As the ERP system could speed up the lead-time and reduce waste, the A&D manufacturing industry could greatly benefit due to the nature of the pace of the industry. Managing stock level, shop floor activity, production scheduling and engineering requirements on a basic level is easy for the ERP system.
For a fully automated ERP system that moves beyond basic function the ERP system designed especially for the Aerospace and Defence industry is ideal.
Unlike other manufacturing industries, some A&D projects can run for many years, therefore a system that is built to cope with and manage such large scale projects is essential. With a built in project management application, the ERP system not only plans the project but also executes it to ensure that all areas are tracked and managed efficiently. This replaces the need for human intervention and as a result, reduces the chances of error.
In order to be in compliance with the contract specifications, the ERP system is able to provide initial estimate costs for areas including sub-contracting, overheads, materials and labour. With these estimates the company can pass on estimate costs to the customer and throughout the supply chain which also helps project managerswork to an approximate figure.
When choosing your ERP system, try to ensure it has the function to create, retain and execute all cost allocation information from past and current projects. These then can be used as a basis for future projects or over multiple projects and locations.
For management, it is not just what occurs within the company that needs to be controlled but also sub-contracting and parts or materials taken from external sources must be maintained and included in final costs and scheduling. With an integrated supply chain management system, the ERP system can manage supplier relationships and after-care sales services with ease. Two contributing factors that enable such excellent control of external factors are the electronic kanban and EDI. These play a huge role in the success of the A&D manufacturing industry.
There are a number of systems that also include Product Lifecycle Management (PLM), also referred to as Product Data Management (PDM). This feature encourages smooth contact between the company and suppliers so if the need for a design adjustment occurs, it is easy.
With the introduction of ERP for the A&D industry, it has become easy to plan and schedule the most time and cost effective ways to produce products for the customer. Full communication between you and the supplier and your own company enables you to create a system that allows the best timescale to be organised to suit everyone in the most effective way. This results in the customer receiving their product in a far shorter time period.
Should you be investigated by the DCAA, it is imperative that all of your licencing and records are up to date and relevant. With the implementation of an ERP system, this is done for you. The system can pull out any required record keeping you compliant with FAR standards and can provide the documentation for all information on cost, overheads, labour, materials etc. thus keeping you compliant with the DCAA.
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