Cost reduction


As well as cutting costs, innovative supply chains can improve efficiency and boost profitability


Summer 2011


Issue 13 Dynamics 13


Dynamics UK and Hypertac will remove significant cost from the avionics equipment supply chain which won’t affect the profitability of the work from the point of view of the suppliers and yet will still reduce the overall price tag for the aircraft.


Three-phase programme


The initiative consists of three phases. The first is a matter of replacing legacy components with modern equivalents. These are more cost-effective because the customer benefits from the economies of scale of components that are in current demand around the world, whereas the legacy parts inevitably become more expensive to manufacture.


This kind of component replacement isn’t


without its complications. Every part of a complex aircraft system such as the Eurofighter needs to be approved and officially qualified. The re-qualification process for the avionics systems with the new components is being led by General Dynamics UK but has been made simpler and easier both by the close co-operation the Company is enjoying with Hypertac, as part of the initiative, and the full support of Eurofighter.


The second stage involves Hypertac transferring


the manufacturing lines for the legacy components to its low-cost manufacturing facility. This frees up space and resources for its current product lines, improving efficiency and allowing the company to exploit its facilities in the most cost-effective way.


Finally, in keeping with SC21 lean manufacturing


principles, the third phase involves moving sub- assembly processes from the US to the UK. In terms of supplying UK and European customers – including Eurofighter – this simplified supply chain will reduce wastage, cut lead times and enhance the ability to deliver on time.


This work with Hypertac, guided by SC21, is greatly enhancing our ability to support Eurofighter’s export campaigns


Paul Goodchild Director Mission Systems, General Dynamics UK


Challenging preconceptions


These changes are helping to challenge a number of preconceptions about how the supply chain is managed on ongoing programmes, opening the door to further innovations that will ultimately lead to even more cost reductions. And these changes are being fully supported by Eurofighter.


For example, changes such as the switch


from US to UK-based manufacturing lines will release parts of the programme from many of the restrictions of the US International Traffic in Arms Regulations (ITAR).


This innovative partnership is leading the way


when it comes to showing how companies can achieve the challenges set by Eurofighter for reducing cost. And it doesn’t end there. General Dynamics UK is in discussion with four other manufacturers to explore the possibility of moving manufacturing lines to Hypertac’s UK facilities, which will help reduce the risk of integrating US products into UK programmes.


“This work with Hypertac, guided by SC21, is


proving vital for General Dynamics UK,” says Paul Goodchild, Director Mission Systems at General Dynamics UK. “It is greatly enhancing our ability to support Eurofighter’s export campaigns by enabling us to become more competitive while protecting our work share on a major platform.”


SC21


The 21st Century Supply Chains (SC21) initiative is operated under the guidance of aerospace, defence and security trade body A|D|S. The framework offered by SC21 provides a strategic approach to improving the performance of supply chains in the aerospace and defence industries by applying common standards and metrics, and enabling the widespread introduction of innovations.


Benefit


Using up-to-date components brings economies of scale.


Hypertac


Rationalisation of production facilities makes for more cost-effective manufacturing.


US to UK


Moving production lines to the UK reduces waste, cuts lead times and enhances the ability to deliver on time.


The results are enhanced profitability throughout the supply chain and the reduction of through- life costs. In addition, end customers benefit from reliable delivery and a reduction in the time taken to field new solutions. The hundreds of companies signed up to SC21 include major prime contractors, such as General Dynamics UK, and also many SMEs, who see it as a way of gaining a competitive edge.


Trusted to deliver


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