Supply chain delays contribute to broader challenges
By Eric E. Nichols and John Gebhard|December 2022
The Systems Engineering Technical Committee supports efforts to define, develop and disseminate modern systems engineering practices.
Systems engineering often contributes to a business’ ability to operate effectively through a crisis. However, as the global economy continued to emerge from the covid-19 pandemic, recurring systemic failures still ravaged the global supply chain. The supply chain’s fragility lingered this year, and the aerospace industry’s inability to receive parts when needed may extend beyond 2023. This weakness can be attributed to many issues, including a worker shortage and failure to account for a stressed global transportation system.
Supply chains encompass the beginning-to-end systems required to transform raw materials into a final product delivered to the customer. When viewed as use cases, modeling the aerospace and aviation systems involve multiple actors, including prime contractors, Tier 1 and lower-level suppliers, the workforce and the often-overlooked shippers and warehouses. Since 2020, the workforce and transportation actors have experienced major disruptions, affecting the aerospace and aviation sectors as sub-elements of the larger global economy.
Workforce shortages continued despite the incentive programs many manufacturing and technology firms began or enhanced last year. A key shortage concerned airline pilots, which led to unprecedented flight delays and pilot fatigue throughout the year. Fatigue allegedly contributed to pilots falling asleep during an ITA Airways flight in May and an Ethiopian Airlines flight in August.
During the pandemic, many technology workers retired or departed the workforce and have not returned. Continuing labor concerns prompted some companies to move their available workforce from low-margin businesses for more lucrative activities. Among them was Spirit AeroSystems, which in May proposed transitioning some employees from building widebody aircraft components to producing thermal protection systems for the U.S. Defense Department’s Common Hypersonic Glide Body.
Global production largely depends on ships to transport goods between nations, and transportation issues persisted this year. In April, the International Air Transport Association reported that air freight volumes were down 11.2% compared to April 2021. The decline in air freight indicates a return to ships as the ports cleared the 2021 backlog and improved transit times to pre-pandemic levels. However, in North America, trucks accounted for about 72.2% of goods shipped in 2021, per American Trucking Association estimates, and this segment continued to experience delays and shortages this year. Truck and trailer manufacturers had projected a recovery starting in 2021, but parts availability issues hampered truck production this year. For most of the year, Class 8 (over 33,000 pound, or 14,969 kilograms) truck sales rose compared to 2021. However, limited parts prevented even greater production and sales. Many companies that purchased new equipment after July received delivery dates well into 2023.
In addition to equipment shortages, a decades-long decline in truck drivers, stevedores and warehouse loaders continued. The lack of new and replacement vehicles paired with the ongoing worker exodus will plague transportation systems well into the future and may force needed innovation.
Systems engineering can often mitigate the long-term effects of a major disruption. However, previous failures to fully model the global supply chain illustrates this problem’s complexity. The pandemic demonstrated that the aerospace industry is not immune to global disruptions, even when those disruptions do not appear to involve these products. Aided by better systems modeling, market forces worked to correct failures amplified by the pandemic. Broad and strategic investments are needed to address the long-term workforce shortage. Similarly, organizations must identify system weaknesses and invest where possible to diversify and strengthen both the manufacturing and transportation systems. Evaluating the entire supply chain as a fragile system will help guide future investments and contribute to improved operations during the next crisis.