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Safran has grown its team that works with suppliers on short-to-medium-term demand by 50%.
“Permacrisis” is a neologism created to reflect how a series of crises—climate change, COVID-19, the war in Ukraine, energy price inflation and mushrooming geopolitical tensions, among others—has created a state of unending crisis. Airframers and engine manufacturers, especially in Europe, are adapting to an enduring risk of supply chain disruptions. They have factored the notion of permacrisis into their strategy and are endeavoring to make their supply chains more resilient. The balance between outsourcing and insourcing is part of the picture, but the effort is more about simultaneously helping current suppliers and finding new ones.
Before reconsidering the supply chain, it is imperative to support the current one, OEMs say. “Supply chain management is coming higher in our priorities,” Airbus Commercial Aircraft Chief Operating Officer Florent Massou said June 13 at the Paris Air Forum.
- Airbus, Safran prioritize supplier resilience
- Sovereignty, shipping and raw materials are thorniest issues
Such supervision is no small task. Airbus receives 2.2 million parts on a daily basis to produce 3-4 commercial aircraft. Around 80% of the manufacturer’s activity is sourced externally, working with more than 12,000 suppliers worldwide.
“At Airbus, 3,000 employees take care of the supply chain,” Massou said. “We have worked a lot to improve our practices, our processes, our level of professionalization and our organization system in relation to our suppliers, for us to be understood and competitive.”
The idea is to help them in terms of technical knowledge and processes. “We are not where we should be yet,” Massou said. “Our role is to help our suppliers to be good. Otherwise, we pay the price.”
The airframer is considering a way to guarantee steel access for its suppliers. Airbus already secures a quantity and price from aluminum and titanium providers, Massou said. Suppliers then purchase from that defined amount according to their needs. This scheme is called conbid.
“We envisage doing the same for steel,” Massou said. “There is a steel crisis, and 250 grades of steel can be found in an Airbus aircraft.”
Safran is on the same page. “We must collectively step up in our capacity to react to upturns, downturns and geopolitical crises,” said Marjolaine Grange, group head of industry, procurement and performance for Safran. The team that works with suppliers on short-to-medium-term demand has grown 50%. Together, they manage investment plans, hiring and adjusting to demand, she explained.
Safran has regrouped the training schemes for those employees under a single name this year—the Supply Chain Academy. “The branding has given greater visibility to the job,” Grange said.
OEMs are analyzing their supply chains in terms of single points of failure—particular problems that can thwart the construction of an aircraft or engine. Massou cited the 2021 closure of the Suez Canal after a ship ran aground as another example of a crisis happening at no notice. “Hence our questions about supply chain resilience,” he said. “What are the locations where we rely on a single supplier—in China, Portugal, the U.S.? Shall we look for dual sourcing and find another supplier elsewhere?”
Safran is taking the same kind of fresh look at its supply chain. “Our Resilience 2030 project is also about single points of failure,” Grange said. “We want to have [more than one solution] to react in case of a temporary or permanent blocking.”
Sovereignty can be a factor in supply chain strategies. Safran decided in late February to build a new factory rather than rely on its U.S. suppliers to increase turbine blade production. Some countries, such as the U.S., give priority to sovereign production, which creates uncertainty for foreign customers. That is why Safran plans to open its own manufacturing site in Rennes, France, in 2027.
One way to decarbonize production is to reduce the distance components travel. “During COVID, Safran Nacelles reconsidered their strategy,” Grange explained. “They determined they should have the flows [of goods and services] around their production sites.” The objective was to cut the need for transport and become more resilient. “Indeed, Safran Nacelles is weathering the current crisis: Their on-time-delivery performance is not impacted,” she noted. Therefore, Safran has instructed other companies in the group to make flows more local, she said.
As for insourcing versus outsourcing, the debate is not as acute as it has been in the U.S., where Boeing hopes to solve some production issues by taking over Spirit AeroSystems. “The debate is not about the right level of outsourcing,” said Bruno Bouf, vice president of aerospace and defense at consultancy Capgemini. “It is, rather, about control of the supply chain.”
Controlling the production of future, innovative components has been one of the points at issue. “It is often when preparing for the future that we identify [crucial] production technologies and make verticalization decisions,” Grange said.
Taking over Aubert & Duval—a supplier of titanium, steel and materials for hot sections in turbine engines—thus made sense, she said. Airbus, Safran and Tikehau Ace Capital acquired the ailing metallurgy company from Eramet in 2023.
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