Keys To A Flexible Supply Chain

Laura Karbach first started at RECARO Aircraft Seating in 2017 as Head of Strategic Purchasing, before assuming responsibilities for Quality Operations in 2019. From her role in establishing the new Strategic Purchasing department and the realignment of Indirect Purchasing to the optimization of the incoming goods inspection process and the digitalization campaign in Quality Operations, Laura has made a great impact on the processes at RECARO Aircraft Seating.

Laura joined the RECARO Executive Board in 2022 as the Executive Vice President Supply Chain & Sustainability, where she oversees the company's efforts to reduce the carbon footprint throughout the entire supply chain. 

Geopolitical developments and the pandemic are forcing companies to rethink their supply chains, moving from cost optimisation to a resilient and adaptive sourcing strategy.

Supply chains are a fragile part of business, regardless of the industry. According to a consultant at McKinsey, supply-chain disruptions cost the average organisation 45 percent of one year’s profits over the course of a decade. The former approach to supply chains considered quality, lead times, pricing and availability, prioritising cost-efficiency above all else. That’s not enough anymore. With global supply chain disruptions and material shortages at an all-time high, companies must consider several different factors when building a flexible supply chain. Complexity is added as the development of global markets, currency effects, pandemic, political influences and fluctuating customer demands are not foreseeable anymore. This is making heightened risk assessment a necessity. The previous tools, such as digitisation, remain, although now, they need to be reconsidered and reassessed under the rapidly-shifting facets.

Supply chains must be cost-efficient, resilient and agile, while simultaneously enabling automatisation and leveraging human talent. It’s a constant battle for global organisations to optimise their supply chains while juggling all these factors.

 Cost Efficiency

Obviously, cost is a major issue, especially in today’s climate. However, building supply chains specifically around parts pricing can backfire. Considering the total cost of ownership is essential in order to take the right sourcing decisions. It’s a balancing act, which requires diligent data collection and a big-picture strategy. Reframe your perspective by asking, “how can I keep costs top-of-mind while also creating a flexible strategy that can quickly pivot when needed?”

Resilience

From aircraft seats to consumer goods, the pandemic demonstrated the importance of investing in processes that can withstand global crises and unprecedented disruptions. The only way a supply chain can endure is if risk management is implemented and your supplier base is closely monitored by experienced buyers. Both multisourcing critical materials, and maintaining a high level of visibility to better anticipate future problems can facilitate more durable processes. Fleshing out capabilities, both on the digital and human talent front, will also help fortify a company’s supply chain.

As soon as projects become critical, more frequent updates to review the status need to be requested. Heightened visibility will help when things go wrong and fast reactions are required. This will result in the collection of significant and relevant data, which enhances the use of digital tools.

Agility

Making agile decisions is only possible with diligent planning and resources. At RECARO Aircraft Seating our global footprint with four production sites worldwide has a significant impact on our responsiveness to fluctuations in customer demands throughout our product portfolio. It also gives us the possibility to quickly react to significant changes in exchange rates, price developments or global disruptions we might face.

Our global supply chain strategy enables us to mitigate risks by setting up the right supplier base per commodity as well as focusing on materials we use as well as compliance to the upcoming supply chain act.

Automise

 Investing in digital technologies will help increase transparency for long-term planning while simultaneously managing day-today activities. This big data approach will help your supply chain employees to focus on their main tasks instead of spending time for setting up reports manually, which can lead to lower labour costs.

Clear visibility is key as global companies navigate unstable supply chains and transportation delays. Programs that help teams pivot resources and transportation statistics on a dime are vastly underused by corporations, which is why organisations may struggle with efficiency and optimisation. Auditing the programs currently being used will ensure that the investment in the digital processes is appropriate.

We can’t be everywhere at once, which is why these tools should be leveraged to best fit business requirements. There is no cookiecutter approach to supply chain, and each business must take unique decisions for their specific scenario.

Human Talent

Although the need for digital support is a main focus, people also play an integral part in making your company’s supply chain more flexible. Investing in automated systems will have little impact if suitable staff isn’t available to define smart processes and reporting structures creating the transparency needed for management to take the right strategic decisions. Equipping human talent with the proper tools and capabilities is more important than ever, as the pandemic has significantly accelerated our use of technology.

Obviously, digitisation makes some aspects of the business much easier, and managing these various pieces can only be handled by skilled employees.

As a global company, RECARO Aircraft Seating has fully grasped the importance of not only having the right processes, but also having the right people driving the supply chain. A waitand- see approach is no longer effective in the new age of supply chains: RECARO actively seeks out the go-getters, the ones with a problem-solving mentality. In addition, the “human touch” of the supply chain goes hand-in-hand with customer service, which is a cornerstone of our business model. Full transparency cannot effectively be provided by a program, only by a skilled employee who can share updates and provide peace-of-mind to both customers and suppliers as needed. Shaping the supply chain is an exciting task which is becoming even more interesting by the current challenges.

Enhancing a flexible supply chain network is key to remain a best-in-class company in our business field. Supply chain is one of our key competencies and will help us to even navigate through turbulent times.