There was a time not long ago when manufacturing aerospace parts was a fairly straightforward business. OEMs such as Boeing and Airbus would design all of the major subsystems in an aircraft and then provide suppliers with the specifications of the parts they wanted built. Suppliers would comply, often packaging paper documents containing testing and other information along with the requested parts.

For many aerospace suppliers, however, that simple "build-to-print" business model is a thing of the past. Today, OEMs are turning over more responsibility for designing, assembling, and even maintaining subsystems to suppliers in the interest of reducing lead times and sharing program risk and cost. At the same time, OEMs are demanding that suppliers provide more — and more up-to-date — information about things like what specific parts are in a given subsystem, when the parts were produced, by whom, under what conditions, and what quality tests were performed on them.

Suppliers that can provide detailed part pedigree information seamlessly and digitally stand a better chance of holding onto customers — and gaining new ones.

"OEMs need to know where we are at in terms of our performance and our processes," says Tim Heer, ERP implementation manager at Leach International, a maker of aerospace electrical parts and subsystems. The company is undertaking a major system upgrade project in order to provide better part traceability information to OEM customers, such as Lockheed Martin, Bombardier, and Boeing. "If a customer knows you're best-in-class, you are seen as a preferred supplier, and that gives you the option of moving work from lower-performing suppliers to you."

Like Leach, many aerospace suppliers — even small and mid-sized ones — are revamping processes and deploying a wide range of technologies that can help OEMs trace and understand the performance of the parts in their airplanes. Those technologies include ERP systems with lot-level tracking, sensors for assessing the real-time performance of critical parts, systems for pulling together all quality-related information, and RFID-enabled systems that can help OEMs and suppliers more easily track parts and recognize their pedigrees.

Increased Scrutiny

Of course, aerospace OEMs' move to an outsourced business model isn't the only factor placing pressure on suppliers to more fully automate the collection and dissemination of part traceability information. The specter of increased regulatory scrutiny from the Federal Aviation Administration and other organizations is also beginning to drive OEMs to demand easier, electronic access to part traceability information from suppliers.

Recent headlines about increased FAA regulatory attention have focused mainly on airlines' shortcomings in maintaining documentation related to their maintenance, repair, and overhaul (MRO) processes. There have been indications, however, that the FAA is paying more attention to how well OEMs and their suppliers are doing at updating flight readiness documentation that is required on all aircraft and major subsystems.

Recently, for example, aerospace engine manufacturer General Electric revealed that it was being questioned by the FAA about concerns that the company had failed to properly document engineering analysis before upgrading CF-6 engines installed on commercial aircraft. The missing documentation was to have detailed how long upgraded parts should stay in service and how often they need to be inspected.

"All of the major OEMs and tier-1 suppliers feel they are subject to increasingly strict rules of compliance," says Tom Captain, a principal at Deloitte Consulting LLP. "Historically, the compliance piece has been up to companies, not subject to police actions. But, because of increasing charges from whistle-blowers, the compliance focus from the FAA is increasing."