Supply chains have been struggling ever since the pandemic started two years ago. The global disruption of prolonged lockdowns and quarantines has continued to disrupt the business world. Additional elements, like China’s zero-Covid policy, have repeatedly interfered with shipping schedules.
Factors like the Great Resignation have severely affected the economy. Businesses are struggling to operate, and many individuals don’t have a steady income. Russia’s invasion of Ukraine also sent out a supply chain ripple effect.
Supply chain issues have affected every sector of the economy, at this point. Even so, the aerospace industry is one area that is feeling the pressure more than most.
Peter Deragon, MD of Stanton Chase Los Angeles, already addressed the issue of ongoing backlogs in the aviation industry back in February of 2022. However, those pressures haven’t eased since, which is why we felt the subject needed a further update.
As of the summer, one report after another has highlighted the growing supply chain woes continuing to afflict the aerospace industry. Major jet suppliers, including heavyweights like Airbus and Boeing Co, have cut their delivery projections for the year, citing a shortage of everything from castings to raw materials as the cause for the lowered forecast.
A resurgence of travel demand from a consumer base that has finally emerged in force from quarantined seclusion has only exacerbated the issue. Reports also claim that Airbus and Boeing estimate that current supply chain shortfalls could persist until the end of 2023.
Critically, this bottleneck of supply can’t be traced to a single issue. That means it requires more than a single solution to address it. Engines, semiconductor chips, and other parts are missing from nearly completed planes that are sitting on the tarmac waiting to fly.
Consumers may have become complacent with supply chain concerns at this point. However, it’s an ongoing reality that business leaders in the C-suite shouldn’t ignore.
Complacency in the present can lead to issues in the future. The nuances of prolonged supply chain issues in the aerospace industry can lead to a variety of problems.
For instance, it’s no secret that aviation depends on flight. If planes are airborne, they’re contributing to the economy. If they’re grounded, they’re not just sitting idle. They become a liability that companies must maintain.
In addition, fewer planes in the air mean less travel and more canceled flights. Consumers are already facing this in the plain light of day through well-reported stressful travel conditions. Behind the scenes, a lack of planes has the potential to also impact the ability to move freight from point A to point B. This can impact rates and the overall cost and speed of moving both people and goods.
Leaders can’t predict how the supply chain will look in 2023. However, based on the current trajectory, things don’t look pleasant.
The struggling economy has plenty of room to slow down even further. Inflation may have tempered after a catastrophic first half of 2022, but it will continue to slowly eat into spending power. In the meantime, rising interest rates have the potential to wreak their own unique, self-inflicted form of havoc on markets down the road.
With the situation unlikely to improve in the months ahead, members of the C-suite need to be proactive. From assessing costs to ordering priorities, it’s wise to set the stage to address economic pressure.
“With the situation unlikely to improve in the months ahead, it’s important for members of the C-suite to be proactive.”
It’s also wise to consider how you’ll recruit and retain your staff to keep your company in a position to succeed. By working with Stanton Chase, you can gain a recruitment partner with the tools, network, skills, and experience required to keep you at the forefront of the hiring world. Our experts can boost your speed-to-hire rate. We can help you find, court, and hire the best candidates before the competition can scoop them up.
Efficient, quality recruitment is an invaluable asset to have in your back pocket. It can give you an edge as you navigate the ups and downs that likely will come, in some form or another, from ongoing supply chain issues in the future.
Peter Deragon is the Managing Director of Stanton Chase Los Angeles. He is also the Global Practice Leader of our Supply Chain, Logistics, and Transportation Practice Group. Additionally, Peter is active in the CFO Practice Group and financial services, where he started his career.
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