Simulating the impact of external factors on aerospace supply chains

Abstract

Aircraft manufacturers have outsourced the design and manufacture of critical aircraft systems to strategic supply chain partners located around the globe to acquire competitive advantages and address the challenges faced by the modern aerospace industry. Aircraft manufacturers must therefore understand how their supply chains will perform throughout the duration of these partnerships as they become increasingly complex and influenced by external factors such as exchange rates, fuel prices and aircraft demand. Failure to consider the influence of external factors can hinder the effectiveness of these partnerships in achieving their strategic goals.

Supply chain simulation has seen increased application due to its ability to capture the non-linear, complex and stochastic behaviour of SC networks. However, no work to date has simulated the influence of multiple external factors on the performance of aerospace supply chains, the manufacturing activities performed within their members and the flow of cash and material between them.

This research presents a hybrid analytical-simulation modelling approach to connect the influence of external factors to simulation models of the supply chain’s manufacturing process flows for the purpose of supporting outsourcing decisions in the aerospace industry. Specifically, this research simulates the combined influence of exchange rates, inflation, price escalation, fuel prices, export tariffs and aircraft demand on the supply chain’s performance due to their relevance to the industry. A real life multi-tier supply chain is used as an exemplar for the developed modelling approach while a case study concerning a real-life inventory management problem demonstrates its applicability to support decision making.

The results demonstrate the unique insights that the developed modelling approach can provide to users regarding the influence of these external factors on their suppliers’ performance, enabling a greater understanding of the impact of their decisions from the suppliers’ perspective. These insights can be applied to identify risks within the supply chain and opportunities to enhance its performance through collaborative efforts. Techniques to reduce the time and effort required to construct and execute detailed simulation models are also presented, including the generation of manufacturing cycle time data via physics-based calculations and leveraging the strengths of the developed modelling approach to re-use simulation report files.

Date of Award	Jul 2021
Original language	English
Awarding Institution	Queen's University Belfast
Sponsors	Northern Ireland Department for the Economy & Bombardier Aerospace
Supervisor	Adrian Murphy (Supervisor), Joseph Butterfield (Supervisor) & Mark Price (Supervisor)