Airbus’ warning to suppliers might not change supply chain behaviour, says Vendigital
Global procurement and supply chain specialist Vendigital has cited that the recent warning by Airbus to its suppliers regarding deliveries is unlikely to significantly change supply chain behaviour.
However, the warning is an example of tough talk on part of Airbus.
Last week, Airbus chief operating officer Fabrice Bregier said that ‘delinquent’ suppliers whose services fall short of expectations, leading to missed delivery targets in a specific business area, should not expect to pick up contracts elsewhere within the group.
The warning follows a series of technical issues caused by engine manufacturer Pratt & Whitney, which delayed Airbus’ A320NEO aircraft deliveries.
Airbus has also warned the suppliers that it would not hesitate to go for a company-wide boycott if they fail to meet the standard for the company’s businesses, reported Reuters.
Vendigital aerospace head Paul Adams said: “This latest warning from Airbus is another example of a dominant OEM exercising its authority in a bid to strengthen its market position and accelerate market entry.
“2017 has been a challenging year for Airbus suppliers so far as they face pressure to meet increasing total delivery rates. After a difficult 2016, A350 rates have been smoothed slightly, allowing businesses time to consolidate.
“Conversely, A320 NEO and A330 NEO rates have increased sharply and are starting to bite hard; forcing suppliers to make difficult decisions about whether or not to bring on extra capacity.”
Adams further noted that a tough line approach from Airbus could weaken critical supply chain relationships in a market, which has limited sources of supply and a high degree of risk.