New SCRIA package brings closer business relationships to UK aerospace industry

Citation

(1999), "New SCRIA package brings closer business relationships to UK aerospace industry", Aircraft Engineering and Aerospace Technology, Vol. 71 No. 4. https://doi.org/10.1108/aeat.1999.12771daf.009

New SCRIA package brings closer business relationships to UK aerospace industry

New SCRIA package brings closer business relationships to UK aerospace industry

Keywords: Aerospace industry, Supply chain, SBAC

Getting away from old style poker playing was how the concept of the new SCRIA package was described at its recent launch. Introduced by The Society of British Aerospace Companies (SBAC) the new SCRIA package aims to improve relationships between companies throughout UK aerospace. SCRIA - supply chain relationships in aerospace - aims to promote open and honest dealing and a commitment to partnership in managing the commissioning, production and supply of goods and services throughout the UK aerospace industry (Figure 2).

The SBAC believes that by adopting the SCRIA package, companies - both large and small - will not only improve profitability, service and product quality, but will also see a reduction in lead times and costs. It also considers that in the light of increased competition in the UK and world aerospace markets, SCRIA is recognised as a significant factor in creasing companies' ability to succeed through improved customer/supplier relationships.

Figure 2 The SCRIA process

Central to SCRIA is its Code of Practice which provides a framework for how companies can work together to seek common benefits, and how replacing confrontation with co-operation can lead to more effective supply chain relationships. According to the SBAC companies that adopt the SCRIA Code of Practice can expect impressive results in a short period of time. Statistics such as a 60 per cent saving of costs and lead-time reductions of 60 per cent are thought to be highly achievable.

Supply Chain Relationships in Aerospace (SCRIA) was initiated by the SBAC in October 1995. It is one part of the DTI-sponsored Competitiveness Challenge, a raft of initiatives which recognises the importance of the aerospace industry to the UK economy, and aims to improve working practices within the industry.

SCRIA's function is to provide a framework for constructive co-operation between all companies involved in the aerospace supply chain. SCRIA encourages companies to seek common benefits in all dealings, rather than negotiate for individual gain. This change is effected through a variety of practical mechanisms, including custom-designed "Working Together" workshops attended by members of actual supply-chains and a "champions" support network, containing representatives from all of the leading UK aerospace companies.

Commenting on the SCRIA launch, Rob Crook, Chairman of the SCRIA Steering Group and Material Director of GKN Westland Helicopters Ltd, says:

We are one of the few countries in the world with a truly comprehensive design and manufacturing ability in aerospace products. However, we cannot afford to be complacent. The UK aerospace industry must pursue improved competitiveness with relentless determination to succeed; hence the need for the SCRIA initiative.The industry is already familiar with the broad notions of supplier partnership but SCRIA can, and will, bring these ideas alive by providing specific tools and techniques to improve relationships in the supply chain. Adopting SCRIA is fundamental to coping with increased competition both in the UK and world aerospace industries.

The SBAC points out that as part of the SCRIA package, a number of practical support services are offered to participating companies. These include: assistance in implementing the SCRIA Code of Practice, custom-designed training courses, advice from the Champions' Support Network - experienced industry personnel, SCRIA road shows and seminars and a database of best practice case studies

The Relationship Evaluation Tool

The SCRIA Relationship Evaluation Tool (RET) has been designed, by Professor Lamming and his team at Bath University, to help both customer and supplier to assess the performance and condition of their supply relationship, and the way they would like it to work (Figure 3). Used in conjunction with the SCRIA Code of Practice, the tool provides a framework to evaluate how well the relationship is working.

In so doing, it helps to determine issues such as: how much it costs to do business, how well new products are developed and how well deliveries of parts keep to the planned schedule.

The SCRIA Tool can also help to identify ways of improving the commercial benefits that both parties - customer and supplier - obtain from the business transaction. SCRIA is managed by the SBAC and is part of its Competitiveness Challenge programme, which is sponsored by the DTI.

Figure 3 The RET process

Over 110 British companies are said to have already "signed up" for the SCRIA programme including British Aerospace Airbus Ltd, British Aerospace plc, GEC Marconi Ltd, GKN Westland Helicopters and Lucas Aerospace Ltd.

Case studies

GKN Westland Helicopters Ltd (GWHL) wanted to look at ways of enhancing the capability of its suppliers and, more specifically, eliminate 20 per cent of the operational costs associated with its helicopter navigation system project. This project involved the UK MoD as the customer, Litton Systems Inc. as the supplier and line. The technical requirements were established by Agusta of Italy as GWHUs European partner.

Historically, when establishing a long-term development contract with a supplier, the approach has been competitive tender with the focus on reducing the acquisition costs. However, the short-term successes that result from this method have often seen the suppliers attempting to operate on a shoe string budget with reduced margins, sometimes leading to serious delays.

GWHL opted for a change of approach based on collaboration which would include the total supply chain - customers, partners and suppliers.

Utilise the SCRIA Code of Practice and elements of best supply chain practices to pursue close collaboration between the companies involved, without the continued budget constraints restricting the sharing of information.

The process was undertaken in stages by a cross-functional Integrated Product Team, initially comprising of GWHL personnel only but ultimately including the entire supply chain.

GWHL decided not to undertake any lengthy competitive tender process but focused on the sharing of information in order to establish a firm technical baseline. The technical requirements were established by Litton, enabling the work and documentation to be generated using Litton's procedures, so saving time and reducing costs. This open relationship allowed focus to be given to the total acquisition costs and downstream activities which are often neglected until the 11th hour. Instead, activities were planned and measurable controls put in place to reduce risk by pooling shared knowledge.

GWHL and Agusta enhanced their relationship by sharing the benefits of an improved system whilst jointly investing in its development, recognising the return thereafter. This allowed the companies to approach the customer base, including UK MOD, and offer a zero price enhancement.

Both companies believe that the open, trusting relationship is paying dividends in all aspects allowing risk to be clearly identified early and the team to resolve issues quickly. The Integrated Product Team approach has enabled the main stakeholders to be identified and gives swift access to key people, reducing the overall risk still further. Costs and budget targets are being achieved with overall perspective that this project will result in a "win-win" situation throughout the supply chain.

GWHL and Agusta report that a number of tangible results have been achieved including: both companies targeting significant cost savings and the collaborative relationship achieving a 60 per cent reduction in lead-time.

Aluminium Supply Aerospace Flight Refuelling Ltd

Another example of the effectiveness of the SCRIA approach was the supply of cut to size product between Flight Refuelling Ltd (FRL) and Aluminium Supply Aerospace (ASA). This had led to a time-consuming duplication of paperwork. Each supply batch had to be signed for and booked in individually - it was calculated that eight/nine hours per week were being wasted at ASA and around five hours at FRL, the majority of which was duplication of effort.

The two companies decided to collaborate in order to solve the problem, using the SCRIA Code of Practice as a framework.

The companies listed their objectives as; for ASA, to reduce the amount of paper work used in its system, to improve efficiency within the quality assessment department, reduce the error-rate in the supply chain - provide a more efficient service, be environmentally friendly by reducing paper work. For FRL, streamline its system and reduce costs by cutting back on the amount of its scanning and filing, also to consider involving key bodies within the industry (e.g. CAA and British Standards) to assess possible changes to procedures, custom and practice in order to identify other potential areas of waste.

Following a number of meetings at ASA involving all departments affected by the changes, a process map was developed to identify all the steps to be taken. This process emphasised the importance of reducing paper work, while maintaining traceability.

A proposal was put forward to replace the complex system of ordering, raising, approval, certification, reception, stamping and filing of each order, with a system based on job cards. These cards would be transferred between the companies electronically, and would not be copied or filed unless absolutely necessary. On completion of the process, the job card could be authorised and the details completed as normal.

Both companies agreed that this was the best solution to streamline the operation. The CAA and British Standards had to approve the changes. Accountability and traceability had not been compromised.

The new system has proved to be a great success. Personnel at both companies had adapted with little training and no disruption to the business.

Specifically, FRL has reduced its archiving costs, streamlined its goods inwards system and reportedly reduced data duplication by 90 per cent. Major steps have also been taken towards developing a more environmentally friendly, paperless system.

ASA has a proven system, which is being used as a marketing tool with other customers.

Overall, an atmosphere of partnership and co-operation now exists between the two companies and they have a template on which to base future agreements.

Details from Alex Burns, SBAC (SCRIA). Tel: +44 (0)171 227 1023, E-mail: HYPERLINK scria@sbac.co.uk