Airbus Crashes Hard — Is There a Spare Parts Connection?

There is a certain arrogance to suppliers in the A&D market (similar to the arrogance of those in the automotive industry). If you can meet A&D customer expectations (e.g., tight tolerances, just-in-time programs, quality, etc.), you can meet them in any industry. Automotive suppliers often claim to sit on a similar pedestal, suggesting that if you can serve auto OEMs (e.g., sailing through the PPAP process) you can serve just about any industry. There's some truth to both statements (and ironically, there's also often overlap lower down in the tiers in the A&D and automotive supply base). But given these types of fighting words, you'd think we'd be less likely to see crashes and failures relating in some way (at least potentially) to the supply chain. Guess again.

The A&D supply chain should, in theory, be one of the most regulated in the market. But when it comes to planes that have been put into service, it's difficult to track and monitor all of the spare parts that make it onto commercial and military aircraft -- despite all of the work that qualified suppliers go through. The magnitude of the problem is frightening. An article in Aerospace Manufacturing and Design recently noted that "According to an FAA estimate, about 520,000 counterfeit or unapproved parts are currently making it into planes annually, which is about 2% of the overall 26 million active parts. While 2% may seem like a small number, consider that a typical passenger aircraft contains up to 6 million parts, and consider the extreme tolerances for failure to which each part must adhere."

Industry insiders I've spoken with suggest that the counterfeit problem is even more acute in the case of smaller worldwide carriers where non-approved items may more easily find their way onto aircraft (either unintentionally or not). Might counterfeit parts have played a roll in the recent Air France and Yemeni Airbus crashes? Perhaps, but most likely in the latter case if at all (although general red maintenance flags have already been raised by the EU).

More important in the broader industry is that as increasing amounts of production shift to developing markets for both production and spare parts, it's likely the counterfeiting problem will remain and potentially increase. When it comes to China, in particular, we must all posit the question: can we really trust a regional supply base that has proven such little respect for intellectual property in other industries to apply different standards to A&D? It's unlikely, which makes this previous announcement from Boeing scary indeed.

One of the solutions is for procurement and supply chain organizations within A&D to apply as much diligence to monitoring the service parts environment as the production one. Ultimately, even though replacement and maintenance decisions, monitoring and traceability rest with the carriers, OEMs and component suppliers will pay the ultimate brand-damaging price if counterfeit or unapproved parts end up in anyway becoming a contributing factor to the recent -- or future -- tragedies.

Jason Busch

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