Aerospace Logistics: Key Factors In Its Management

Steve Schlecht
May 1, 2024
An airplane at a manufacturing plane with parts ready to be implemented into the body of the aircraft

Aerospace Logistics: Key Factors In Its Management

What is aerospace logistics? It is the management of handling and moving parts for the aerospace industry worldwide.

When working with our clients, such as NTN, which manufactures ball bearings and wheel hubs for airplane landing gears, they rely on warehousing providers and aerospace 3PLs like Buske Logistics to handle and ship airplane parts worldwide.

Key Factors in Management of Aerospace Logistics

Understanding aerospace logistics involves knowing important factors to ensure smooth operations and compliance with industry standards.

Below is a checklist and then a deep dive detailing the most important aspects in executing an aerospace logistics strategy.

1.      ‍Certifications and Compliance

2.      Experience and Expertise

3.      Technology Integration

4.      Warehousing Capabilities

5.      Transportation and Handling

6.      Quality Assurance

7.      Customs and Compliance Expertise

8.      Scalability and Flexibility

9.      Financial Stability

10.   Customer Service and Support

What Are the Certifications for Aerospace Logistics?

Certifications are the cornerstone of aerospace logistics, serving as a benchmark for quality and reliability. Aerospace logistics providers should have ISO 9001 and AS9100 certifications to meet high quality and safety standards.

A complete list of certifications for aerospace logistics includes:

  • AS9100D: This is the aerospace industry-specific standard for quality management systems. It encompasses all production areas, from design and manufacturing to assembly and service. Providers with this certification meet rigorous standards for quality and safety in aerospace logistics.
  • ISO 9001: While not aerospace-specific, ISO 9001 is critical for quality management systems. It helps ensure logistics providers consistently meet customer requirements and quality benchmarks.
  • C-TPAT (Customs-Trade Partnership Against Terrorism): For logistics providers involved in international transport, C-TPAT certification is required to import and export goods. This U.S. Customs and Border Protection (CBP) certification was created for the security of private companies' supply chains with respect to terrorism.
  • IATA (International Air Transport Association): Certification from IATA is important for logistics providers handling air freight. It ensures they comply with IATA's regulations for the safe and efficient transport of goods by air.

Additionally, compliance with international trade laws ensures that logistics operations run smoothly without legal complications. Ensuring your provider meets these standards can mitigate risk and enhance operational efficacy.

Experience Needed for Aerospace Logistics

The right logistics partner brings years of industry-specific experience. This expertise translates into a deeper understanding of aerospace logistics complexities, including handling sensitive or oversized components. Critical experience includes:

  • Clients: Experience with Fortune 500 and enterprise clients. Companies with experience working with Fortune 500 clients are likely to have the resources needed for aerospace logistics, including the right teams and systems in place.
  • Knowledge: Proven work handling the work outlined in the service agreement is important. These activities include previous contract warehousing arrangements, sequencing, fulfillment of parts, and light assembly or also called value-added logistics.

Required Technology

The right technology and integrations are non-negotiable. Aerospace manufacturers can send tens of thousands of orders or transactions daily to their suppliers or 3PL partners.

An aerospace manufacturer will typically partner with a 3PL with the necessary technology to execute the logistics strategy. The critical technology and systems that are essential for aerospace logistics include:

  • Enterprise Resource Planning (ERP): Large manufacturers often use an ERP, like SAP, to plan and issue orders to their suppliers.
  • Warehouse Management System (WMS): A WMS is where the inventory is systematically held and used to pick parts from orders. Made4Net is an example of an enterprise-grade WMS solution.
  • Electronic Data Interchange (EDI): EDI is the conduit between an ERP, WMS, and TMS. It moves important information like orders and inventory from a company's system to the 3PL.
  • Transportation Management System (TMS): This system coordinates carriers' pickup of orders once they are picked up and staged for delivery.

Aerospace manufacturers and 3PL companies can benefit from utilizing technology to coordinate logistics for aerospace and aviation companies. These strategies provide greater control over the supply chain, reducing risks and improving decision-making.

Warehousing Best Practices for Aerospace

Effective aerospace logistics require specialized warehousing solutions because of the sensitivity of the parts and legal considerations involved. These facilities require specialized equipment to meet specific needs, including climate control and special handling for delicate materials.

A full list includes:

  • Climate Control: Proper controls for parts that are sensitive to humidity and temperature.
  • Special Handling Equipment: Many parts are oversized and heavy and require unique forklifts and handling equipment.
  • Security Measures: Security controls are necessary in restricted areas to ensure that only authorized personnel can enter sensitive storage zones.
  • Warehouse design: Fulfillment of after-market parts will need an efficient and organized picking arrangement. Adequate space is crucial when doing higher-value-added logistics work, such as subassembly. Proper handling and storage of equipment are also important in this type of work.
  • Correct Location: The location of the 3PL is important. To save money, the manufacturer or supplier should pick the option that requires the shortest shipping distance. Transportation costs are usually the most expensive part of a company's supply chain. Mapping a warehouse using a 'center of gravity analysis' or 'network analysis' can help optimize a supply chain.

Quality Controls for Aerospace Logistics

Quality assurance in aerospace logistics is vital. Providers should have robust processes in place for quality checks at various stages of the logistics chain.

Regular audits, compliance checks, and continuous improvement programs are essential practices that help maintain high standards and minimize errors.

Other important factors to consider:

  • Detailed Receiving Inspections: Conduct thorough inspections of all incoming materials and components to ensure they meet specified standards.
  • Regular Audits and Compliance Procedures: This includes auditing requirements to keep certifications noted above and ensure accurate inventory counts.
  • Documentation and Traceability: Implement a traceability protocol to track the lifecycle of each component, from receipt to shipment. The 3PL's WMS system should capture this.
  • Environmental Monitoring: Systems and controls should be in place to monitor climate requirements year-round.
  • Supplier Quality Management: This doesn't only apply to aerospace 3PLs like Buske Logistics; a manufacturer should collaborate closely with suppliers to ensure they meet their quality standards as well.
  • Preventive Maintenance: A preventive maintenance schedule for all critical warehouse equipment to reduce downtime and prevent malfunctions. This includes center lines (CLs) checks on equipment and preventative maintenance checks (PMs) such as lubricating equipment.

Transportation Requirements

A competent logistics provider offers a variety of transportation options tailored to the needs of the aerospace industry.

These modes of transportation include air freight for urgent deliveries, sea freight for larger shipments, and ground transportation for regional distribution. Each mode should be assured of safe handling practices to prevent damage during transit and ensure the integrity of the components.

Key considerations in setting up transportation and handling:

  • Specialized Transportation Modes: Carriers that can handle time-critical and varying sizes and weights of aerospace parts.
  • Transportation Insurance: These are typically high-valued parts, and insurance is a crucial consideration for a given shipment.

Customs and Compliance Expertise

Navigating customs and ensuring compliance with international laws can be challenging. Providers with expertise in this area can efficiently handle the complexities of cross-border transactions, reducing delays and avoiding penalties.

This is particularly important for aerospace components that often need special import and export requirements. Other key points for setting up the processing of customs and compliance include:

  • Expert Knowledge of International Trade Laws: Maintain up-to-date knowledge of international trade laws, including import/export restrictions, tariffs, and trade agreements relevant to the aerospace industry. A process is to outsource this to a certified customs broker who knows the laws and helps mitigate your risk as a supplier or manufacturer.
  • Importer and Exporter of Record: The importer or exporter of record is the individual who is ultimately responsible for complying with all regulations and laws. Companies can use customs brokers to clear shipments through trade authorities, but the entity that's ultimately responsible as the importer or exporter of record is the company or agency shipping the goods.
  • Surety Bond: A surety bond is mandatory to import and export parts to a country. If a product's value or quantities are undervalued against trade laws upon importing or exporting, the authorities in that country can use the bond to cover the difference in the value when collecting taxes and duties.
  • Contingency Planning: If a shipment is delayed because of customs, a contingency plan should be in place to mitigate any downtime at the end manufacturer.

Scalability and Flexibility

A critical feature of a logistics provider is the ability to scale services with the client to meet fluctuating demands.

Other considerations for evaluating scale and flexibility include:

  • Workforce: A sizable workforce is necessary from a 3PL or contract warehousing provider that can handle a full aerospace logistics plan. That includes a dedicated IT team, HR teams to hire and staff to demand, and adequate operations management to ensure success.
  • Advanced Forecasting Tools: At Buske Logistics, we have a team dedicated to creating dashboards for demand in labor and shipments to service advanced aerospace and logistics providers sufficiently.
  • Customizable Service Offerings: Aerospace logistics is nuanced. No operation is the same, meaning custom solutions are needed.

Financial Stability of a Logistics Provider

Choosing a financially stable logistics provider ensures long-term reliability and security. Financial health indicates a provider’s ability to invest in quality resources and sustain operations, even in turbulent times. A few metrics to consider when evaluating aerospace logistics providers:

  • Debt to equity (D/E): A company with a lot of debt increases the risk of the relationship in case revenues drop and it cannot service its debt payments. A common rule of thumb and acceptable amount is a D/E ratio below 2.0.
  • Diverse Customer Base: If a 3PL or logistics provider concentrates business activities on one customer, it could negatively affect the relationship between the aerospace manufacturer or supplier and the logistics provider. An example is if the contract warehousing company loses all its business with a client like Proctor & Gamble, will it be able to cover its debt payments and day-to-day operations?
  • Strong Capital Reserves: The aerospace 3PL or logistics provider should have enough cash on hand to withstand a downturn in the economy and have a contingency plan in case it does.

Factors in Customer Service and Support

Exceptional customer service is the final piece of the puzzle. A provider’s ability to offer prompt and effective support can make a significant difference in managing the logistics chain smoothly. This includes:

  • Dedicated account management
  • Proactive Communication: This includes communication of information based on certain events. An example is inventory accuracies above a threshold or customs issues that could hold up the client's product in transit.

Conclusion

Evaluating an aerospace logistics provider involves careful consideration of their certifications, experience, technological prowess, and operational capabilities. By scrutinizing these aspects, aerospace companies can select a logistics partner that not only meets but exceeds their expectations, ensuring smooth and efficient operations.

Choosing an Aerospace Logistics Provider and 3PL

Are you ready to take your aerospace logistics to the next level? Talk to Buske Logistics about your advanced aerospace and defense logistics needs. Our team works with leading Fortune 500 manufacturers worldwide.