Going Global By Outsourcing In Aerospace And Defense

By Author: Sandy Gallagher
Total Articles: 83
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F.S.O.W. CONSULTING develops fact-based strategic insights for senior executives around critical public and private sector issues. This executive brief is based on an in-depth study by our research and partner teams.

It is part of an ongoing commitment by F.S.O.W. CONSULTING to provide analysis and viewpoints that help companies realize business value.

Although global integration is an increasingly critical success factor for enterprises across sectors, the Aerospace and Defense (A&D) industry is less mature than others in this regard. The choice for A&D companies is either to delay taking action or to embrace the issue. We believe that companies that move now have the opportunity to strengthen their positions in the worldwide marketplace and optimize business results through more effective operations and better value propositions. For example, over the next 20 years, commercial aircraft deliveries are expected to shrink in Europe and North America but grow elsewhere. And if defense spending continues along today's patterns, predictions see the biggest growth in China and India, with less spending in the ...
... United States and dramatic reductions in the UK, Germany and France.

This means that business success will be increasingly dependent on how well a company can compete as a worldwide organization. For A&D companies, the challenge is to quickly transform into what we refer to as a "globally integrated enterprise." Outsourcing becomes a viable option to rapidly adjust to market demands and improve competitive advantages.

Today's Aerospace and Defense industry is going through challenging times. Major airlines are struggling to be profitable, and new priorities are changing where national governments will spend their defense budgets. At the same time, A&D companies are working to change their business models, and offer more innovative products and services. Mergers and acquisitions pose a continuous threat ­ even as new players enter the industry and heighten competitive pressure. Perhaps the most important change is the rapid globalization of the industry. It is no longer enough to be a regional success.

What is a globally integrated enterprise? A globally integrated enterprise is a new kind of organization ­ a step beyond today's "multi-national corporation." It can locate operations and functions anywhere in the world based on the right cost, the right skills, and the right business environment. It integrates operations horizontally and globally performing as a cohesive whole, not as a hub with outposts.

It is a company focused on connecting and leveraging sources of production and creating value, regardless of the physical location or the organizational ownership of these resources. It involves close interaction across its ecosystem of internal and external stakeholders, including employees, customers, partners, government agencies and other third parties with a stake in a product or service. Characteristically, a globally integrated enterprise:

Partners with other companies in the supply chain that offer better efficiencies

Achieves a larger global footprint­ via alliances or consolidation with companies that are good strategic fits

Integrates the entire ecosystem(both internally and externally) and discourages sub-optimized silos

Specializes on what the company does best and outsources or partners for the rest

Strives for innovation in the company's business model, operations and products

Develops its human resources by recruiting and developing employees on a global basis and cultivating leaders who can perform effectively on a global stage.

F.S.O.W. Consulting Helping Small Business Succeed, Medium Business Rapidly Adapt to Change, and Fortune 100 Companies Profit with Six Sigma Consulting. Among our many services like SEO and consulting we also offer professional outsourcing services