LOGISTIC CHALLENGES OF THE CESSNA AIRCRAFT COMPANY 1
LogisticalChallenges of the Cessna Aircraft Company
Logistic Challenges of the Cessna Aircraft Company
CessnaAircraft Company manufactures business and military aircraft. Cessnadeals with procurement, maintenance, and transportation of militaryand civilian materials and personnel. They are best known for smallpiston-powered aircraft, single engine jets, and luxury businessjets. The company is one of the world`s oldest airplanemanufacturers. They have been in business for over 75 years,according to Harris (2003). A company known as General Dynamics wasthe sole financial investing backer of Cessna, which sold Cessna toTextron. In March of 2014, Textron Aviation Services allowed Cessnato become its subsidiary.
Since 2014,Cessna Aircraft Company, working under Textron, has continued to bestronger regarding sales than any of its competitors. The company isconsidered as one of the world`s fastest civilian airplanes flying,the 92 Cessna Citation X. It also has 21 extensive servicefacilities, 60 mobile service units, which provide immediate aircraftsupport. Cessna has operational technicians who are available toassist customers regarding maintenance inspections, parts, repairs,avionic upgrades, and equipment installations.
For any company to have the right logistics, operational system candetermine the rate of production and longevity of that particularbusiness (DLCA, 2015). Cessna Aircraft Company has been able tocreate a positive impact in the transformation of its supply chainprocesses. It also stands out as a leader in the industry. Thecompany has been able to achieve real collaborations with partners tohelp reduce overhead costs related to aircraft operations. Becoming acompany that offers online resources with interactive courseware andinternational software integration has its challenges (DLCA, 2015).This paper will focus on some of the challenges in logistics that theCessna Aircraft Company has faced how they have overcome them toremain a leader in their field, and what the plans are for keepingthe logistics operations ahead of their competitors.
LiteratureReview
Globally, Airlines have been making plan orders, while seeking toembrace new technology. As a consequence, the aerospace industry isexperiencing growth and aerospace suppliers to be more innovative andflexible to remain ahead of their game (Harris, 2003). In the nextfew years, the industry will likely experience numerous challenges,and notably for Cessna, since suppliers must create and design morecomplicated components and systems that have better technologicalcontents, reduced lead times and costs, which are more friendly (Lee,2012). Cessna will also face challenges that are associated withextending their supply chain presence into the growing markets andenhance production capacity and share increased operational andfinancial risks to those that manufacture original equipment (Lee &Katzorke, 2010). Such challenges have a direct effect on the supplychain management of Cessna, which should, therefore, be moreresponsive and vigorous (Harris, 2003).
Cessna handles a lot of expenses related to purchasing that seeks todecrease or eliminate or free up overworked buyers to deal with moretactical issues. To circumvent numerous delays in development andcosts, the company decided to outsource, while at the same time,identifies that supplier acceptance is crucial to the effectivenessof any procurement system (Myerson, 2012 Blythe & Megicks,2010). As a consequence, Cessna sought a system that was friendly tothe suppliers, and not decreasing costs, while hurting itsrelationship with vendors. The company further realized that itrequired a system that can deal with all types of providersirrespective of their technological capability. This move resulted inthe establishment of an enhanced commodity team that assistssuppliers as it deals with creating a chain for the vendorsseparately (Handfield & McCormack, 2008).
Challenges
One problemwith logistics facing Cessna Aircraft Company is its slow responsetime for delivery of aircraft parts. This is a problem that remainscrucial to the company`s smooth operations considering access tocomponents, in the aerospace industry, remains at the top of theirlist. Following a boom in commercial aircraft, Cessna now experiencesharsh reality from its logistics and supply chain management. Lookingat a wider perspective, growth in the aerospace industry resulted inthe industry having to deliver an immense backlog. According toMonczka et al. (2002), a study of the aerospace industry by theglobal business advisory firms show an increase in the rates ofproduction of aircraft by 45%, making it the biggest challenge whenit comes to response time in parts delivery (Myerson, 2012).
Secondly,Cessna Aircraft Company faces a challenge, which is due to developingbetween inventory and service. High demand experienced by the Companyis a huge problem, especially in developing a balance betweeninventory and service. It is also as a result of ensuring the companykeeps its planes flying, which in turn, puts pressure to servicingand maintaining a list of all its items such as property, contents inthe enterprise, and goods in stock. According to Heizer & Render(2004), those pressures impact on the company`s logistics and supplychain management. It also impacts on the company`s finances sincethere is a need to seek the services of third party logisticsproviders to solve issues with maintenance, delivery, and balancingservices with inventory.
Thirdly,Cessna Aircraft Company experiences logistics challenges with itsnon-monitoring of supplier performance, which in turn, makes itsinvolvement with service costs and benchmarking. Both the new and thecurrent production line models in the company require improvement inthe process of its inbound parts, a challenge to supplier performancenon-monitoring. Harrison (2003) noted that aerospace companies striveto streamline movement and synchronize its supplier process, which isan issue facing Cessna Aircraft Company. The company has given itstight production time that requires a specialized kind of businessfaces the challenge resulting from limited personnel to monitor itssupplier performance making it difficult to account for all theoperations.
Anotherchallenge is the mismanagement of sub-contractors. Everything thatgoes into the making of aircraft, from engine components to thescrews, has to attain set quality controls for purposes of safety. Inaerospace, compromising on quality, which in other industries couldbe inconvenient, is fatal (Lee & Katzorke, 2010). Because ofthis, Cessna Aircraft Company, in this case, cannot handle everythingto meet stringent quality standards for durability and safetypurposes. This is where subcontractors come in to provide therequired parts however, the challenge the company faces is theirmismanagement. Handfield & McCormack (2008) warn that aerospacecompanies must satisfy their quest that the parts required fromsubcontractors meet their quality standards and set deadlines. Again,the company in question may fail to carry out a complete audit of thecontractors to confirm that they respond to their requirements. Mostoften, the company is presented with this problem as it tries toascertain their status.
Finally,non-availability of parts is a logistics challenge Cessna face, whichmeans there is no reliability from third parties for timely deliveryof parts. The need for quality parts means the company is intertwinedbetween delivering quality and meeting its demand for quality parts(Blythe & Megicks, 2010). Mismanagement of subcontractors in thecompany means another challenge, which is a failure to get qualityparts. The pressure to keep the planes flying means the partners andcarriers must maintain this flow, which also includes emergency andregular replacement of parts. This is a costly undertaking for thecompany`s logistics department. This adds to the company`s otherpressures, which are consolidating major partners, depressed qualitydemand, rising debt, escalating costs of production.
References
Blythe, J. & Megicks, P. (2010). Marketing planning.Harlow, England: Financial Times / Prentice Hall.
Digital Logistics Capacity Assessments. (2015, August). RetrievedApril 25, 2016, from http://dlca.logcluster.org/display/LOG/AirOperations/
Handfield, R. & McCormack, K. (2008). Supply chain riskmanagement. New York: Auerbach Publications.
Harris, R. (2003). Cessna history, Aviation History & Industry,Aviation Answer-Man. Retrieved April 25, 2016, fromhttp://home.iwichita.com/rh1/hold/av/avhist/csn/cessna_x.htm
Harrison, J. (2003). Strategic management of resources andrelationships. New York: Wiley.
Heizer, J. & Render, B. (2004). Operations management.Upper Saddle River, N.J.: Pearson Prentice Hall.
Lee, W. (2012). Creating entrepreneurial supply chains.Ft. Lauderdale, FL: J. Ross Pub.
Lee, W. & Katzorke, M. (2010). Leading effective supplychain transformations. Ft. Lauderdale, FL: J. Ross Pub.
Monczka, R., Trent, R., & Handfield, R. (2002). Purchasingand supply chain management. Cincinnati, Ohio: South-WesternCollege Pub.
Myerson, P. (2012). Lean supply chain and logisticsmanagement. New York: McGraw-Hill.