The last pound of rivets…
I remember chuckling at the mental image, but then I stopped to seriously consider what the outcome might be of this emerging shortage of global parts in Aerospace & Defense. Part of me hopes that this is a transient phase of recovery. Having been on the rather bitter end of some global search quests in the past, usually in the hope of avoiding an AOG or simply escaping contractual penalties for line stoppages, I become increasingly aware that as an SME the quest to find stock of Aerospace parts is getting progressively harder.
Market dynamics, during and post pandemic, and anticipated recovery of market sectors has been the object of much speculation. Predictions have been mainly inaccurate retrospectively, probably because we have no prior recovery models that match the impact of the pandemic. In the worst scenario we risk buying into self-fulfilling prophecies. The primary imperative is business survival and that means taking tough and unpleasant decisions. Some of those decisions collectively have an impact.
The issue with radical survival measures, in any part of our Industry, is that you are forced to operate outside of your usual skill sets and the adaptations required to follow the re-emergence of global travel rapidly became a short-term tactic that was anything but short term.
Losses at airlines have been catastrophic to the normal functioning of supply chains and resources; resulting in a lack of skilled labour, cessation of outsourcing, shortage of parts, longer lead times and some desperate business decisions. It is perhaps true that we will never fully understand the true impact of the pandemic because everyone was “toughing it out” and pretending for the benefit of their shareholders and their niche sectors that it was not quite business as usual, but you can trust us to continue to deliver…
The pandemic brought with it a counter intuitive element of business isolation, triggered by a lack of normal social contact and fueled by working at home and other workplace isolation measures. The issue here is that business is ultimately personal and while we all adapted to online meetings and their often-ludicrous decision-making mechanisms, we simply lost a bunch of human contact and interactions. A cup of coffee became a solitary pastime, and the corresponding increase of domestic tension became the norm. Seasoned networkers found themselves visiting virtual exhibitions and too many people and businesses hid behind their mobile phones. Company voice mail all but vanished as the stiff upper lip evolved into radio silence and we all spent far too much time in the simple act of making contact.
In this social silence we all recognized the need to continue to communicate whether by regular meetings online or by the unresourceful act of putting everyone on copy of an email just in case we were not communicating enough. I was struck for the very first time by the only two fundamental styles of spoken business communications. That is, communication from the centre/top as in direct statements, decisive and controlling behaviour and all the contexts of authority. As distinct from communication from the “edges” that, responded, asked questions, mostly avoided arguments, and was conversational in the context of protecting teams and groups. I enjoyed adapting my language styles as well as indulging in that rare art of listening.
All this took place intra-company and as we became further distanced from the market we once knew, here is true business isolation for the very first time. Taking decisions based upon competitor’s behaviour became our shortcut while clusters of marketing anecdotes became our new reality.
The microcosm reflected the macrocosm, the proverbial as above, so below.
What emerged from all this, if we were honest with ourselves, is that we over polarized the concept of competition being driven by sheer acts of business survival. Maybe, just maybe, all that seeded fear about the spread of that virus, that proverbial enemy without, actually reconditioned our thinking and our abilities to network.
If you get the chance, buy a book called Co-Opetition by Brandeburger & Nalebuff. Not part of this brief to make a summary of this book but let’s start by considering business as a more complex game of Monopoly. Business is a game in which money represents points, won or lost. Then the company which gathers the greatest numbers of points wins. The biggest opportunities in business don’t usually arise from playing the game better than everyone else, they arrive from changing the fundamental nature of the game itself to your advantage. Co-opetition is part competition and part cooperation. It describes the fact that in our current and challenging business environment, most companies can achieve more success in a dynamic framework than they ever could alone. As companies work together, they can create a much larger and more valuable market than they ever could by working individually. Companies then compete with each other to determine who gets the largest share of that market. In amongst that collection of suppliers, customers and competitors, the Complementors can change both the dynamic and the effect. Complementors have many forms and can range from formal Industry specific associations and networks to informal interest groups.
So, our communal goal is to get the Aerospace Industry up and running, though will that ever happen quickly with an inwardly facing collection of businesses whose only quest is survival ? All value networks have an overall commercial value, as each participant joins the value network the value of the whole network increases. Suppliers prefer the value network to always be in a state of under supply. Let that sink in. I have always found this to be anachronous because under supply can create market conditions for a new entrant, the total size of the value network is reduced by each “missed sale” and under supply always creates market friction. That tension is currently being increased by the adaptations of larger Aerospace distributors who have retracted to survival positions where there is an exaggerated focus on serving only their contractual customers. Those Distributors have indirectly contributed to the creation of a global network of stock The result is obvious, a lack of availability of common parts for aircraft repair and maintenance. As manufacturing lead times increase and adjust accordingly, that goal of recovery moves further into the future. Now I understand fully the sub-motivations of restricted supply, future monopoly positions and the overall motivations for global domination but I believe there is an emerging “over tipping point” where recovery is no longer viable because the restoration of supply chains is the neglected communal goal for our Aerospace collective. The “last stock position” is powerful, that much is undeniable in terms of scarcity but hanging on to the last barrel of petrol in a beleaguered polluted planet has no future destiny other than a mass extinction event.
It was never my intention to be negative about this state of the market, there is a lot that can be done at a governmental level to ease market recovery and improve socio-economic recovery in our sector.
So, as we inch further towards that end game, this reminds me so much of that Cree prophecy (“When the last tree is cut down, the last fish eaten and the last stream poisoned, you will realize that you cannot eat money”)
Indeed, we may yet reach that final pound of rivets up for auction online and regret that we had not co-operated together such a long time ago.
Greed of survival has a sell by date …