Lean supply chain management techniques for complex aerospace systems: Using discrete event simulation to mitigate programmatic cost and schedule risk

Historically, major US aerospace programs have suffered from cost increases and schedule delays. While inaccurate basis of estimates can lead to discrepancies between planned and actual program performance, a well-planned, lean supply chain can still experience cost and schedule pressures. It is clear that all design changes lead to schedule delays and associated cost increases, and it is also clear that complex system development programs in the aerospace industry inevitably experience design changes. In this research a discrete event simulator was created for modeling aircraft production supply chains where the major variables of interest were the depth of supply chain, the rate of design change impacting the supply chain, and the allocation of design authority to each level of the supply chain. The simulations identified that mitigating schedule delays can be achieved by allocating design authority in the supply chain to speed up change incorporation, and result in first unit lead time being reduced by up to 50%, while increasing overall production system productivity. Additionally, staffing design change boards for concurrent change incorporation can also lead to significant productivity improvements. The optimal solution points to a dynamic plan for the change traffic that achieves the most efficient production schedule amongst suppliers. Further, an acquisition program trap is also shown to exist in government acquisition programs that can be avoided by understanding the impacts of the design change traffic identified with this simulation.