Honeywell shakes up suppliers

Paris Air Show » 2007
June 16, 2007, 5:46 AM

Now that Honeywell Aerospace CEO Rob Gillette has finished realigning the company’s product divisions into a more customer-oriented structure, his most daunting challenges originate from the outside. As just about every top executive of a Tier One aerospace integrator knows all too well, managing supply base deficiencies has become a preoccupation. That “challenge” won’t disappear with any edict from on high, unfortunately, and will take a long-term effort centered on promoting self-sufficiency and shortening the length of the supply chain. 

“I think the real challenge is in the supply base for all of us, the whole industry, which is, you know, everyone who feeds us the component parts that make the whole,” Gillette told Aviation International News during a pre-Paris interview. “But I think all in all we’ve been able to meet customer demand and meet their expectations because we have a pretty good look on the whole industry and knew what was coming.”

Gillette has embarked on a multipart strategy for dealing with the problem, starting with, in his words, designing more “buildable” parts. “A lot of the things that we designed many years ago were on the edge of technology and they’re not all that manufacturable,” said Gillette. To remedy this, he said suppliers must be included in more of the design activity.

Another aspect involves reducing the number of suppliers, then cutting Honeywell’s own cycle times once the components finally do arrive from the suppliers. “We’ve reduced the number I think not as successfully as we’d like,” said Gillette. “But I think we’ve made a lot of inroads, and we’re looking at doing more in certain areas on our own, like our expansion in Chihuahua, Mexico.”

Opened this January, the Chihuahua facility produces supplies for engines and mechanical systems and is indicative of Honeywell’s embrace of globalization. The company continues to build its presence in places such as China, India and Eastern Europe, to take advantage of relatively cheap labor and to tap into an increasingly international base of technology know-how. Employees based in Puerto Rico, for example, do extensive work in information technology as well as customer/product support and legal functions. Meanwhile, Honeywell Aerospace’s 2,000 Indian employees engage mainly in software engineering and design activities.

Of course, the “softer” disciplines–most notably component integration–account for more and more of the Tier One suppliers’ responsibilities. In Honeywell’s case, a new systems simulation laboratory in Mexicali, Mexico, stands as a reminder of that fact. Used to advance the more electric aircraft concept, reducing parts numbers and weight to make the aircraft more efficient, the laboratory essentially simulates the workings of an entire airplane.

The integration lab focuses much of its energy now on the new narrowbody replacement airplanes under study at Boeing and Airbus. Also busy with new business jet, military and space projects, the facility stands adjacent to a Honeywell plant that manufactures a range of mechanical parts, from duct components to drive motors to elements of heat transfer systems.

Employing a generally stable roster of some 40,000 employees, Honeywell won’t outsource for outsourcing’s sake, however. In China, for example, there no doubt exist more prospects to expand manufacturing capacity, but Gillette won’t move until an appropriate opportunity presents itself.

“I think the main thing for us is to identify what we choose to make where and to make sure we have a strategy that we execute against,” said Gillette. “So a lot of it has to do with what you can buy from a raw materials standpoint and in what regions of the world and then what you can do in conversion or subsystem assemblies to get the advantage of where we’re having them built. In a lot of cases final assembly and incorporation, especially on things like engines and other types of machines, still need to be done where you’ve got the [certification] for all the work, but going forward we’d certainly consider moving more in different places and different ways.”

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