Aerospace Contract Manufacturers and Risk Management

Intrex is an aerospace contract manufacturer. Our purpose and focus are to provide precision machined parts for the aerospace/space/defense markets. Being a long-time provider of precision CNC components in these markets requires knowledge, capability, and experience, while working under some of the most stringent regulatory, safety, and performance standards in the manufacturing world.

One of the essential competencies required for operating in this aerospace ecosphere is managing risk. For a successful aerospace contract manufacturer, risk management is not merely a business consideration—it’s a necessity. Our risk management initiatives span multiple domains. We have identified below those areas where we have concentrated our efforts. Because of the scope and span of this endeavor we would like to communicate through a series of several articles (this being the first) our knowledge and practices, in this very important area of aerospace manufacturing management.

Identified Areas of Risk Management Risk 

• Compliance risk – AS9100, ITAR
• Supply chain risk – Geopolitical disruptions, material shortages, tariffs
• Financial risk – Long development cycles, fixed contract pricing, cash flow
• Cybersecurity risk – More digital operations threaten intellectual property, systems integrity

As outsourcing continues to be a vital piece of aerospace production, contract manufacturers (CMs) must implement robust risk management strategies that ensure compliance, optimize operating efficiencies, while also meeting customer expectations.

AS 9100

Much of our risk mitigation efforts begins with our AS 9100 accreditation. AS 9100 is the international Quality Management System standard for the Aviation, Space and Defense (AS&D) industry, created by the IAQG. The overarching goal of AS9100 is improved quality, cost, and delivery performance.  The benefit of implementing a quality management system (QMS) based on AS9100 is “addressing risks and opportunities associated with its context and objectives.”

The AS9100:2016 has two clauses dedicated to Risk Management.

• Operational risk management
• Actions to address risks and opportunities

The basic requirement for each of these is to identify potential risks, assess the risks, and take action to mitigate or eliminate the risk. AS9100, Rev D, invites individuals and organizations to define their business and QMS processes by using both systems thinking and risk-based thinking. The goal of doing that is to ensure predictable outcomes, timely delivery of products and services that meet customer specifications, and—ultimately—profitability.

AS9100 directs an organization in risk-based thinking. This enables an organization to identify factors that could cause its processes and quality management system to deviate from the planned results. It also directs implementation of preventive controls to minimize negative effects of risks and to capitalize on opportunities as they arise.

Risk-based thinking, therefore, means thinking ahead for any internal or external situations that may prevent the organization from achieving its goals and objectives, including its financial targets. It involves evaluating risk both qualitatively (evaluating the likelihood and impact of risks on an organization at a general level) and quantitatively (leveraging numerical data to assess the acceptability of a risk event outcome).

Meeting requirements

 At Intrex we manage our operational risks through our launch/relaunch process. Risks are identified, assessed, and mitigated during this process. The route and processes are then updated accordingly. Our production process definition also has risks associated with it and mitigations for each risk identified.

We address risks relevant to the organization and its interested parties via our COTO (Context of the Organization) log. It is a document we use to record and analyze the various internal and external factors that can impact an organization’s strategic objectives and our quality management system (QMS). Essentially, it’s a way to understand the environment in which the organization operates to better manage risks and opportunity.

We use the COTO log to list interested parties, issues for interested parties, risk register, and opportunity register. Our process definitions identify risks associated with each of our core processes (production, purchasing, planning, management, and support) and the mitigation for each risk identified. Risk management and risk mitigation is not only a big subject, but also vital to our future. We have made considerable investments in time and monies to meet and exceed AS9100 requirements.

Conclusion

As a contract aerospace manufacturer, we face a unique set of risks. By applying systematic risk management practices, we can turn these challenges into opportunities for differentiation and growth. Our integrated quality system fosters supply chain resilience, embraces digital technologies, and maintains strong communication with our stakeholders.

Thank you for reading this article and stay tuned for  related articles on Risk Management. If you would like more information on Intrex Aerospace, please click here.