Troubleshooting the supply chain

For Keluskar, a manager of supplier performance at Collins Aerospace, a Raytheon Technologies business, green means good. It means one of the 30 or so suppliers he oversees on Long Island, New York, is delivering on time. It means the parts they ship are arriving in good shape. And it means there are more in stock, just in case there’s a sudden uptick in demand.

He also scans for yellow, which means things are fine – just not quite as ideal. As for red – well, it’s best to let him explain that.

“If we’re in the red zone,” Keluskar said, “that’s when we drop everything and intervene immediately.”

Keluskar is among hundreds of logistics experts and problem-solvers across the company who monitor the performance of suppliers and, when necessary, help them unsnarl their operations through continuous communication and site visits. In some cases, they even embed at suppliers’ facilities for days or weeks at a time.

That team’s work has taken on particular prominence as Raytheon Technologies and other companies in aerospace and defense deal with supply chain disruption and strive to fulfill their commitments to military and commercial aviation customers. It also reflects a key element of Raytheon Technologies’ supply chain strategy – to treat underperforming suppliers as partners and help them improve, rather than simply cutting ties and looking elsewhere.

“It always seems like it’s easy – you have a problematic supplier, you just exit them. In reality, exiting a supplier can be more expensive,” Keluskar said. “It can be extremely challenging, and it can lead to a stop in terms of production. We’ve found that investing in our supply base, diagnosing the problem and helping them fix it – that’s what really pays dividends.”

Case study: Precipart

These days, the precision gear manufacturer Precipart of Farmingdale, New York, is on the good side of Keluskar’s spreadsheet. But there was a time, not so long ago, that it wasn’t.

It started in 2019, a year of significant growth in commercial aerospace. With that growth came a surge in demand for Precipart’s gears, which are used in many parts of passenger planes including the nose wheel, turbines and landing lights.

Keluskar’s data analytics system wasn’t yet up and running, but his phone was – and it rang repeatedly. Program managers were calling to say their gears were coming in late. And then came the call from Precipart itself.

“They reached out and said, ‘We’re running into trouble here,’” Keluskar said.

The key problem: Precipart, like many manufacturers, had used market forecasts to plan its operations – which machines would be running at which times, which processes they would be performing, how much staff to schedule. But the surge in demand made those forecasts obsolete.

“That caused misappropriation of personnel, misappropriation of priorities, and of capacity itself,” said Andrew Pandis, Precipart’s vice president for business development. “Priorities on the machines were skewed. You were running part A, and all of a sudden you needed part B. So both parts became late all of a sudden.”

Untangling that problem began by working with Keluskar and his Raytheon Technologies colleagues to determine which orders were most critical. That, in turn, allowed them to allocate resources more efficiently – for example, using machines to perform certain processes in parallel, rather than in a linear sequence.

“Basically, inventory would stop in their plant, wait for the previous process to finish, and then they would be able to start,” Keluskar said. “By doing capacity analysis, we developed pretty creative solutions where we were able to put products on different machines and cut down on that lead time.”

Of course, that’s all easier said than done. Smoothing out the operations took time and lots of communication. In addition to the work of a contractor who had already been on site with Precipart daily, Keluskar and his team spent about three weeks at the facility, working out of a converted conference room, making frequent visits to the shop floor and “just asking a lot of questions,” he said.

It also took cooperation from Precipart itself, and Pandis said the company was happy to oblige.

“This was a well-rounded effort,” he said. “The supplier development team did not see us as Precipart, a supplier. They saw it as, ‘let’s help our own cause by understanding the issue and helping them through it.’”

Benefits across the company

Many of Raytheon Technologies’ 14,000 suppliers provide parts to more than one of the company’s businesses. And it’s those cases where on-site support is paying off particularly well, said Sarfraz Nawaz, the company's vice president of supply chain.

“We try to leverage the contacts and the relationships across the organization. When we have common suppliers, someone from Collins who’s there every day can also look into a challenge they’re having at Pratt & Whitney or Raytheon Missiles & Defense, or vice versa.”

One example: An electronics supplier in Asia had fallen behind on its deliveries to Raytheon Missiles & Defense and wasn’t responding to inquiries. Collins Aerospace, which has a significant local presence – including the exact city where the factory was located – dispatched a team quickly.

“They were able to pop in there and create the relationships with the local leadership,” Nawaz said.

Cooperation among the company’s businesses has become especially important as it works to improve its “N-tier visibility,” a term for knowing not just what’s happening at direct suppliers, but at the businesses farther down the line that provide the parts and materials those direct suppliers use.

Nawaz pointed to a recent example that helped alleviate a shortage of microprocessors. The supplier was short on wafers, a key component of microprocessors, so Raytheon Technologies arranged for a wafer manufacturer to provide those parts and earmark them specifically for Raytheon Technologies’ order.

Ongoing support

Not long after Keluskar’s team and Precipart sorted out the problems brought on by the 2019 spike in demand for aircraft parts, the COVID-19 pandemic added even more complications. While business from commercial aerospace dropped, demand for gears for military systems remained steady – and Precipart’s medical orders surged, with gears needed for equipment such as ventilators.

Helping Precipart meet its obligations in the face of those fluctuations demonstrated the value of having Keluskar as a local point of contact. That made it much easier to keep communication going – and to keep Precipart’s production lines moving on high-priority items – as the gear company weathered yet another unexpected disruption.

In the long term, local support is also helping suppliers stay in the yellow and green on Keluskar’s spreadsheet.

“I’m a Long Islander. I’ve lived here my whole life. These are my neighbors, some of them. Their kids go to the same school district as mine,” Keluskar said. “We have our people spread throughout. It’s given us the flexibility to be where we need to be, faster, and to address issues immediately.”