Safran mobilizes suppliers
The year 2012 will go down as a commercial slam dunk for Safran, fueled by extensions to existing fleets and the development of the next generation of single-aisle jets. After chalking up some 10,000 orders*, including 4,300 for LEAP engines, Safran is now faced with an immense challenge to purchasing. In this situation, says Xavier Dessemond, Purchasing Vice President at Safran, "we're calling on our suppliers twice as much: first so we can ramp up mass production on some programs, and secondly so we can push on with our future aircraft programs like LEAP which require heavy investment in development and production engineering."
Give and take
New programs under development by aircraft manufacturers have a huge impact on Safran's aerospace business. The A320neo for instance uses not only LEAP engines, but also Safran landing systems, cabling, nacelles and more. This puts considerably high demand on Safran subcontractors for quality, competitiveness and operational performance. "We need to strike the right balance between our expectations and their capabilities. Our job is to ensure suppliers can meet our technical requirements while still developing their own business," stresses Xavier Dessemond. To achieve this, Safran has adopted a policy to strengthen its panel of suppliers, from large-scale industrials right down to SMEs which make up 35% of its total suppliers. "SMEs are more accommodating and responsive, but they're also more exposed. That's why we stick by 'best practices' in terms of transparent workload planning and on-time payment." As proof, Safran signed the 2010 "Pacte PME" (SME pact) and the charter of the CDAF (French association for managers and purchasers), and undertakes to apply best practices between clients and SMEs. And in January 2013 Safran went one step further by signing an agreement with the French Ministry of Defense to promote growth amongst subcontracting SMEs in the industry. Meanwhile, purchasing teams are being trained in how to apply these best practices during incentive events like the "Safran Buyers' Day".
Focusing on the big picture
Safran's policy of strengthening its panel of suppliers is part of a long-term approach. As Xavier Dessemond points out, "We work with pretty long cycles, so our suppliers need to be prepared to support us and meet our needs throughout the entire lifespan of our products. It's really in our best interest to get them committed to the whole program." To this end, Safran contributed €30 million to the Aerofund III investment fund, launched in early 2013, to support the growth of high-potential suppliers.
* Firm orders and commitments.