Aerospace sector deal strengthens UK supply chain

The past year has been a momentous one for AE Aerospace with two factory moves and the continuation of our ambitious investment programme. SMEs like us can’t afford to stand still and if we’re going to exploit unprecedented demand for new aircraft, we need to step up to the plate. Therefore, in the autumn of 2018 I was delighted to see the Rt Hon Greg Clark MP, Secretary of State for Business, Energy and Industrial Strategy launch the Governments Aerospace Sector Deal. The multi-million-pound package seeks to support the development of Future Flight and includes a commitment to help SMEs such as AE Aerospace take our business to another level.

We’ve been waiting in anticipation for this sector deal to be announced. We are delighted that the Government has recognised the contribution our industry makes to UK PLC.

The sector provides over 120,000 highly skilled jobs and has an annual turnover of

￡35 billion. There is huge demand for Best of British engineering and manufacturing, and we need the right strategies and support to flourish in the world market. Our trade bodies, including ADS and Make UK have been in close dialogue with Westminster to develop a framework of support to help domestic businesses compete on the global stage.

The result is a sector deal with some impressive headlines. The package has been put together in support of the modern Industrial Strategy to make the UK more competitive.  It includes up to ￡125 million from the Industrial Strategy Challenge Fund to help the sector research and engineer new technologies relating to Future Flight. Greg Clark also announced that the Government would make a ￡15 million contribution to GKN Aerospace’s new Global Technology Centre in Bristol. The new centre is set to open in 2020 as a global hub for the next generation of fuel-efficient aircraft

These are welcomed announcements. Yet what I am most excited by is the support the new sector deal offers the aerospace supply chain. There will be an expansion of the National Aerospace Technology Exploitation Programme, providing joint funding to support R&D projects. Meanwhile, a new supply chain competitiveness programme could be a game-changer for businesses like ours.

The programme will build on the success of Supply Chain 21 (SC21), in boosting the competitiveness of SMEs. The Government is providing ￡10 million of match funding for selected businesses to put in place structured improvement activities. The programme will last up to three years, helping the business identify areas for improvement and receive support to make the necessary improvements. This could include anything from manufacturing processes to leadership and financial management.

For us, this new more intensive programme will provide a fantastic opportunity to up our game. Up to now we have found ourselves caught between the original entry-level SC21 and the Rolls Royce Sharing in Growth programme, designed for larger businesses with a minimum turnover of ￡15 million.

Now, through the new SC21 Competitiveness and Growth (SC21 C&G) programme, we have the chance to benefit from an in-depth externally validated audit which will identify the gaps in our operation and determine which of the programme’s 122 improvement modules would be most appropriate in increasing the competitiveness and productivity of the business.

That will prove hugely beneficial for ambitious SMEs like AE Aerospace which have outgrown the original SC21 programme and need support fine tuning their future growth strategy. We are currently increasing our turnover by 50% a year and in the coming two years hope to double it again. We are confident the work is there for the taking and through investment in people, processes and technology, we are determined to exploit the opportunities ahead of us.

There has never been a better time to work in aviation. The likes of Airbus and Boeing have full order books for the next decade and there is massive demand for new aircraft. There is a shortage of capacity in the aerospace supply chain and despite the B word, companies such as ours are in prime position to benefit.

The Sector Deal supports and validates our business strategy. Targeted guidance and training can only boost productivity and order books, creating a virtuous circle of ongoing investment. It will help inform how we develop the business and respond to rising global demand.

Now we’re settled into our new facility and poised to become a fully servitized manufacturer, we’ve never been in a heathier position. I welcome the commitment the Government has shown to supporting the growth of our sector and look forward to seeing what 2019 has in store.