Divide and conquer There’s a bright future in the aerospace and defence market, says Exception, the UK’s largest independent electronics contract manufacturer. Like every industrial market, the aerospace sector is going through big changes at the moment that have a direct impact on the way suppliers engage with customers. But it’s not all bad news for the region’s manufacturers, according to Craig Wright, chief executive of Exception Group, the Midlands-based contract electronics manufacturing business.
In the good old days of British manufacturing, life was relatively sweet for the raft of businesses that supplied the UK aerospace and defence markets with mechanical, electrical and other engineered products. From the smallest printed circuit board to a complete rocket guidance system, the market remained buoyant thanks to a seemingly endless conveyor belt of major projects that fed the UK engineering industry. How times have changed. No longer is the aerospace and defence sector characterised by a manageable flow of large projects – the last being the Boman communications system – but a series of smaller opportunities that are the subject of fierce international competition. As the focus has shifted from major projects to much smaller contract work, the nature of procurement has also shifted away from traditional engineering solutions, such as transport systems and armaments. Industry is seeing a move towards much more sophisticated technologies used on unmanned aircraft and C4ISR (or Command, Control, Communications, Computer, Intelligence, Surveillance and Reconnaissance) systems. Clearly, this seismic shift in the nature of the aerospace and defence sector has major implications for the likes of the region’s electronics industry that now needs to compete on a global basis against both European and North American competition. Coupled with this increasingly global competition is the reality that overall spend in the aerospace and defence sector has fragmented markedly in recent years, making it much more difficult for contractors and supplier to make healthy profit margins from projects. While this more challenging market is bad news for overseas competitors, it creates a great opportunity for UK based manufacturers to build a service led offering aimed at the home aerospace and defence market. Recent investment in Exception’s facilities have boosted its order books in the aerospace and defence sectors by taking a completely focused approach to the market and establishing dedicated business streams to support every aspect of our relationships with customers. Hence, we now have dedicated test facilities, manufacturing teams and designers that work exclusively on aerospace and defence projects. Increasingly, we are forging technology partnerships with our customers in the aerospace and defence markets, rather than traditional, commodity-type supplier/customer relationships that are often based on confrontation and lowest cost principles. The aerospace and defence market has been relatively slow to adopt new technologies historically. This is now changing at a time when many OEMs have reduced their in-house skills base. Exception is leading the way in supporting the integration of solutions to customers with lifecycle expertise and an appetite to service customers in the long-term. The marketplace is certainly changing as urgent operational requirements have been the vogue as is speed to market for new aerospace projects. In recognition of this Exception has dedicated resource for fast-turn production in the UK. In a world where most new contracts are increasingly demanding, it is up to those supporting the aerospace and defence sectors to re-engineer their business to capitalise on this change. While many larger suppliers will find it difficult to react to such structural change, there are many niche players in the Midlands marketplace that are ideally positioned to take advantage of this development. Ends For further information please contact St. John White or Dermot O’Flynn at Prova PR on 01926 776 900. |