Aerospace Manufacturer Achieves 55% Cost Savings and 30% Inventory Reduction in Three Years

Situation

A leading aerospace manufacturer specializing in metalworking, aircraft engines, hydraulics, and pneumatics faced serious operational inefficiencies. The company had no formal supply chain organization—every team leader managed purchasing independently using PCards. This led to excessive inventory, lack of visibility, overpayment for supplies, poor tracking, and costly downtime when critical materials weren’t available.

Actions

A MetaExpert was brought in to build a world-class supply chain function from the ground up. Over four years, the following initiatives were implemented:

  • Established a centralized supply chain organization with clear accountability.
  • Implemented SAP for procurement, inventory management, and material requirements planning (MRP).
  • Consolidated suppliers, negotiated contracts, and reduced uncontrolled spending.
  • Introduced point-of-use inventory systems for greater efficiency.
  • Partnered with unions to redesign shipping and receiving processes.
  • Created standardized scorecards and supplier collaboration systems to drive ongoing improvement.

Results

  • 35% cost savings in year one (~$1M+), growing to 55% savings by year three.
  • Inventory reduced by ~30% with accuracy reaching 96%.
  • Downtime due to material shortages cut to just 2–3 incidents per year.
  • Labor reallocated from chasing supplies to higher-value production work.
  • Contractual targets (25% savings required) were exceeded in the first year.

Return on Investment

The transformation delivered cumulative multi-million-dollar savings, improved efficiency, and reduced risk. The organization achieved:

  • 55% reduction in supply chain costs (vs. 25% required).
  • $1M+ annualized savings in year one, doubling by year three.
  • Increased productivity and operational reliability, creating a strong competitive advantage.
From chaos to control: 55% savings and 96% inventory accuracy in aerospace supply chain.

Conclusion

By building a disciplined supply chain operation and embedding Lean Six Sigma practices, the aerospace company transitioned from a fragmented, high-cost system to a streamlined and resilient operation. The results demonstrate the value of supplier partnerships, accurate data, and strong change management in driving measurable financial and operational impact.

Project Details

  • Industry: Aerospace (secondary: Metalworking, Aircraft Engines, Hydraulics, Pneumatics)
  • Duration: 4 years, full-time commitment
  • Skills Applied: Supplier management, procurement, inventory management, forecasting, logistics, negotiations, Lean Six Sigma, change management
  • Challenges Overcome: Lack of centralized supply chain, excessive inventory, downtime, overpayment