Recapturing value in aerospace: Know your suppliers’ costs and collaborate to lower them

For the last 15 years, aerospace OEMs — including airframers and subsystem manufacturers — have been losing power to their suppliers. The time is right to reverse this trend, using three strategic options to recapture value: (1) threatening to switch to other suppliers; (2) collaborating with suppliers to jointly reduce costs; and (3) longer-term approaches such as “designing out” the components in question.