Aircraft Parts and Auxiliary Equipment, Not Elsewhere Classified - Organization and Structure

Organization and Structure

Aircraft manufacturers rely on a broad base of suppliers to provide the thousands of subsystems and parts that make up their products. There are more than 4,000 suppliers contributing parts to the aerospace industry, including rubber companies, refrigerator makers, appliance manufacturers, and general electronics enterprises. This diversity is necessary because in most cases it is simply uneconomical for an aircraft manufacturer to establish, for example, its own landing light operation. The internal demand for such a specialized product is insufficient to justify the creation of an independent manufacturing division.

Aircraft manufacturers have found it cheaper and more efficient to purchase secondary products from other manufacturers, who may sell similar products to other aircraft companies, as well as automotive manufacturers, railroad signal makers, locomotive and ship builders, and a variety of other customers. For example, an airplane builder such as Boeing, Grumman, or Beech is likely to purchase landing lights from a light bulb maker such as General Electric. Such subcontractors supply a surprisingly large portion of the entire aircraft. On the typical commercial aircraft, a lead manufacturer such as McDonnell Douglas may actually manufacture less than half of the aircraft, though it is responsible for the design and assembly of the final product.

When a major manufacturer discontinues an aircraft design, as Lockheed did with its L-1011 Tristar, a ripple effect is caused that affects every manufacturer that supplied parts for that aircraft. Therefore, parts suppliers strive to diversify their customer base to ensure that the decline of one manufacturer will be tempered by continued sales to others. Given the unstable nature of the industry, parts manufacturers also attempt to find customers outside of the aircraft business.