Aerospace and defense programs run on long lead times, deep multi-tier supplier networks, and build schedules with almost no slack. One late casting or one nonconforming lot can hold a line for weeks. When a supply plan fails in this environment, the failure is expensive, visible, and slow to recover from.
New research from LeanDNA and Wakefield Research points to where those failures start. The study surveyed 150 senior decision makers at global discrete manufacturers with $250 million or more in annual revenue across the United States, Canada, Mexico, the United Kingdom, France, and Germany. Aerospace and defense sits in that base alongside automotive, industrial, and medical device manufacturing. The pattern it uncovered will look familiar to anyone who has chased a shortage across three tiers of suppliers.
TL;DR
Manufacturers have gotten good at planning what to build. The research says they are losing revenue in the window between an approved plan and a factory that is actually ready to execute it.
- 75% say supply plan failures are most likely at the factory-specific execution stage, after the forecast is already set.
- 72% learn about a material shortage only once production delays are unavoidable, and 51% then take a week or longer to decide on corrective action.
- 93% have difficulty getting ERP visibility into factory execution outcomes, and 80% say forecasting alone cannot account for major execution disruptions.
- 47% report 10% or more of annual revenue lost or at risk, and 64% spend 10% or more of the manufacturing budget reacting to disruptions.
- 92% say leadership has confidence in AI to close the gap, and 80% consider AI essential for eliminating execution drag.
Supply plans are breaking at the factory floor
75% of senior manufacturing decision makers say supply plan failures are most likely to happen at the factory-specific execution stage. That stage is the window between the moment a plan is set and the moment production begins, when materials, supplier commitments, and production priorities all have to line up.
Most organizations have spent the past two years investing elsewhere. 74% say improving forecasting has been a priority or a top priority, while 80% agree that forecasting alone cannot account for the disruptions that define factory operations. 73% say their ERP gives them visibility into what materials are required while doing nothing to prevent execution failures, and 93% report at least some difficulty getting ERP visibility into manufacturing execution outcomes.
Problems surface after the window to act has closed
83% of respondents deal with multiple production disruptions caused by supplier changes every quarter, and for 56% that is a monthly occurrence. 72% discovered a material shortage only after production delays were already unavoidable.
Detection is only half the problem. 51% take a week or longer to decide which corrective action to take once a production risk is identified, in environments where production schedules are measured in hours. For an aerospace program with sequenced builds and qualified suppliers, a week of deliberation is a week of slipped delivery.
The readiness gap has a measurable price
47% of manufacturers report that 10% or more of annual company revenue is lost or at risk because of misalignment between demand planning and factory-level execution. 64% spend 10% or more of their manufacturing budget reacting to disruptions through premium freight, emergency sourcing, and last-minute production changes.
The inventory picture runs in both directions at once. 84% experienced multiple inventory shortages over the past 12 months, and 81% carried excess inventory in the same period. Both conditions trace back to the same root cause, and both tie up working capital that aerospace manufacturers need for program ramp, which is why inventory optimization keeps landing back on the executive agenda.
The cost reaches people as well. 74% say being permanently stuck in reactive mode has eroded trust between planning and operations teams, and 82% are concerned that continued execution failures could cost them their job.
What closing the gap takes
Four shifts come out of the research.
- Treat supply readiness as a continuous discipline.A supply plan defines what should happen. Readiness determines whether the factory can deliver it, and readiness changes daily as suppliers confirm, slip, and substitute.
- Connect demand signals to factory-level action.Buyers, planners, and suppliers need prioritized actions that reflect what the factory needs today rather than what was scheduled last week.
- Fund supply planning the way the industry funded demand planning.37% say their organization has invested more in forecasting than in improving factory-specific execution.
- Make decision speed a competitive advantage.Shortening the distance between a supply risk signal and a corrective action is one of the highest-leverage investments a manufacturing organization can make.
Where AI fits
92% of decision makers say leadership has at least some confidence in AI to close the planning-to-execution gap, and 80% consider AI essential for eliminating execution drag. That confidence is practical rather than aspirational. Managing material availability, supplier alignment, and production priorities across every site and every buyer workflow, at the speed conditions actually change, is beyond what manual processes and static reports can handle.
This is what modern supply chain planning software is being asked to deliver: continuous visibility into supply readiness, prioritization that reflects real constraints, and a clear next action for the person who owns it. AI supply chain planning software makes that workable at the scale aerospace programs operate in.
The Full Research
The Factory Execution Gap: What Aerospace Leaders Are Missing covers all 24 pages of findings, including the full breakdown of disruption frequency, response time, and business impact.
