IPC International Community magazine an association member publication
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IPC COMMUNITY 92 FALL 2024 2. Value chain resilience Supply chain disruptions like the COVID-19 pandemic underscore the importance of resil- ience. This is not unique to A&D companies. However, recent industry research indicates that an average revenue loss of about $160 million per company may have been realized through some industry leaders, with an average of $29 million being attributed to ESG disruptions 1 . This demonstrates an ESG impact that needs to be better understood and addressed. Proficiencies in responsiveness and reactiveness, ability to anticipate, agility, improved data collection, sup- plier onboarding and diversification, and contin- uous supply chain monitoring are a few of the areas where companies making progress in the environmental and the social side of resilience are focusing their time, money, and resources to develop sustainable processes, even in the absence of firm regulations. Mil/aero companies need to closely examine where others are having success to gain insights and leverage best prac- tices regarding ESG disruptions of the industry. Geopolitical tensions further exacerbate sup- ply chain challenges, including raw materials, products, logistics, and transportation for not only the countries involved but also the com- merce of countries connected to materials that touch those related supply chains. Mil/aero com- panies are forced to assess strategies, including ESG from lower tiers, as instabilities further disrupt global supply chains. This can move these companies away from some very common practices of single and sole sourcing to dual and multi-sources to address an expanded set of requirements that include ESG. The domino effect for substances that service both consumer/commer- cial and military applications become more prevalent in times of unrest as those making products look to secure supply for their own operations. 3. Resource efficiency and waste How any company utilizes its access to resources to produce products and services for commerce on the open market determines the type of footprint (environmental impacts that contribute to global warming) and handprint (actions needed to reduce climate change inclu- sive of efforts beyond their own value chain) it has with respect to ESG. Design for manufactur- ing (DFM), end-of-life (EOL), and extended pro- ducer responsibility (EPR) are terms that have generally been grouped together to address cir- cularity. This is also known as the circular econ- omy, "the system where products and materials are kept in circulation through processes like maintenance, reuse, refurbishment, remanu- facture, recycling, and composting. The circu- lar economy tackles climate change and other global challenges, like biodiversity loss, waste, and pollution, by decoupling economic activity from the consumption of finite resources." 2 The transformation of many product offerings in the mil/aero industry fall into the unrecover- able portion of the lifecycle for several reasons. For example, some products are destroyed when used as designed. Others may have extremely long lifecycles where their useful life is greater than 30+ years, or standard lifecycles that are comparable to commercial or consumer prod- ucts in the 0–30-year range.