MBDA has increased its stockpiles of ‘nuanced’ irons to 80 tonnes, almost 20 times its regular stock of the material, said CEO Éric Béranger on 13 March at the MBDA annual press conference, in response to high tension in the company’s supply chains.
The move to stockpe by MBDA is to offset against a future of extended lead times, and is an extension of activity begun during the coronavirus pandemic.
“Not only have we not stopped what we started during Covid, but we have accelerated and increased it,” said Béranger.
The production of missiles at MBDA involves the use of specific types of iron with special properties that are difficult to acquire. Béranger says are generally held at the company in quantities approaching 4 or 5 tonnes, and the decision to acquire 80 tonnes of the material represents the companies emphasis on stockpiling against future disruptions.
Béranger also said that MBDA have already stockpiled sufficient titanium for the production of ‘several thousand’ missiles, and are stockpiling electronic components based on their own analysis of where shortages may affect lead times.
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“On supply chain – ‘touching wood’ – we don’t have any shortage today. There is a high tension in the supply chain, and we can see lead times extending. And this is the reason why we are carefully analysing, domain by domain, supply by supply, the situation of suppliers. And when we sense a risk that certain components or certain raw materials may become longer to acquire, then we make stocks in order to have buffers. So this is what we are doing,” said Béranger.
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By GlobalDataMBDA had a strong year in 2023, outdoing what was thought to be an exceptional performance in 2022. Deliveries and new orders both went up by approximately 10% in 2023 compared with the previous year, taking on €9.9bn ($10.8bn) of orders, and delivering on €4.5bn of contracts. In total, 70% of new orders were for air defence systems.
Of exports outside of the MBDA nations of the France, Germany, Italy, Spain, and the UK, 76% of orders were to other European nations, reflecting the acceleration in defence spend that has been reported across the region.
Supply chain disruptions have been a major consideration for industry in recent years, with complications arising through the shut-down of activity during the coronavirus pandemic, the blocking of the Suez Canal, and the end of trading relationships with companies in Russia.
Stockpiling is an acute approach to overcoming supply chain disruption, with benefits companies against short term crises.
Longer term solutions that have become popular often centre on shortening supply chains, and either ‘near-shoring’ or ‘friend-shoring‘ supply to nations that are closer to the manufacturing country, or strategically aligned to it.
‘Re-shoring’ supply, by bringing outsourced activity back within national boundaries has also seen popularity in the wake of the covid pandemic disruptions.
