Supply Chain Matters has previously commented on the notions of how supplier capabilities in continuous product innovation can be both an asset, and perhaps a threat.  We have noted the notions of threats in the high tech and consumer electronics sector where contract manufacturers continually innovate and move deeper into the value-chain of products. China alone has declared aggressive goals for moving upstream in high tech supply chains including more global brands.  It is therefore a matter of time and/or opportunity as to whether vertically-integrated supply chain capabilities of certain contract manufacturers will motivate them to assume a brand presence.

A recent New York Times commentary featured on relates to Mitsubishi Aircraft Corporation, who for decades has assumed the role of supplier for various aerospace supply chains, and is now about to unveil a sleek new 90 passenger MRJ regional jet.  It represents Japan’s bid to assume an OEM brand after almost 70 years.

Mitsubischi MRJ jet

Source: Mitsubischi web site

The article’s author observes that the Mitsubishi comeback has something to do with being an increasingly outsourced supplier to Boeing, designing and supplying vital parts of aircraft components. A third of Boeing’s 787 Dreamliner is sourced among Japan based suppliers, which includes Mitsubishi Heavy Industries which is responsible for producing the 787’s carbon-fiber wing structures. According to the article, in addition to supplying 35 percent of the value-chain components within the 787, Japan based suppliers are responsible for 21 percent of the 777 and 15 percent of the 767 family of jets.

Interesting enough, the new regional jet features little of the advanced carbon-fiber composite materials of the Boeing or Airbus new models. Neither will it feature lithium-ion batteries for backup power needs. Mitsubishi has relied on ongoing financing from the Japanese government to become a higher profile supplier in aerospace, and is now pinning its hopes on a revival of a Japanese aircraft brand.

Mitsubishi boasts that its soon to be unveiled jet will deliver 20 percent in fuel savings compared to similar sized competitive offerings such as the Embraer 190. It will also compete with Bombardier, COMAC and other global OEM’s in the regional jet segment. The aircraft will leverage new engine fuel saving technologies from Pratt and Whitney along with a thinner wing structure. The company has booked 165 firm orders to date and has goals to land upwards of 5000 orders over the next twenty years, which the article opines as somewhat unrealistic.

Even more interesting is the observation that this supplier must continue to protect its presence and stature in Boeing’s increasingly more ramped-up aircraft output supply chains while becoming a brand to itself.  This will be a rather interesting business case to follow in the unfolding months since it could provide additional signposts on how suppliers transform themselves to both brand owners and key suppliers.

Bob Ferrari