Aerospace and Defense the Financial Impact of Covid-19 on the Rolls-Royce Supply Chain

Abstract

how companies in the entire A&D sector can adapt when challenges arise, not only during a pandemic, but also during other global crises. Abstract After the pandemic hit in 2020, the aerospace and defense industry was specifically impacted very harshly. Rolls-Royce was one of the main companies that had to go through major structural and logistical changes to cope with the changing economy. As one of the leaders of the aerospace and defense (A&D) industry, the main problem that Rolls-Royce was facing was the drastic reduction in demand for civil and commercial aircraft, which was one of Rolls-Royce’s core businesses. This led to supply chain problems, reduced profits, and eventually heavy losses. The effects of these problems caused great distress in the company. My specific role was twofold: to analyze their financial statements for the present and to provide risk management strategies for the future. For the former, I offer solutions on how they can minimize their losses and maximize their profits. Most of my research on this part was conducted by studying how companies performed under great financial distress in the past during black swan events, such as the housing crisis of 2008, the Great Recession, the dot-com bubble, and so forth. For the latter risk management objec-tive, I created a personalized risk matrix for Rolls-Royce by identifying and ranking all their current and potential risks. Then I prioritized the risks that required more atten-tion based on both qualitative and quantitative analyses of cost and performance impacts, and presented recommended solutions for these risks. Overall, I address six main issues and risks that Rolls-Royce should focus on and provide solutions to mitigate them.