Honeywell Aerospace Targets Supplier Bottlenecks to Boost Output

Honeywell Aerospace is facing supply chain challenges that have prevented the company from meeting customer demand. According to President and CEO James Currier, approximately 2% of the company's 3,000 suppliers have underperformed in the first half of the year.

The underperforming suppliers have limited the company's ability to match an 8% year-over-year increase in orders. Despite the challenges, Honeywell Aerospace is making progress in addressing the issues. The company is revamping its supply chain by improving planning with suppliers and giving them better visibility into future demand.

To increase component inflow, Honeywell Aerospace is tightening control over its supply base. The company has added sources for more than 50 constrained parts in the first half, with plans to add another 50 in the second half of 2026. This would increase multi-sourced components by 15%.

| Component | Number of Sources | Increase | | --- | --- | --- | | Constrained parts | 50 (added) + 50 (planned) | 15% |

The additional sources will also support capacity expansion for specific critical minerals, strengthening output growth in 2027. Honeywell Aerospace is also making significant capital expenditures on supplier tooling to raise capacity and yields and reduce rework.

The company is quadrupling its investment in insourcing and multisourcing. According to Currier, a single underperforming supplier can have a significant impact on the company's output and revenue. For example, one supplier was roughly $15 million or $16 million past due in deliveries, a small amount relative to Honeywell Aerospace's $18 billion in revenue.

However, one component from that supplier can unlock hundreds of millions of dollars in revenue, making the purchase cost disproportionate to its impact. The industry as a whole is supply constrained, and Honeywell Aerospace is working to increase output across the board.

Supply constraints have limited the company's year-over-year output growth to 3% in the first quarter and 4% in the second, both below expectations. The current forecast for the rest of the year is roughly 4% output growth.

Honeywell Aerospace executives discussed plans to scale and strengthen the company's supply chain and manufacturing operations to generate at least $6.5 billion in earnings and $4 billion in cash flow by 2030. The company is working urgently to address near-term bottlenecks and return to robust output growth as quickly as possible.

## Addressing Supply Chain Challenges

Honeywell Aerospace is facing supply chain challenges that have hindered its ability to meet customer demand. The company has identified a small number of underperforming suppliers and is implementing process improvements to increase production capacity.

## Increasing Component Inflow

To increase component inflow, Honeywell Aerospace is tightening control over its supply base. The company has added sources for more than 50 constrained parts in the first half, with plans to add another 50 in the second half of 2026.

## Investing in Insourcing and Multisourcing

Honeywell Aerospace is quadrupling its investment in insourcing and multisourcing. The company is making significant capital expenditures on supplier tooling to raise capacity and yields and reduce rework.