“Given the recent projections from the supply chain on deliveries, we need to get our cadence in sync with the supply chain and take costs out of the business if we are to hope to see incremental margin growth.”

In context

“ain is improving in places, EB continues to be severely impacted by late deliveries from major component suppliers, which has delayed schedule and is continuing to impact cost. Our out-of-sequence work on modules weighing thousands of tons is time-consuming and therefore, expensive, sometimes up to eight times the cost of in-sequence work. The operating metrics tell us that we have, in fact, increased our productivity to somewhat offset cost. As I noted last quarter, throughput, a significant measure of productivity continues to improve. And while we will continue to work on improved productivity, there is no point hurting portions of the boat only to have to stop and wait increasingly extended periods of time for major components to arrive. It is not good for the bulk over time nor cost. Given the recent projections from the supply chain on deliveries, we need to get our cadence in sync with the supply chain and take costs out of the business if we are to hope to see incremental margin growth. Put another way, the supply chain is not getting better at a fast enough rate as we had hoped. Through our internal efficiency, we have now outpaced them. This is the reality of the post COVID environment for many of our most important suppliers. Finally, to be clear, current submarine delivery projections are not incrementally impacted since they already reflect the anticipated delays from the supply chain. We will, of course, carefully monitor supply chain performance and accelerate our work should their deliveries to us improve. And lastly, technologies. It was another strong quarter with revenue of almost $3.4 billion, which is up 2% over the prior year. Operating earnings in the quarter were $326 million, up 3.5% on a margin of 9.7%. That is a 20 basis point improvement year-over-yea”