Imperatives

Increased Agility
To succeed in the ultra-competitive aerospace industry, companies must be agile, fast, and innovative in order to adapt to rapidly changing environments.

There is a challenge to balance the three components of energy, economics, and the environment. Research revolves around increasing the rate of dilution, using new materials, and optimizing of architecture and components. The strategy relies on a progressive introduction of new materials and new manufacturing techniques, introducing from the very beginning the importance of a total cost of ownership.

Thus, the industry’s main actors—even those who have been in the industry for years—are reviewing their strategy and restructuring operations to adapt to new market drivers. These include the political (manufacture of aircraft in China), the economic (variations of fuel costs; euro-dollar parity), the environmental (regulations such as REACH), and the social.

From the Extended Supply Chain to a Worldwide Supply Network
Extended Supply Chain Solutions are being employed across continents as businesses seek efficiencies through new partners and suppliers to service customers around the globe and expand their capability, rather than looking for economies of scale and vertical integration.

With the value chain turning into ‘global value chains’, value creation is moving forward and inducing modifications in the value creation ratio among global players. There must be a strong focus on managing transversal, worldwide supply chains, embedding cross-functional capabilities to unify and rationalize links in a dispersed organization.

Tier 1 suppliers are reinforced with a broader scope and extended responsibilities to manage Tier 2 and 3 suppliers. Development cost and risk-sharing become the rule between partners, with a higher added value created by suppliers, as a result.

However, the transformation of the supply chain needs to be carefully controlled to avoid disruptions and maintain confidence. Mitigating the impact of disruption has to be a key focus for companies with an extended supply chain.

Combining Technological Brea kthroughs and Industrial Process Improvements
Increased exposure to international competition is driving demand for improved productivity and accelerated and innovative breakthroughs in technologies and in industrial processes. Globalization is forcing continued restructuring in mature markets and investment in developing markets to maintain growth and profits. This requires new business models, organizational structures, and information systems to be continually developed and optimized.

Technological breakthroughs are a prerequisite to the development of competitiveness. For example, in Europe, military systems have succeeded thanks to their technology and their technical advance compared to competitors.

However, this will require large investments in a period of economical difficulties. As companies look to maximize their R&D investment, new operating models such as alliances are appearing, as well as potential redesigns of business processes.

The emergence of China, India, Brazil, Russia, and others as competitive business threats to US or European manufacturers and operators has to be factored in, but this does not mean that the US and Europe will stop being the principal innovators and developers of the next stage of leading-edge technology.

Development of ‘Collaborative Enterprise ’ Through PLM Platforms
Aerospace companies face new global manufacturing challenges as they extend their network of partners and suppliers around the globe. They develop more sophisticated products that rely on deeper integration between the mechanical, electrical, and software components for product development.

There is a need for increased concurrency between design, development, industrialization, and manufacturing to get to shorter time to market (to be halved by 2020).

Collaborative methods and tools allow the use of the best competencies, wherever they are, for the duration of collaboration. Likewise, the use of data standards permits companies with heterogeneous systems to work together while keeping their own methods, processes, and tools.

PLM Platforms enable integration between product design systems, simulation technologies, end-to-end referentials, digital manufacturing systems, and collaborative solutions. The PLM Platform then becomes the key enabler for excellence, harmonization, efficiency, and cost reduction. The Platform also acts as a stage for predicting product behavior, detecting design errors, reducing the need for expensive in-flight tests, streamlining flow with contextual access to shared and common data, and determining the correct interpretation of product definition.

Workforce & Human Capital Management
Workforce & Human Capital Management (W&HCM) is becoming more and more important to organizational success, especially for the Aerospace industry. One of the top drivers for W&HCM is the retention of existing workers to avoid losing business-critical knowledge and skills. Critical skills management is now vital to remaining competitive and being ready to face the economic crisis and emerge strongly on the other side.

Business trends

Environmental Regulations
Regulatory requirements are increasing and the Aerospace industry is being closely scrutinized for safety and environmental issues.

Climate change will generate a need for the Aerospace organizations to contribute to reduced carbon emissions and further environmental policy changes, all the more difficult if air travel is growing. The European Union is planning a €1.5 billion Clean Sky initiative to improve Europe’s position in aviation development while cutting jet carbon emissions by 20–40% and reducing jet noise by half. This initiative, as well as the ETS and European SESAR initiatives, may have a major influence on the industry. Research on alternative fuels is also now being conducted within the Aerospace industry.

Total Service Support Pac kages and MROs
Services are becoming a major axis of development as they provide recurrent sales. For all OEMs, service is the key differentiator from competitors and a way to move upstream in the customer value chain. Global service offers are the key, with local proximity and modular contracts based on outcomes.

The need for MRO is increasing with the extension and usage of fleets, resulting in a number of service changes, such as externalization. Engines have a large share of this activity, with 35% of the total volume.

Regionalization
The drive for customer intimacy and proximity in an increasingly global market, together with the need for cost reductions and hedging for foreign exchange rate fluctuations, will mean that European companies moving to the US and so to the dollar zone will most probably increase in the next five years in parallel with an increase in activity in these countries.

Outsourcing is increasing in depth. Having started with simple contract manufacturing, entire operations (including logistics and, in some cases, R&D) are now moving toward China and increasingly India, where there is an abundance of (still cheap) talent.

Impact technologies

All major Aerospace companies have launched Supplier Portals and e-Supply Chain Exchanges. The objective is to improve competitiveness through e-supply chain best practices and digital exchanges.

More generally, access to information across many different types of interfaces can be provided through Enterprise Portals. These would also ensure that the right information is made available to the right people in a way that is consistent and with good usability.

The use of new technology is not so much a driving force as the need to develop ever more efficient manufacturing processes, specifically to address the lead-time issues. The adoption of Lean Management techniques and systems to manage product and process quality, as well as the provision of visibility across the supply chain, will all contribute to this.

Close integration with Tier 1 suppliers is also an imperative, along with the integration of the supplier hierarchies themselves. Being able to locate the whereabouts of specific products through Positioning Systems will also contribute to supply-chain efficiency.

The ability to track and trace products all the way through the supply chain is needed for internal process and cost control to satisfy regulatory requirements on the security of the supply chain and to enhance transparency.

The requirements for improved supply-chain security, continuity, and traceability will be met with accelerated development of RFID.

Collaborative work encompassing the global supply chain will be enabled by the improved deployment of Identity and Access Management (IAM), which becomes a prerequisite for easy and secure access.

Real-time decision-making based on real-time information and predictive business models with intelligence is now vital to react to changes in political, economical, environmental, and social contexts.

A shared view of information, in contextual mode adapted to the user through systems allowing Enterprise Information Integration, will give the business the intelligence that is required. Business Intelligence in the form of predictive analytics and dashboards is of great value here.

An agile business model will require real-time access to content information from any location through Enterprise Content Management (ECM). ECM will be key to ensuring content information is stored securely, maintained consistently, and retrievable in different ways / views to meet the heterogeneous demands of more and more global organizations. The long-term archiving requirements of the industry create a challenge for the conservation of digital information in general and 3D design models in particular.

Knowledge Management (KM), knowledge-based engineering, and knowledge-based strategy with search engines, are all important components of the collaborative approach.

Manufacturing companies are starting to establish common standards for Manufacturing Execution Systems and PLM Platforms to enable easy exchange of data to speed up product development across functional, geographical, and organizational boundaries—as a path to ‘virtual enterprise’—and help reduce the cost of manufacture. Furthermore, these systems are increasingly being integrated into ERP systems so that manufacturing and cost data is more transparent across the company.

Web 2.0 technologies can enhance knowledge transfer and collaboration within the extended enterprise, and provide new inputs to configuration management and change. The need for better efficiencies and collaboration across the supply chain will also benefit from some of the latest Web 2.0 technologies, a powerful enabler for knowledge retention and collaboration as supply chains become more virtual.

The capture and use of Voice of Customer (VOC) information will facilitate changes early in the development process.

Difficulties encountered by aircraft manufacturers have highlighted the key importance of program management and integrated referentials for datasharing from design to manufacturing and back.

Outsourcing at all three levels—infrastructure, applications, and business process—can drive down costs and resolve any lack of in-house expertise. Organizations need to evaluate where outsourcing offers the most benefit and how that benefit could be more effectively realized, including the option of offshoring.