A digital coming of age
Gavin Sermon, Managing Director, Aerospace and Defence, Accenture, outlines why aerospace companies should take an integrated approach to implementing digital strategies.
Aerospace companies have been using digital technologies in some shape or form for many years — but the global economic crisis has affected those businesses just as much as everyone else.
Recently, financial problems have led to production delays, which have compounded both income and cost issues for airplane makers. The time has come to start applying contemporary digital offerings to business operations and supply chains, rather than just the machines they make.
According to the Accenture Digital in Aerospace Survey 2014, airplane manufacturers are still missing a coherent digital vision, and there is little consensus around what being a digital company actually means for the industry. While most commercial aerospace companies claim to have a digital strategy in place, some are using it mainly to drive internal processes and customer retention, while others are focusing on the supply chain or cost saving.
Instead, aerospace businesses need to embrace the 'all digital' business model. This means developing a comprehensive digital strategy across the organisation, tapping into multiple pools of talent through investment in R&D, training and strategic partnerships, and shifting from long-cycle production cultures to a more agile, digital mindset. This way, the industry will be able to fight the enormous problems it has been experiencing over the last few years.
Major airplane programs have been consistently late to market, costing companies billions and, in some cases, tens of billions of dollars in direct costs and lost sales. These delays have also led to deteriorating market values and diminished manufacturer credibility.
For North American and European companies, this is particularly worrying because — if nothing changes — the demand being seen by Asia-Pacific rivals will not only continue to grow, but will take the global lead. These changes are being fuelled by a digital coming of age, led by billions of investment into R&D and supported by tens of thousands of engineers. Aerospace companies also face fierce competition from within their own industry and from non–industry employers who are already using digital talent to get ahead in building better digital operations.
At present, many airplane manufacturers are low on the digital maturity curve. While many can see the obvious impact that digital can have on design and engineering, they need to take it a step further. Digital capabilities will help them develop new products and services, shorten design/development life-cycles, facilitate forecasting, asset and supply chain visibility, and reduce the delays that are so far weakening the industry's ability to fight competitors and retain revenue.