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From Curse to Blessing with the Right Sales Planning Software

From Curse to Blessing with the Right Sales Planning Software

Prof. Dr.-Ing. Götz-Andreas Kemmner, Abels & Kemmner GmbH

At first glance, sales forecasting looks easy for aerospace industry suppliers. After all, they have access to quite regularly updated and very longterm demand forecasts as well as to the so-called cadences of the major aircraft manufacturers, which provide information on the expected number of individual aircraft models to be built each month. On closer inspection, however, the seemingly uncomplicated forecasting circumstances turn out to be significantly more complex, uncertain and incomplete than one might think, as forecasting horizons and formats often vary from manufacturer to manufacturer, forecast quality fluctuates, or real orders and forecasting periods overlap. If the aim is to turn the patchwork of CSV files, Excel tables and PDFs into an organizationally and technically simple overall concept that provides consistent, automatic, and rolling 24-month demand forecasts where key parameters are calculated and controlled automatically, attempting to do this in Excel is not recommended. Rather, professional tools should be used as they can massively reduce the complex planning effort.

Pro-Active Turnaround in Aviation

Pro-Active Turnaround in Aviation

Sebastian Jäger, Dr. Stefan Ohl, Michael Dorn, AlixPartners

A&D industry players find themselves in a highly challenging and dynamic situation: To protect shareholder value, they need to keep outperforming the stock market and stay exceptionally profitable. At the same time, they are facing challenges to manage steep production ramp-up, the need to invest in digital and new business models, and rising M&A activities in a disruptive market environment with ever shortening business lifecycles. A&D business leaders find their companies at a tipping point of either doing business as usual and facing the risk of a downward spiral that could quickly get out of control, or to pro-actively turn around while they are still performing well and take them to a new level of sustainable and profitable growth. The Pro-Active Turnaround or PAT is a proven approach to massively increase shareholder and stakeholder value in the long-term. Its focus on disruptive change, a holistic program view, execution from Day 1, professional stakeholder management and a proven 4-phase methodology differentiate PAT from typical optimization programs. These are key enablers for lasting success.

Digital Decision Making - A Hybrid AI Approach

Digital Decision Making - A Hybrid AI Approach

Klaus Portmanns, Adrian Weiler, INFORM GmbH

Digital decision making based on hybrid AI technologies has become reality. Today, tried and tested artificial intelligence, operations research, fuzzy logic and machine learning technologies decision making capabilities for planning or operational control that used to be a strictly human capability. A hybrid approach combines the best of these technologies while interactively integrating the user’s expertise. The technical advances of recent years have made these technologies economically efficient. This enables a new strategy for the operational management of companies in the aerospace industry, called Agile Optimization. Intelligent algorithms recommend optimized actions based on planning or real time data. Application areas include forecasting and demand planning, inventory optimization, production and assembly scheduling, but also workshop scheduling, workforce management, and spare parts stock allocation and management, a crucial area for MRO processes. The aim is to make companies more profitable, but above all more resilient, so they become able to react quickly and intelligently to ad-hoc changes and unexpected events.

European Aerospace Supply Chain: Performance Today and Necessary Developments

European Aerospace Supply Chain: Performance Today and Necessary Developments

Michael Santo, Steffen Wenzel, h&z Management Consulting

The effect of globalization on the European aerospace industry is more pronounced now than ever as the role of emerging markets has increased. Overcapacities in the market and cost pressures were the consequences that have led to a transformation in the industry. Additionally, the production ramp-up in Airbus programs has impacted all actors in the supply chain. It is clear that digitalization is fast becoming an essential lever of transformation and performance improvement. Thus, the ability of the European aerospace suppliers to meet their customers’ expectations and develop the required skillsets to compete against international newcomers has become increasingly important. Based on our comprehensive and systematic analysis of the international competitiveness of aerospace suppliers in France and Germany (published on this year’s ILA), we defined a strengths and weaknesses profile of the supplier industry and a future competitiveness portfolio. In this article we will reflect upon recent developments since ILA and draw up a synthesis of the impact on the supply chain, as well as identify current challenges and actions to succeed in the future.

From Supply to Block – the New Chain Equation in A&D

From Supply to Block – the New Chain Equation in A&D

Hendrik Lojek, Dr. Hans-Jörg Kutschera, Richard Hauser, Chuck Marx, PwC Strategy&

Blockchain-based technology could revolutionize business practices, as we know them. This applies not only to the financial sector, but also to the A&D industry – and we are already there! Imagine being able to transfer value or prevent disputes over the Internet – without going through a third party. There would be a single source of truth, accessible for all relevant stakeholders, accurate and audible. This is the new standard for traceability.

The Near-Term Growth Opportunity in Targeting the Right Customers

The Near-Term Growth Opportunity in Targeting the Right Customers

Guy Benjamin, Harold Brink, Florent Kervazo, Hugues Lavandier, Ilan Rozenkopf, McKinsey

For aerospace manufacturers, capturing organic growth through new product development has proved a long and costly process with an uncertain outcome. By contrast, growth through aftermarket services is a short and straight path to a predictable outcome: dramatically improved financial performance. This article outlines how companies in aerospace and industry can improve their approach to aftermarket services by focusing resources on the most attractive leads, thus reaping the benefits of increased service volumes.

High Productivity and Tool Life as well as Reduction of Digital Resources

High Productivity and Tool Life as well as Reduction of Digital Resources

Dr. Nicolas Jochum, Blaser Swisslube AG

The optimum combination of minimum quantity lubrication (MQL) oil as well as specific MQL tooling leads to an increase in productivity and higher tool life. With an increase in the feed rate and the cutting speed of 130 m/min to 390 m/min in stainless steel 1.4307, the productivity increased by more than 70%. In addition, tool life was increased by 243%, with this higher material removal rate. In steel as well as in aluminum, a significant improvement in performance is possible with suitable and optimized MQL. In addition to other advantages of the MQL, e.g. low component residue and very clean metal chips; MQL technology also has advantages in the context of Industry 4.0. […]

Digital Transformation Excellence – Experience in Aerospace

Digital Transformation Excellence – Experience in Aerospace

Sebastian Jaeger, Dr. Stefan Ohl, Dr. Roman Friedrich, AlixPartners

Studies clearly show the benefit of digital transformation. Now, it is also time for Aerospace & Defense companies to get ready for take-off. In the large digital transformation programs that we have driven for and with our clients over the past years, we have identified key success factors and continuously refined our approach to make the change happen. Fast, powerful and with the best return on investment while minimizing risk. Our suggested approach consists of three main phases, as shown in figure 1. The first phase is targeted to create transparency and direction. We recommend conducting a fast, yet holistic assessment of the existing digital offering, operations and foundations. […]

Challenges of Sub-supplier Management – from a Cross Industry Perspective

Challenges of Sub-supplier Management – from a Cross Industry Perspective

Julia Burkhardt, Prof. Dr. Wolfgang Stölzle, Chair of Logistics Management, University St. Gallen

Expanding outsourcing activities and a shift of value creation along the supply chain led to an increase of complexity and a lack of transparency that can lead to a loss of control over the supply chain. For a long time, buyers have tried to gain control by managing their direct suppliers and hoping that they would communicate their requirements down the supply chain. However, a paradigm change regarding the responsibilities in the supply chain raised the awareness that a focus on the direct supplier is not sufficient anymore. Therefore, companies tried to start implementation of Sub-supplier Management approaches to increase efficiency and decrease risks in the supply chain that are associated to product quality, production costs or product availability. Currently, companies are working on overcoming barriers for an implementation of Sub-supplier Management processes.

Vertical Integration: a Growing Trend Reshaping the Aerospace Industry

Vertical Integration: a Growing Trend Reshaping the Aerospace Industry

Vincent Espie, Richard Hauser, Dr. Hans-Jörg Kutschera, Benoît Romac, PwC Strategy&

The aerospace industry is going through an unprecedented ramp-up. With this, many quality and delivery issues arise, leading to tensions between airframers and its suppliers. In addition, the operating profit of Airbus and Boeing is two to three times lower than the margins of their main Tier-1 suppliers, who earn up to 15%-20%. One major reason is due to the surprisingly small value-add captured by airframers in the complete aircraft production value chain. By outsourcing the most complex parts of their aircraft, Airbus and Boeing have also lost control of the highly lucrative aftermarket for servicing aircrafts. All in all, this is leading airframers to launch initiatives of vertical re-integration (e.g. wings, nacelles, pylons, several cabin monuments …) similar to what has been seen in the automotive industry over the last few years. […]

With Lean Thinking and Industry 4.0 to Operational Excellence

With Lean Thinking and Industry 4.0 to Operational Excellence

Prof. Dr. Alexander Tsipoulanidis, Berlin School of Economics and Law (HWR Berlin)

Companies across all industries implemented the principles of Lean Thinking in order to generate competitive advantage. Now, a plateau regarding the impact has been reached. Today, significant improvements can be made by using digital technology to achieve operational excellence. The available amount of data that is generated every day can be processed and analysed due to steadily increasing computational power. Additionally, the usage of technologies such as additive layer manufacturing, augmented reality or the cooperation of humans and robots has reached maturity. Mutually, Lean and Industry 4.0 solutions can help companies to reduce “wastes” according to Lean Thinking: e. g. unnecessary transportation, over-production, inventory levels, waiting times or also defects. [...]

Learning to Fly – how AM Will Become a Most Successful Business in Aviation Services

Learning to Fly – how AM Will Become a Most Successful Business in Aviation Services

Dr. Jörg Rissiek, Stephan Bloempott, Florian Vennemann, Airbus/Satair

Innovative Additive Manufacturing solutions contribute to solving global aerospace material services challenges with regard to increasingly strict requirements for lead time and quality for growing fleets of new and aging aircraft. When describing applications for Additive Manufacturing in aerospace the authors distinguish between the vast portfolio of flying parts, which require comprehensive certification, and the specific scope of tools and ground support equipment which entail looser certification requirements. Three main drivers are identified to leverage the overall potential of Additive Manufacturing in aerospace. Firstly, the certification and qualification of parts, materials and processes need to be streamlined and accelerated. […]

Enhancing rail operations through advanced connectivity

Enhancing rail operations through advanced connectivity

Dr. Elizabeth da Silva, Wesley Gilbert, Dr. Oliver Hirsch, TE Connectivity

The railway industry is striving for ever-greater levels of operational efficiencies, at the same time as it is competing with other modes of transportation. This article introduces two technology innovations that will reduce costs and improve operation of electric and diesel railways. A new-generation roofline system reduces aerodynamic drag and the overall height of electric rolling stock. It reduces operating costs as the smooth and low-profile modular system requires less traction energy (therefore lower energy bills). The second innovation is a condition monitoring system based on crankshaft torsional vibration collected from speed sensors giving information on key components inside the engine of diesel locomotives. The system identifies components that are nearing the end of their life, enabling the operator to carry out maintenance only when needed. This monitoring system has the potential to make significant savings for operators.

Digital Transformation – How to Drive Value Creation in the Digital Era

Digital Transformation – How to Drive Value Creation in the Digital Era

Dr. Dierk Buss, Andreas Rueter, Dr. Stefan Ohl, AlixPartners GmbH

Digitalization is transforming industries rapidly and new entrants are already taking over intelligent functions in the value chain. Incumbent companies often face barriers in the implementation. To support the digital transformation trend, it is essential to prepare the organization, to implement a distinct strategy, and to overcome critical barriers. We suggest a sequential approach to assess digital readiness and identify latent potential and then drive value chain optimization as well as new business models in dedicated project streams. An internally driven process to develop new business models has proven most effective to enable sustainable value creation. […]

The Internet of Things: How to Go Digital with the Right Approach

The Internet of Things: How to Go Digital with the Right Approach

Tanja Deisler, Johannes Klenke, Accenture GmbH

In Germany they call it Industry 4.0, in English-speaking countries they call it connected industry or the Internet of Things (IoT). In a world where everything is connected via Internet, the digital factory is not far. With an estimated growth of 6% in the next few years of the aviation industry [IATA, 2015], the way to remain competitive is to digitalize. The article highlights the main pillars of the digital factory. Taking a look at use cases where these technologies have been implemented will demonstrate their feasibility.The goal of this article is to show that things have to be seen from a different perspective to be able to move towards the digital factory. Digitalization requires agility and it needs to be disruptive. Instead of creating a large project management overhead, a company can find out which approach fits best to its ecosystem through small steps, pilot projects and trial and error before a project is rolled out on a large scale.

The Value Contribution of Purchasing in Industry 4.0

The Value Contribution of Purchasing in Industry 4.0

Dr. Karl J. Grajczyk, Infineon Technologies AG, Gunnar Zigan, Hochschule Landshut

The Industry 4.0 is defined as a collective term for technologies and concepts of value chain organization which combines cyber-physical systems, the Internet of Things and Internet-based digitization technologies. It can support productivity increases by connecting industrial value adding processes across several supply chain tiers. In ongoing discussions about Industry 4.0 supply chain management, it is often seen as one of the largest profiteers in industrial companies while its impact on purchasing has merely been considered by academic and practical research. Existing publications about the role of purchasing in Industry 4.0 have focused on providing broad overviews of the future role of purchasing, often lacking guidelines of practical initiatives to evolve the purchasing organization. […]

Managing Complex Aerospace Supply Chain Networks

Managing Complex Aerospace Supply Chain Networks

Cornelia Staib, SupplyOn AG, Bert Stegkemper, Stegkemper GmbH

The ongoing digitalization of all stages of the supply chain is one of the most important transformations that will help master future challenges in the aerospace industry, according to a new study of the aerospace supply chain whose key findings are summarized in the following article. While collaboration between OEMs and top-tier suppliers is already digitalized to a large extent, this mostly concerns handling conventional order processes. If other supplier-related processes are considered (handling complaints, action management and so on), the picture is completely different. Many companies want greater digitalization in these areas, both in relation to the customer and the supplier. And the closer to the start of the supply chain, the more often unstructured processes involving faxes, e-mails and Excel are encountered. […]

(Cost) Optimization in the Aerospace Supply Chain

(Cost) Optimization in the Aerospace Supply Chain

Robert Beckenlechner, Fraunhofer IPA, Georg Reissich, Mathias Schaller, Blaser Swisslube AG

In this article the potential of cooling lubricants (CL) for the machining of carbon- fiber reinforced plastics (CFRP) has been analyzed. The investigations were done during a collaborative research project of Blaser Swisslube AG and Fraunhofer IPA. On the one hand, a new CL was developed which follows overall considerations of the wet machining process. On the other hand, the usage of CL offers the chance to create a more efficient machining process. Therefore, the cutting principle was adjusted to the brittle fracture behavior of C- fibers combined with the CL. […]

The Digital Aerospace Supply Chain – a New Paradigm or Just a Fad?

The Digital Aerospace Supply Chain – a New Paradigm or Just a Fad?

Dr. Stephan Baur, Manfred Hader, Roland Berger GmbH, Prof. Dr. Stephan M. Wagner, ETH Zurich

A digital transformation of the aerospace supply chain has the potential to contribute to the mastery of the current challenges related to the production ramp-up, fluctuating production rates, as well as incremental innovation campaigns. It could result in an increasing efficiency along the complete value chain from the development activities over production to the aftermarket business and the operation of the aircraft. The advantages and disadvantages of this digital transformation are widely discussed, however, there is still only a limited number of examples or flagship projects where it has already been successfully implemented. Also, a concrete and shared vision is missing, with many questions awaiting clarification. This article aims to generate a repository of the topic and tries to answer the question, whether the digital aerospace supply chain is a new paradigm or just a fad.

Analysis of Mergers and Acquisitions in the Airline Industry

Analysis of Mergers and Acquisitions in the Airline Industry

Konstantin Biel, Denis Ellenrieder, Florian Kiesel, TU Darmstadt, Jörg Ries, City University of London

Over the past 15 years, the airline industry has been in constant transition. This can mainly be attributed to an ever-increasing competitive pressure, which has additionally been intensified by the continuing growth of low-cost carriers and the upcoming of the Gulf airlines. As a consequence, airlines which are not capable of streamlining their operations sufficiently often struggle with this competitive environment and may become targets for mergers and acquisitions. However, as has been shown for various transactions in the past, the expected synergies do not necessarily materialize over the course of the integration process. Therefore, this article aims at investigating the performance of mergers and acquisitions in the airline industry between 2001 and 2015 using the share prices reactions following merger and acquisition announcements as a proxy of the present value of future cash flows to shareholders. […]

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