The Aerospace Technology Institute’s Balaji Srimoolanathan looks at the roadmap to transitioning to through-life engineering services in aerospace.
The global aerospace industry has been transformed significantly in the past 30 years by deregulation and liberalisation. As regulations on commercial aviation have been relaxed, airlines have varied their fares and services in response to competition and demand.
The convergence of legacy and low-cost carrier (LCC) models has increased maintenance outsourcing, point of sale maintenance contracts, and integrated service offerings, presenting a significant aftermarket opportunity.
ATI analysis suggests that new passenger aircraft worth $6.2 trillion will need to be delivered between 2016 and 2035. The associated through-life engineering support opportunities are estimated at over $2 trillion.
However, as the aftermarket grows in attractiveness, there is a shift in competitive behaviour as original equipment manufacturers (OEMs) increase their role in the aftermarket. At the same time, opportunities to transform aftermarket services are enabled by digital technology such as advanced sensing systems and big data analytics.
Increasingly, therefore, the winners in the aftermarket are likely to be those organisations that combine control of product design, operational data, maintenance scope, and the assets themselves, with sophisticated technology-enabled engineering service capabilities which reduce costs for their customers.
The developing transition from the legacy aftermarket to a future model has the potential to be very far-reaching, enabling OEMs and suppliers to re-position themselves from being pure manufacturers to providers of through-life engineering services (TES).
So, what is TES?
TES integrates manufacturing, engineering and technology with new service-based business models, and its application is necessary to guarantee continued performance of complex engineering systems. The roots of TES lie in traditional product/service models which have evolved to provide customer value throughout the product life-cycle in a more integrated and holistic manner.
Traditionally, support and maintenance consisted of providing spares, responding to repair call-outs (treated as contractually separate), providing statutory inspection of equipment (e.g. for insurance), and in some cases engineering upgrades of controlled products. Since the early 1990s, in response to demand from business-to-business customers, traditional manufacturing companies have shifted towards providing value-adding services like maintenance, spare parts and training.
Along with servitisation, Industry 4.0 is further changing the shape of manufacturing. Industry 4.0 is increasingly merging the real and virtual worlds, connecting products, people and equipment. Connected systems interact to analyse data, predict failure modes, reconfigure themselves, and continuously adapt to changes in customer demand.
Services can generate stable revenues, knowledge about both products and customers, and a competitive advantage that is difficult to imitate. In addition, due to the commoditisation of products and markets, differentiating strategies based on product innovation and cost-leadership are becoming increasingly difficult to maintain. The aerospace sector is moving towards providing total customer solutions, with companies attaching significant importance to the service and support activities associated with their products. This process is not straightforward, however; successful through-life service offerings require the seamless integration of high-quality, reliable products with a highly-developed service ethos.
TES features as one of the several major cross-cutting agendas in the Aerospace Technology Institute’s (ATI) technology strategy Raising Ambition. The capability presents significant opportunities for UK OEMs and tremendous value to their customers. Investments in digital and other technologies that enable transformation to Industry 4.0 in the UK aerospace sector also enable through-life engineering services, allowing greater product reliability and lower lifetime costs.
Making the transition
Understanding in-service performance of products is a critical precondition for organisations providing advanced services; it enables service providers to apply that knowledge to mitigate degradation, restore ‘as design’ functionality, maximise product availability, and thus reduce whole-life operating cost. Tools and standards underpin decision frameworks and are the backbone of technology platforms used to deliver through-life services.
The transition to advanced services also requires a shift in strategies, collaborations, capabilities, infrastructure, skills and business models. Through-life data architectures, decision optimisation tools, uncertainty models, and degradation/deterioration models were identified as near-term priorities for the UK, as were common data and interoperability standards.
There is much potential to be explored in the capability and the ATI is working with stakeholders and the wider sector to understand the gaps and needs.
Balaji will discuss this topic in more detail at the inaugural FINN Sessions at Farnborough Airshow next month.