Digital transformation in the aerospace industry… Really??

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A brief post to offer some musings to my comrades in the Aerospace industry. Hopefully you’ll find this helpful, and if not immediately helpful, then at least it will offer some food for thought…

marketing 101

One of my first subjects on the LBS Sloan programme has been ‘Leading the Market Driven Organisation’. I won’t shy away from the fact that I didn’t get much exposure to the principles of marketing while in the aerospace industry; most clients are either government or large multi-national organisations. You don’t often find people wanting to buy an aeroplane, or an aeroplane  component, because they have just seen an advert on SkySports, or because someone dropped a leaflet through their letterbox.

Considering the above, you can forgive my initial response to the recommendation to “transform my industry through digitisation”, as stated in my course text book. I’m sure many of you currently in the industry would agree; this sort of thing doesn’t apply to aerospace… Or does it…

P180

…It was only a little later in the day when I started to think about pain points and problem areas when I had a Eureka! moment. For my last client, on my last project, by far the biggest pain point was managing suppliers and late delivery of purchase orders. Unfortunately there are suppliers out there who seem very intent on winning orders and making promises, but not so good at delivering parts. One particular supplier we used had promised some components within 10 weeks, but we were still pulling our hair out due to non-delivery way beyond this time.

In the business to consumer world there are simple tools available to prevent poor supplier performance. For individual consumers, consider the ratings systems put in place by organisations such as Amazon and Ebay. For suppliers offering loans and mortgages, consider credit rating platforms such as Experian and Noddle.

This is when the penny dropped. Why isn’t there a business to business rating system? Even better, a transparent tracking system that links to each business’ MRP system and shows what orders are overdue. If banks and financial institutions can do it with individuals’ bill payments for credit ratings, then it must be possible for other industries. This application would have a profound affect; as businesses that were unable to fulfill their orders as promised would not likely win future work. This would reward productive and well run organisations and encourage other businesses to follow suit. I predict that over time this system would improve productivity of the entire industry value chain…

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…After all, we can put man made objects into space, and fly objects around the globe heavier than  double-decker buses, with an unparalleled safety record. So  surely we can  create a simple system that protects buyers, and drives all suppliers to improve productivity?

This problem is crying out for a solution that could completely transform the aerospace industry; and through the simple use of tech that has been readily available in everyday life for over a decade. Maybe this is a business venture that I will explore once I am finished with my studies…

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So thinking a little smaller and immediate, how can the ‘individual’ take advantage of this ‘problem’ right now? Well while the industry waits for an encompassing platform to arrive, there will be demand for small consultancy services that organisations can use to provide supplier due diligence prior to placing critical purchase orders. This process happens already, but it usually happens in-house and is focused on how solvent a supplier is – will they go bust before they produce my parts? We should also concentrate on how many of a supplier’s current orders with other clients are overdue – if they can’t fulfill current orders, then they will not likely fulfill ours either. The key to this challenge is where do you gain access to such information? The fact that sourcing this information is not easy means that organisations will be willing to pay for it.

Finally, a low hanging fruit to consider when you are writing proposals and responding to client’s request for quotes: If you are a well run productive business; why not place some data at the back of your next proposal that shows your historic delivery performance? I have never seen this in a bid for work from a supplier, yet when I am mid project with muck and bullets flying all around me, time is the most important consideration. Why not try this approach? If you win more work, feel free to buy me a beer!

danielscareers-careerladder

The above is all a brief brain dump of my thoughts. I would be really happy to talk further on the topic, or discuss any similar ideas that you readers may have in relation to this. Do you think you could help make any of the above a reality? Then please drop me a message.

2 thoughts on “Digital transformation in the aerospace industry… Really??”

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