Aviation industry can save up to 1.6 billion US dollars a year

Stuttgart. Passenger levels are rising by 5 percent a year worldwide, and global demand is doubling every 15 years. To accommodate this growth some 30,000 new aircraft will need to be built by 2030. That in turn means that the major aircraft manufacturers are looking at very full order books over the long term. But a big problem associated with this generally positive development is the question of whether planes that have been ordered can be delivered on time. As it is now, only 80 percent of new aircraft are delivered to customers by the deadlines specified. For new models there can even be years of delays, due to factors such as an inability to acquire the requisite components on schedule.

To study the reasons for these delays, Porsche Consulting started an industry-wide survey of top managers at aircraft manufacturers, and of suppliers and logistics service providers. The results show that all of the partners in the supply chain need to change their approach and become more efficient by doing comprehensive and consistent planning and by integrating suppliers. It is not necessary to increase production capacities, but rather to make better use of them. In certain cases this can free up to sixty percent of existing capacities.

“Growth without growing” is the key formula. With its “New Value Chain to Increase Efficiency in Aviation,” the experts at Porsche Consulting have developed a way to improve delivery rates and profitability. This approach can raise delivery reliability to more than 95 percent and generate an average of 20 percent more productivity potential. In current terms that would correspond to annual savings of 1.6 billion US dollars.

In order to realize this potential, every member of the supply chain needs to improve in the areas of transparency, quality planning, and professionalism. For example, 77 percent of the companies surveyed have insufficient knowledge of their customers’ needs and consequently build up extensive inventories. “Communicating needs within stable and long-term frameworks is the only way to harmonize the entire supply chain,” says Joachim Kirsch, a partner and aviation expert at Porsche Consulting.

Porsche Consulting GmbH, headquartered in Bietigheim-Bissingen, is a subsidiary of the sports car company Dr. Ing. h.c. F. Porsche AG, Stuttgart. Founded in 1994 with a staff of four, it currently employs more than 360 people. An internationally active company with four subsidiaries of its own in Milan (Italy), São Paulo (Brazil), Atlanta (USA), and Shanghai (China), Porsche Consulting is one of Germany’s leading management consulting companies. Its experts in operational excellence advise corporations and medium-sized companies worldwide in the automotive, aeronautics and aviation, and mechanical and plant engineering industries. Clients also come from the pharmaceutical, healthcare, service, consumer goods, and retail sectors.