The world’s airlines currently serve 3.5 billion passengers a year. This figure is expected to nearly triple by the year 2030. The airlines are therefore expanding their fleets: at a single air show in Abu Dhabi, they invested 100 billion US dollars in medium- and long-haul jets. This is a generally positive situation, but it also presents challenges that need to be overcome. The airlines have to receive the planes they order on time. That requires enormous short-term growth at the factories both of the aircraft manufacturers and their extensive network of suppliers. Coordination alone of the more than four million components for a wide-bodied jet shows the logistics needed in ever more complex supply chains. The industry has to ensure excellent interplay within both the system itself and its processes. This is the foundation for a reliable supply of premium products to customers.
- The aviation and aerospace industry is growing rapidly – how can we organize our business model to manage this growth?
- Do we have the right portfolio of products and services?
- How do we deal with bottlenecks?
- Have we clearly defined all of our core areas of expertise and core technologies?
- How will we anchor continuous improvement in our corporate culture?
Strategies and solutions
Porsche Consulting has successfully completed more than 200 aviation and aerospace projects since 2005. With 40 experienced experts in the industry, our international consulting team covers a wide range of specialties – not only in the manufacture but also in the maintenance and operation of commercial aircraft.
Our work focuses on improving coordination in the supply chain. As shown by the example of the automotive industry, the efficiency of even highly complex structures can be reliably increased. Three key factors are essential: transparency in the processes, better quality planning, and a higher level of professionalism based on a new understanding of roles. The aircraft manufacturers will set the tone here. They will take responsibility for planning the entire supply chain: product innovations, for example, will be transparently and meticulously prepared. The first-tier suppliers will advance to become the link between the manufacturers and the supply network. They will become an even stronger driving force behind innovation. This new shared understanding of roles will enable all those involved to work together better. And this pattern will optimize the entire system.
Porsche Consulting’s industry-tested company analyses show what changes are needed to put the planned product portfolio into practice. Aviation corporations often grow by means of acquisitions, and are therefore strongly marked by divisional lines. This is associated with a tendency to think in compartmentalized fields of business. The expertise available in different divisions is not networked above and beyond the divisions. Porsche Consulting’s analysis generates a valuable overall view of available technologies and areas of expertise. This enables resources to be matched to future demands. One example is the processing of carbon-fiber composites: expertise in this field can be applied to structural components for commercial aircraft just as well as to lightweight concepts for aerospace or high-performance components for the defense industry.
International airlines are ordering considerably more aircraft than manufacturers worldwide can currently produce. This puts agreed-upon supply deadlines at risk. When ramping up their production, manufacturers need the highest possible degree of stability. Porsche Consulting has already successfully tested suitable strategies here. At one client’s factory, production rates were increased by ten percent. An audit analyzed all the processes in detail and compared them with benchmark values. This showed precisely the amount by which the rates could be increased. The consultants identified a bottleneck in one hangar where equipment was being installed. Three production lines supplied sections for the rear fuselage in the hangar and ten work stations fitted them with electronic systems and cables. Components were still piling up even though operations were pushing their limits. To eliminate such bottlenecks, the work was divided in new ways, an eleventh station set up and the takt was adjusted.
The consultants typically support their clients in three scenarios:
- Rapidly industrializing new ranges of aircraft
- Increasing production rates of current aircraft models
- Setting up additional production sites based on standard factories and integrated production networks
Inventory levels are deceptive and give the illusion of security. While it might seem hard to reduce them at first, doing so only brings benefits. Lower inventory levels mean more capital for investments and a greater ability to respond to market developments or changes. Porsche consultants produce measureable results by means of active inventory and range management. This starts by generating the conditions to reduce unneeded inventory. For each individual component, the optimal logistics chain is defined from supplier to final assembly. System parameters such as reserve levels and throughput times are specified in order to regulate the ranges, which are also regularly monitored. Experience in the aviation supply industry shows that up to 25 percent of inventory levels can be reduced for raw materials and semi-finished products. For end products, reductions of up to 15 percent have been demonstrated. These changes also have to be reflected in the organization, with firmly anchored roles for the individuals and positions responsible for these areas. As part of the corporate culture, these standards help to increase efficiency on a lasting basis.
Aircraft only make money in the air. Ideally, planes would fly 365 days a year. Every malfunction negatively affects punctuality and therefore also the airline’s profitability. With an industry-oriented approach, Porsche Consulting questions and examines established modes of maintenance processes, luggage conveyance, passenger processes, and airplane dispatch. In maintenance, for example, the Porsche consultants’ sophisticated methodology reduces down times by 20 to 30 percent. This brings airlines additional days of availability per aircraft. Similar potential is found in the other areas of aircraft operation, where airlines lose tens or hundreds of millions of dollars every year due to passenger and luggage delays.