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2013 best practices for aerospace and defense


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In the increasingly competitive Aerospace and Defense (A&D) manufacturing world, everyone is working to implement best practices. But not all best practices are equal. How do you decide which are just …

In the increasingly competitive Aerospace and Defense (A&D) manufacturing world, everyone is working to implement best practices. But not all best practices are equal. How do you decide which are just the table stakes and which will give you a strategic advantage?

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  • 2. In the increasingly competitive Aerospace and Defense (A&D) manufacturing world, everyone is working to implement best practices. But not all best practices are equal. How do you decide which are just the table stakes and which will give you a strategic advantage?2013 Best Practices for Aerospace and Defense 1/15
  • 3. Resources The Aberdeen Group recently identified the top strategic actions and the top business pressures facing A&D manufacturers. The gathered information revealed that these issues impact all A&D manufacturers. It also revealed that leaders have made different conscious decisions than followers, giving them a distinct advantage. Unsurprisingly, the areas in which leaders are creating the most separation from the pack take the most work. While it’s all important, the extra work in the most difficult areas results in the most dramatic advantage.2013 Best Practices for Aerospace and Defense 2/15
  • 4. ACTIONS2013 Best Practices for Aerospace and Defense 3/15
  • 5. Standardize business processes to streamline and accelerate processes. There might be and surely are areas rampant with government waste. But few industries have been more aggressive at cutting out waste than A&D manufacturing. Those manufacturers that didn’t are gone, and those that are left fully understand that if they don’t continuously strive to improve both efficiency and productivity, they will be next. CUT, COPY But it wasn’t easy. Standardizing business processes has AND STANDARDIZE been a tough transition for many organizations, especially The easy cutting wins in those that have viewed themselves as configure-, A&D are gone. The push engineer- or made-to-order. However, looking critically now is to standardize your at each step of existing processes usually identifies processes. This enables you areas that are nearly standardized or can be made so to streamline operations with minimal effort. Making these changes has proven to and increase efficiency. be extremely instrumental in the success of the leaders.2013 Best Practices for Aerospace and Defense 4/15
  • 6. Increase visibility to business processes across functions and departments. Leaders have a jump on followers and are benefitting from visibility. This enables them to get beyond individual internal silos and make strategic decisions using all INCREASE VISION available information. That’s good news. Organizations that haven’t made that move will want to quickly. Why? The enemy in front or down the road—where to focus? Two words: big data. The answer is both. Big data is the game-changer. Break If you haven’t heard the term “big data” recently, you down silos and leverage data haven’t been listening. It’s not news that our world is full to get a complete picture. of information being created at an immeasurable rate. What is news is that companies are finding ways to use that information—information from customers, suppliers, the manufacturing floor, everywhere—to make smarter decisions in their bidding and estimating. Visibility into your own processes is great. Combining that visibility with visibility into the outside world through big data can provide superior competitive advantage.2013 Best Practices for Aerospace and Defense 5/15
  • 7. Reduce costs by increasing efficiency. Everyone feels pricing pressure, especially in A&D since everyone competes for the shrinking pool of dollars and projects. Companies that haven’t been able to clearly define and streamline processes are dropping out of the competition. At some point, those companies will PUSH BACK ON be gone. Everyone left will have strong processes and PRICING PRESSURE will be efficient. Dealing with pricing pressures will rely on the accuracy of that company’s pricing information. Resources and components are commodities now. Accurate The accurate bidding and estimating of projects pricing is one area where you can and products─and the ability to do so faster than create a profitable advantage. the competition─will be key in business success That requires an ability to and profitability. leverage internal information.2013 Best Practices for Aerospace and Defense 6/15
  • 8. LEADERS DO THIS LINK GLOBAL OPERATIONS TO IMPROVED INTEROPERABILITY AND COLLABORATION. Leaders made the decision to standardize their processes earlierThe Effective Leaders than followers. The natural extension of that decision is to thenGuide: Four Critical Steps go beyond the individual plants and leverage that knowledgeto Success among other facilities and then globally. It faces the reality of today:Learn the four steps leaders even if your customers are next door, you’re competing in a globalmust take to be effectivecatalysts of change. marketplace. With that realization, they’ve made the strategicLearn More decision to be flexible and smart enough to leverage all of their assets and information. It’s not easy. But the payoff in competitive advantage is huge. 2013 Best Practices for Aerospace and Defense 7/15
  • 9. Actively manage growth expectations. The A&D market has always been a familiar group. Today, trust is recognized as the new currency. Being able to earn trust and keep it is critical for managing BUILD TRUST growth expectations. This requires an unprecedented level of transparency compared to earlier times, but it’s Trust is the new currency. It is required today to ensure required today to ensure compliance, complete audit compliance, complete audit trails, etc. Strong processes, especially bidding and trails, etc. necessary in the estimating, can provide a strong and trusted foundation. market. Strong processes, especially bidding and estimating, create the foundation you need.2013 Best Practices for Aerospace and Defense 8/15
  • 10. Address interoperability issues. Any organization with multiple operating locations has felt interoperability issues to some degree. Eliminating silos is its key to relieving the pressure. The combined effects of big data, cloud computing, the ability of pervasive computing, virtualization and SaaS applications PLAY WELL TOGETHER eliminate excuses for not being able to coordinate multiple locations. In fact, multiple locations that are not Multiple operating locations coordinated will quickly become a liability rather than an create interoperability issues. Eliminating silos is the key to asset. They won’t provide the transparency, speed or ensuring that multiple locations competitive advantage that customers expect. remain an asset, not a liability.2013 Best Practices for Aerospace and Defense 9/15
  • 11. LEADERS DO THIS EASIER TO DO BUSINESS WITH. This is a brand-new concept to the A&D industry. For years, you received specifications that came from the Department of Defense (DoD). You built the product to those specs, delivered at the lowest cost and that was it, end of story. Today products are not only more complex, the time and quality expectations are dramatically higher. The competition is stiffer. The customer experience, even in the DoD environment, is growing more critical. Customers need answers and trust through transparency. Ultimately it ties with many of the points mentioned previously, but the customer experience concept as a whole needs to be addressed strategically and from the customer’s perspective to remain competitive.2013 Best Practices for Aerospace and Defense 10/15
  • 12. More smaller projects, Fewer larger projects,IDENTIFY more profitable less profitablePROFITABLE ORDERSWhat’s a key to ensuring profitability?Accept only the most profitable andachievable orders. Take a critical look Determine actual profitabilitydeal by deal over time. Smaller deals by breaking down profitability in terms of:executed with greater precision could • Time-based costdrive the most profit. • Cost of materials • Opportunity cost of other areas 18% Gross Profit per Project 30%2013 Best Practices for Aerospace and Defense 11/15
  • 13. GOINGFORWARD2013 Best Practices for Aerospace and Defense 12/15
  • 14. Manufacturing Every industry faces strategic challenges and pressures, and Industry Trends the ones facing the A&D industry are unique. Many are new Learn how other manufacturers due to changes in the market and are complicated further are using technology to simplify processes, and by the recent and dramatic changes in technology. This create advantage. has weeded out many of the less-strategic companies; Learn More the remaining contenders will have to be diligent in their Manufacturing Matters efforts to remain competitive. Implanting best practices Get the latest news and in processes is a requirement. Right now, the leaders are thinking about manufacturing focusing on strategic decisions to build their advantage, and selling complex products and they will continue to increase their lead. and services. Learn More2013 Best Practices for Aerospace and Defense 13/15
  • 15. Cincom recognizes that it is your people—your customer-facing employees—who represent your Strength in Manufacturing brand. And in each interaction, it is the experience Cincom Total Manufacturing encompasses more than that they deliver to your customers that either builds 44 years of manufacturing value for your brand or destroys it. It is a powerful role to expertise. Results customers play. Since 1968, Cincom has helped thousands of clients have achieved include doubling manufacturing worldwide by solving complex business problems with volume and cutting its software and services. turnaround times by 50%. Customer Stories2013 Best Practices for Aerospace and Defense 14/15
  • 16. © 2013 Cincom Systems, Inc. All Rights Reserved Developed in the U.S.A. FORM CMUS1302032 3/13 Cincom and the Quadrant Logo are trademarks or registered trademarks of Cincom Systems, Inc. Microsoft and Microsoft Dynamics are registered trademarks of Microsoft Corporation. All other trademarks belong to their respective companies.2013 Best Practices for Aerospace and Defense 15/15