Bill totalcare


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  • Intro self A380
    Rolls-Royce’s vision is to provide better power for a changing world. We are committed to working at the forefront of science and technology to meet the demands of our fast changing world, through understanding our customers, through innovation to give profitable growth.
    Our annual revenues are in excess of £10 billion across the 4 sectors in which we operate, and more than half of this is through services. Whilst our Marine sector has a £4 billion order book and revenues in excessive of £2 billion 40% of which are services, Energy 2/3 of revenue from services- I am here to talk of Civil Aerospace, our prime service…..
    55% of our £6.5 billion revenue is service. Civil engine demand over the next 20 years is forecast at US$975 billion, creating a services opportunity of US$700 billion over the same period.
    We don’t make cars.
    Services WHY? My business model is dying, it is cash hungry and risk high- revenue is “back end loaded”. We compete against GE and United Technologies, two of the worlds biggest companies- we’re a small company in comparison. SAVE the business- yes we are a strong company, we didn’t flinch in the fiscal squeeze- why? Services are why- we had already fundamentally changed.
  • TotalCare® , is the flagship brand for Rolls-Royce Civil Aerospace tailored for individual operators, offers a range of services from Rolls-Royce covering all aspects of asset management in support of it's Civil Aerospace products. Building on Rolls-Royce's leading knowledge, experience and infrastructure, these services include elements such as predictive maintenance, logistics management, and repair and overhaul activities world-wide. TotalCare offers the opportunity to remove uncertainties from engine management and improve operational reliability for operators through a mutually aligned business relationship.
    In its basic, simplified form can be considered that the airline pays Rolls-Royce periodically for each hour/ flight that the engines have completed- when the engine is removed from the aircraft for major maintenance typically in an overhaul facility Rolls-Royce pays for the maintenance and will return a fully serviceable engine good to fly again.
    Also, we provide real-time diagnostic services- we see struggling engines Engine Health Monitoring. We write workscope for engine maintenance that are the bench-mark.
    REMEMBER a new engine may cost $10M, but it may be overhauled 7 times in its life at $5M each time, the services….
  • These 3 slides are intended to be read in quick succession as a 'hook' to the presentation.
    "So how did we get to this position?"
    Top 20 airlines by revenue, 2011
    Airlines without TotalCare:
    Air France-KLM group (AF now XWB customer, TotalCare under discussion)
    Japan Airlines Corporation (not currently RR large engine operator)
    Southwest Airlines (not currently RR large engine operator)
  • These 3 slides are intended to be read in quick succession as a 'hook' to the presentation.
    The Trent family of engines are the large civil engines that go on modern wide body aircraft, the Trent 700 on A330, Trent 800 on 777, Trent 500 on A340, Trent 1000 on 787, my own 900 on A380. Next Trent XWB on A350.
    "So how did we get to this position?"
  • These 3 slides are intended to be read in quick succession as a 'hook' to the presentation.
    Every Large Engine TotalCare customer has gone on to select TotalCare on newer Rolls-Royce acquisitions.
    "So how did we get to this position?"
    This didn't happen overnight - we didn't simply decide to develop TotalCare services one day, then go out the next day and offer these to our customers. In fact, it has taken around 20 years to get to this position, and a lot has changed over that time.
  • The slide is an example of something that demonstrates how perspectives have changed over the past 20 years or so.
    20 years ago, if one was to give a presentation, it was necessary to produce a single transparent plastic 'foil' for each image to be show. Typically these would be printed in black and white - colour was expensive. the slides would then often be mounted on a cardboard frame, to enable them top be placed centrally on the Overhead Projector ("OHP").
    This was accepted and expected.
    Around 10 years ago you could make a good impression when giving a presentation, by taking with you, in its own rolling suitcase, a projector, from which you could show a presentation.
    Nowadays, this is expected both by the presenter and the audience. In fact, you would be surprised to find a conference room without a projector, or a large screen television on which to show your pitch - you take it for granted.
    So, what of tomorrow? well, people's expectations are always changing, and innovations come along - who knows
  • Industry expectations are more and more demanding and with the Trent family of engines, Rolls-Royce continues to exceed expectations and set new levels in customer service and reliability.
    Operator expectation has steadily changed over time:
    When the first 747 entered service, integrity and safety was key. As such, the industry looked to monitoring reliability levels IFDSs and other service events were monitored and issues causing these worked upon.
    This was followed by large twin engine aircraft such as the Airbus A330 and Boeing 777 entering service, further changing industry expectation and the IFSD rates were critical (2 per 100,000hrs), events had to be contained to prevent further incidences, and corrective actions had to be developed quickly.
    As the A340-500/600 and Boeing 777-300ER entered service and long thin routes were opened, operators were concerned about remote site events and started to drive the industry towards zero events away from base. Airlines also began to focus more on events rather than just rates.
    The rise of the Airbus A380 with significantly more passengers and the next generation wide body aircraft, the Boeing 787 and Airbus A350 XWB, has led the industry to have an expectation of zero operational disruption.
    For over a decade, Rolls-Royce has been at the forefront of developing and providing comprehensive service packages for managing engines throughout their life-cycle.
    In the early 1990’s Rolls-Royce set out in a strategic direction to change its operating model, and to change how it approached the marketplace and its customers. By using the knowledge inherent in designing the engines, the information generated from engines in operation, and its rapidly growing infrastructure, Rolls-Royce embraced a philosophical change – and became the leading service provider to the aviation industry.
    Pre 1990 the company’s business model was driven by spare parts sales which occurred when engines were removed for overhaul.
    As the company gained market share in the 80’s & 90’s we developed an MRO network in partnership with customers and started to offer rudimentary MR&O services such as work scoping.
    The concept of TotalCare originated as a market leading mechanism to address a fundamental conflict in the traditional aftermarket business model, where the engine OEM (original equipment manufacturer) realises a profit opportunity when a customer experiences disruption to their operation as a result of maintenance needs or poor engine performance.
    Fundamentally, TotalCare rewards reliability, a factor valued most highly by customers. By being charged on a $/engine flying hour basis, TotalCare makes reliability and time on wing a driver for profit for both airline and OEM.
    TotalCare provides customers with an aligned business concept, where Rolls-Royce is incentivised to actively manage an engine through its lifecycle to achieve maximum availability and utility, with a by-product of enhanced asset value.   
    Today TotalCare treats engines as assets, moving away from the maintenance cost payment plan philosophy of a decade ago. Rolls-Royce is developing its understanding in key areas of asset management, such as engine fleet management and advanced logistics management. Through working with customers, Rolls-Royce is developing new ways to apply that knowledge to both the customer’s operation and to how it designs engines in the first instance.
    The Rolls-Royce vision for TotalCare in the future is to exceed customer expectations by managing assets in a highly planned and predictable way. This will allow the operator to truly focus on achieving excellence in flying their customers.
  • Customers refers to individual airlines flying aircraft – new customers with aircraft yet to enter into service are excluded (except for the 2015 view)
    This is phenomenal growth- we need an infra-structure.
    Our focus on services has coincided with airline consolation or growth- scale in maintenance is important, e.g. we bought 50% share in AA overhaul base. We jointly created N3 with Lufthansa.
    Think, how many spare engines does AA want in Heathrow, away from main base? But 1/3 of departures of 777 are from Heathrow, buy into scale you cant afford!
  • Early '00s: TotalCare continues to evolve and with uptake in the marketplace high on new a/c. Competitors react almost a decade later from when TotalCare was launched, but TotalCare has moved on significantly from then
    Late '00’s: TotalCare scope of coverage expands in line with feedback received with airlines to align our business objectives for mutual benefits. Fuel partnership as an example. Competitors playing catch up.
  • Rolls-Royce perspective brings forward revenue- traditional model Rolls-Royce spend in development of a new product measured in hundreds of millions of pounds but has no significant revenue (sales are approx. break even) until the first overhauls which are expected to be 4-6 years after entry into service. Long-term contracts give a clearer view of revenue. Interestingly some protection from Parts Manufacturer Approval (PMA) i.e. uni-part competition- smaller market and business case.
    TotalCare® , is the flagship brand for Services from Civil Aerospace tailored for individual operators, offers a range of services from Rolls-Royce covering all aspects of asset management in support of it's Civil Aerospace products. Building on Rolls-Royce's leading knowledge, experience and infrastructure, these services include elements such as predictive maintenance, logistics management, and, of course, repair and overhaul activities world-wide. TotalCare offers the opportunity to remove uncertainties from engine management and improve operational reliability for operators through a mutually aligned business relationship.
  • Our >> 10,000 rpm machine with peak temperatures hotter than the surface of the sun’s surface, with components in environments hundreds of degrees above their melting temperature- needs to be a “plug’n’play” item for 5-7 years being used for 14 hours a day. For us to be the boring vendor because it all just happens. To achieve this we needed to , and need to, develop a Service thinking culture and a service delivering product. We sold hundreds of Trent XWB engines with TotalCare contract with 15-20 years forward business before the first development goes to test.
  • Inter-linked attributes.
    Maturity- meets business requirements on day one.
  • Change in our design mind-set.
    Traditional design attributes: weight, fuel consumption, unit cost, delivery on time to certification.
    New attributes: time on wing, life cycle cost or endurance. We don’t make money when engines fail, not any more.
    These are hard to prove on day one- demonstrating is expensive. It is human nature to prefer doing easy, well understood tasks rather than hard ambiguous tasks.
    How do I flow down requirements to an individual component or designer? In understandable terms. Reinforce those the communication model of why-how-what. If you get what you measure- what should I measure?
    DFMEA model facilitated around service attributes @ feature level and this needs to drive the design philosophy. Design trade-offs need to be explicit
    Our development programme now isnt just to meet our regulatory requiremetns- our product is safe, will always be safe, will conform to regulations but will it meet the customer and business expectation for the next 25 years. Currently, on Trent 900 burning $1M of fuel in endurance testing
    This is a massive change for us…. It is still a challenge a mindset has existed “certification” on time- doesn’t matter what.
    A challenge as we “inherit” an installed based of products.
  • Time on wing is where we get our revenue. Time in shop is where we spend our money-
    The time on wing drives our business, it drives spares demand- on costly and long-lead time parts, cash provisions, profit effect in year and future years, drives capital commitment in spare engines and overhaul capacity.
    Conflict between cost opportunity and planned and predictable.
    Lagging indicator… its too late by the time you know.
    When we take profit
    Methodologies are imprecise if they are data driven- we use Weibulls
    Methodologies maybe inaccurate if design calculated.
    Complexity of variable inputs.
    Conflict between cost opportunity and planned and predictable. If I predict 200 engine overhauls per year +/- 20% how much inventory do I can, how much infrastructure.
  • In this context of mean the costs at SV.
    Keep it on-wing, don’t look at it, don’t take it apart, repair it, put in a new one.
    Traditionally we have only focus on the lowest geared lever, i.e. unit cost.
    We’re changing organisation structre, having roles of Life Cycle engineers, using contractors who are paid on life cycle cost reduction delivered.
    The worst component is 0.9 SV interval capable, it’s cost plus 10% of revenue for the SV interval…. It had better be worth it.
  • Future and Application of Services
    Recommend: Target continuing areas of conflict of interest- cost, time on wing, fuel burn – they aren’t threats they are tomorrow’s business..
    Understand the biggest new levers in your buiness- drive organisational thinking in that area.
    Broader service, now a under wing service- i.e. growth of scope. Do the airlines need a powerplant team, why do they need their own in-house experts.
    Think – offerings for an aging fleet, what do customers want to pay for an old engine for maintenance.
    The move to services has changed and saved Rolls-Royce given us £60B order book over the coming 15 years. THINK WHAT CAN IT DO FOR OTHER COMPANIES?
  • Bill totalcare

    1. 1. Rolls-Royce proprietary information Bill Morris Rolls-Royce Trent 900 Assistant Chief Life Cycle Engineer
    2. 2. Rolls-Royce proprietary information TotalCareTotalCare®®
    3. 3. Rolls-Royce proprietary information
    4. 4. Rolls-Royce proprietary information
    5. 5. Rolls-Royce proprietary information
    6. 6. Rolls-Royce proprietary information A changing world What will tomorrow bring?
    7. 7. Rolls-Royce proprietary information Evolution of expectations
    8. 8. Rolls-Royce proprietary information Evolution of our services Continuous improvement to meet industry needs
    9. 9. Rolls-Royce proprietary information Services development
    10. 10. Rolls-Royce proprietary information Rolls-Royce services Rolls-Royce leads the way in service development
    11. 11. Rolls-Royce proprietary information VIDEO
    12. 12. Rolls-Royce proprietary information Operator risks and security
    13. 13. Rolls-Royce proprietary information TotalCare summary TotalCare simplifies today’s airline operations Fixes engine maintenance cost Aligns business structures Increases aircraft availability Allows airlines to focus on core business Fully transfers financial risk
    14. 14. Rolls-Royce proprietary information Technical contributions
    15. 15. Rolls-Royce proprietary information Design for service
    16. 16. Rolls-Royce proprietary information Time on Wing
    17. 17. Rolls-Royce proprietary information Cost of ownership
    18. 18. Rolls-Royce proprietary information Trusted to deliver excellence The information in this document is the property of Rolls-Royce plc and may not be copied or communicated to a third party, or used for any purpose other than that for which it is supplied without the express written consent of Rolls-Royce plc. This information is given in good faith based upon the latest information available to Rolls-Royce plc, no warranty or representation is given concerning such information, which must not be taken as establishing any contractual or other commitment binding upon Rolls-Royce plc or any of its subsidiary or associated companies. © 2013 Rolls-Royce plc