Aerostructures tooling equipment_20120326_roland_berger


Published on

Aerostructures Tooling Global Market study 2012

Published in: Business, Technology
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Aerostructures tooling equipment_20120326_roland_berger

  1. 1. 1Areostructures_Tooling_Equipment_FINAL_short.pptxMunich, March 2012The global aerostructurestooling equipment marketStudy summary
  2. 2. 2Areostructures_Tooling_Equipment_FINAL_short.pptxExecutive summarySource: Roland BergerWHAT IS THE STUDY ABOUT?> Roland Berger conducted a study about the global aerostructures tooling equipment market based onextensive desk research and expert interviews as well as bottom-up market modeling along the value chain> In 2012, relevant market expected to reach all-time peak of USD 1.4 bn stimulated by A350 and B787 programs> However, in 2020, market downturn by 75% to USD ~400 m expected due to lack of new programs> Consequently, installed capacity exceeds demand – Shift towards optimization/retrofit of existing equipment> Service market share in 2020 of ~60% indicates need for full service offers, e.g. consulting or process optimization> In addition, demand for simplified products and turnkey solutions at lower costs from emerging marketscombined with upcoming local suppliers drive trend towards cost efficient standardization and modularization> Overall, aerostructures tooling equipment industry expected to undergo industrialization – Reflected byautomated processes, flexible production systems or other learnings from already industrialized industries> Roland Berger expects that only two business models ensure a sustainable business– Turn-key provider – Service-driven business model capitalizing on need for comprehensive turn-key solutions– System optimizer – Focusing on in-depth know-how of single systems to optimize existing equipment> Roland Berger experts have a proven track record in the aerostructures tooling equipment market and are readyto support you in securing your success and preparing for the upcoming future challenges
  3. 3. 3Areostructures_Tooling_Equipment_FINAL_short.pptx© Roland Berger Strategy ConsultantsContents PageA. Research approach and market definitionMarket estimation derived from underlying end markets and expert interviews 4B. Market for aerostructures tooling equipmentVolume of USD 1.4 bn in 2012 falling to approx. USD 400 m in 2020 9C. Need for action and recommendationsShift in market and increase in volume and scope of services 21
  4. 4. 4Areostructures_Tooling_Equipment_FINAL_short.pptxA. Research approach and market definition
  5. 5. 5Areostructures_Tooling_Equipment_FINAL_short.pptxOur study analyzes the highly dynamic tooling equipment market forthe aerostructures industryBackground, methodology and key findingsBackground KEY FINDINGSMethodology> OEM (civil and military) andaerostructures market has beencharacterized by an increasedworkshare and responsibility ofsuppliers and a shift to newmarkets as well as volatiledemand in recent years> Tooling equipment market facesa broad range of challenges inline with increasing demand forindustrialized process andprocess stability/reproducibility> Third RB tooling equipmentstudy analyzes this key market,major trends and successfactors for the future> Interviews along the entirevalue chain of aircraft production> Desk research and competitorbenchmarks> Market model for toolingequipment is based on adetailed modeling of underlyingcustomer markets and expertinterviews> Market forecast 2010-2020> Trends & developments in thetooling equipment market> Strategic challenges andsuccess factors for differentbusiness models> Key strategic recommenda-tions to ensure future businesssuccessSource: Roland BergerA RESEARCH APPROACH AND MARKET DEFINITION
  6. 6. 6Areostructures_Tooling_Equipment_FINAL_short.pptxSource: Roland BergerGlobal AerostructuresTooling EquipmentMarket 2010-2020INDUSTRY INTERVIEWSGlobal aerostructures tooling equipment market studyDESK RESEARCHCUSTOMER INTERVIEWSEQUIPMENT SUPPLIERSThe global aerostructures tooling equipment market study coversnearly all leading industry players and expert sourcesA RESEARCH APPROACH AND MARKET DEFINITION
  7. 7. 7Areostructures_Tooling_Equipment_FINAL_short.pptxWe followed a unique, detailed approach – Relevant market derivedfrom underlying customer markets worldwideStudy approach and results> Market development (productoffering, segments and regions)> Current and future customerrequirements along value chain> Relationship between marketdrivers for OEMs and theaerostructures and equipmentmarkets> Technology trends in aerospaceindustry and influence onequipment manufacturers> Current and future successfactors for tooling equipmentmanufacturersResultsSTUDY APPROACHSource: Roland BergerGlobal civil and militaryaircraft marketAerostructuresmarketToolingequipment marketStarting point is a forecastfor the OEM market forcivil and military aircraftand helicopters by modelBased on a detaileddemand forecast, wederive the globalaerostructuresmarket of OEMs andTier 1-3Using our insights intocustomer markets, wethen forecast thetooling equipmentmarket in detailA RESEARCH APPROACH AND MARKET DEFINITION
  8. 8. 8Areostructures_Tooling_Equipment_FINAL_short.pptx> Automated and semi-automated systemsand equipment for drilling, riveting andwelding components/modules> Major suppliers: Brötje Automation,ElectroImpact, Gemcor, Loxin 2002> Systems for high-precision movement andpositioning of components and moduleswithin the assembly process> Major suppliers: AIT, Brötje Automation,Dürr, ECA, MCE> Manual and automated systems for fixing,mounting, storage and transportation ofcomponents and modules> Major suppliers: virtually all OEMs,aerostructures and equipment suppliersSegmentMarket definition and scope of the studyFrom a customer perspective, the aerostructures tooling equipmentmarket can be clustered into three main segmentsSource: Expert interviews, Roland BergerScope of study: aerostructures tooling equipmentDRILLING &RIVETINGIPOSITION-INGIIJIGS,HANDLINGANDTRANSPORTSYSTEMSIICFRP1)manufacturing> Machines formanufacturingCFRP parts,mainly automat-ed tape laying(ATL) andautomated fiberplacement (AFP)machines1) CFRP: carbon fiber reinforced plasticsNot in scopeA RESEARCH APPROACH AND MARKET DEFINITION
  9. 9. 9Areostructures_Tooling_Equipment_FINAL_short.pptxB. Market for aerostructures tooling equipment
  10. 10. 10Areostructures_Tooling_Equipment_FINAL_short.pptxVolatile demandmainly driven byoverall economicdevelopmentMajor market drivers – overviewFour drivers characterize automated tooling equipment market – Newprogram launch, rate increases, cost pressure & new technologySource: Expert interviews, Roland Berger> Launch of new programs requires developmentand installation of customized equipmentStart of new programs> Significant increases of cadence for existingmodels require higher automation and processindustrialization and even add-on capacityRate increases in existing programs> Increase in productivity to reduce unit costs> Increase in process stability/reproducibility andreduction of supply chain risksCost/efficiency pressure> New, more efficient technology and materialsdrive adjustments/replacements of equipmentNew technology & materialsPURCHASING NEWEQUIPMENTI> Development and procurement of new, model-specific systems and equipment formanufacturing and assembly> Investment often within a period of 2-4 yearsINDUSTRIALIZATIONII> Upgrades/updates of equipment & systems> Partial or full automation of manual processes> Increase of process stability throughautomation, measuring and control technologyOPTIMIZATION OF EQUIPMENTIII> Process optimization based on existing equipment withminimal investment to increase outputB MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT
  11. 11. 11Areostructures_Tooling_Equipment_FINAL_short.pptxIn 2010, the tooling equipment market was worth USD 1.1 bn –Largest segment is positioning systems for final assemblyService140Final assembly40020(5%)200(50%)180(45%)Moduleassembly30050(17%)125(42%)125(42%)Sub-moduleassembly27045(17%)98(36%)127(47%)Global aerostructures automated tooling equipment market1), 2010 [USD m]> Jigs, transport, logistics andpositioning systems are the largestsegments, worth approx. USD 430 min total in 2010> Riveting and drilling equipment havearound a 10% market share – mainapplication in sub-module (e.g.fuselage shells/hull) and moduleassembly (e.g. fuselage sections)> Within final assembly there is limitedautomated riveting and drillingequipment demand – large share ofmanual labor supported by jigs andpositioning systems> Demand for jigs and handlingsystems grows with increasingcomponent sizeCOMMENTSSource: Expert interviews, Roland Berger1) Excluding automated carbon fiber equipment (AFP, ATL)Jigs,transport,logistics(total: 432)Positioning(total: 423)Riveting, drilling,robotics(total: 115)TOTAL VOLUME: USD 1,110B MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT
  12. 12. 12Areostructures_Tooling_Equipment_FINAL_short.pptxDemand will remain at record levels in the short term – Significantdownturn and shift to service expected from 2013 onwardsAerostructures tooling equipment market, 2006-2020e (illustrative) [USD m]+83%11e1.29089%11%101.110-73%13%0989084%16%87%14e94483%17%13e1.20288%12%12e1.42690%10%17e42548%52%16e63669%31%15e78977%23%20e38538%62%19e38037%63%18e36437%63%081.11988%12%0790486%14%0678185%15%As of today nonew programsafter 2016announced> A350 (and last phase of B787 tooling)drive peaking market in 2011 and 2012> Start-up of new programs in China andRussia dampens the declining demandin medium term from 2013 onward> Slump after 2016 due to lack of newprograms at that stage between EIS ofA320 NEO/B737 MAX and end of thedecade on LCA> Substantial shift towards optimizationand retrofit of existing equipmentcauses significantly reduced volume> Rate increases covered by optimizationof existing systems with only lowinvestments – significant rate increasesrealized by duplication of existingsystems including minor adjustments/improvementsCOMMENTSNote: USD:EUR exchange rate: 1.35EquipmentServiceSource: Expert interviews, Roland BergerB MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT
  13. 13. 13Areostructures_Tooling_Equipment_FINAL_short.pptxRelationship of market drivers in OEM, aerostructures and tooling equipment marketThe market is indirectly driven by growth in customer markets –Primary strategic and operational requirements identifiedSource: Expert interviews, Roland BergerStrategic requirements> Consolidation and specializationof players> Internationalization and expansionof footprint for targeting newmarkets> Taking on development andfinancing risksOperational requirements> Handling of complete system/module responsibility> Industrialization of manufacturing and assemblyprocess> Integration of new materialsStrategic requirements> Global turnkey capabilities for large projects> Acting as a problem-solving partner for thecomplete manufacturing and assembly process> Local engineering and after-sales expertiseOperational requirements> Suitability for interdisciplinaryglobal development partnerships> Greatest process stability andreproducibility> Flexible system design and broadareas of application> Start/ramp-up of new programs> Increase of production rates> Cost/efficiency pressure> New technologyEquipmentmanufacturing> Growth of world economy> Growth of global trade> Liberalization of air space> Development of oil/kerosene price> Development of wagesOEM (aircraftmanufacturing)> Global fleet growth> Governmental industrial policy> Cost and efficiency pressures> Risk reduction by OEMsAerostructuresmanufacturingB MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT
  14. 14. 14Areostructures_Tooling_Equipment_FINAL_short.pptxSix major trends influencing the tooling equipment market havebeen identified – Varying impact on supplier depending on segmentIMPACT ON SUPPLIERLow HighSource: Expert interviews, Roland Berger> Transition fromfactory to serialproduction> Standardizedprocesses,automation andprocess flow> Transfer of bestpractices fromother industries> One tool formultiple mo-dels/modules> More flexibleand accessiblework station ca-pable of multi-ple operations> Automated,software-basedprocess control> Standardizationand mo-dularizationwithout qualitycompromises> Product costpressurethroughemergingmarkets andOEMs> Two clustersidentified (singleaisle vs. twinaisle) – highCFRP share fortwin aisle andmedium sharein single aisle> Recent CFRPboom expectedto slow down> OEMs focus oncompetencies"systemintegration" and"programmanagement"> Supplier riskmanagementand financialstrength criticalto fulfillrequirements> Local solutioncompetence> Necessaryengineering andprocess know-how> Optimization ofexisting equip-ment1 Industriali-zation2 Flexibility 3 Cost opti-mization4 Materialmix5 Risksharing6 ServiceTRENDIMPLI-CATIONSDrill & RivetPositioningJigs & trans-port systemsB MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT
  15. 15. 15Areostructures_Tooling_Equipment_FINAL_short.pptxUse of process automation and production cadences by segment and region, 2011-2020[no. of A/C per month]Cost efficiency and industrialization are driving the market –Automation is only viable in certain programs and regions2011 20202011, relevant size for automationSource: Teal, expert interviews, Roland Berger2-4Asia0-90-61-630-40Americas0-140-71-230-40Europe RussiaTypeHELICOPTERLCA – TWIN-AISLEBUSINESSLCA – SINGLE-AISLEREGIONALA318-321, B787-6 to 9A330, B777, A380, B767, B787, B747-8Cessna Citation Mustang, Embraer Phenom 100Embraer ERJ-190, ART 42/72, DHC-8-400Eurocopter AS350, Sikorsky UH-60COMMENTS> Production rates for all civilaircraft segments will increase tomeet global demand for newaircrafts, plus the start and ramp-up of new programs> Increasing production ratedrives industrialization and auto-mation in todays core markets> Start of new programs in Asiaand Russia is shifting markets> Evolving aerostructures players inAsia and Russia require simplersystems at lower costs but withsame accuracy> Players from emerging marketsstrive for turnkey solutions dueto their lack of expertise in aircraftand aerostructures production0-61-4 MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – INDUSTRIALIZATION
  16. 16. 16Areostructures_Tooling_Equipment_FINAL_short.pptxFlexibilitythroughoutthe aero-structuresproductionprocessDimensions of flexibilityFlexibility in machinery setup and production processes is enabledby software machine controlling and automated process monitoringSource: Expert interviews, Roland Berger> Similar aircraft models (e.g. A318 andA321 on one production line)> Regular updates of aerostructures designdue to product efficiency requirements> Suppliers need for lower dependency onspecific models/componentsMulti-model machinery> Frequent re-design of processes andcomponents with effect on machinerysystems (configuration management)> Suppliers thrive for lower investmentsdue to more generic production lines andhigher integration to reduce riskFlexible production lines> One system solution for multiplemodels/modules> Machinery to be adjusted ratherthan replaced, software controlsrequired quality and precisionGrowing importance of software> Optimization of existingprocesses to increase efficiency> Higher integration andconnectivity of individual systems> Automated process monitoring asprocess enablerLearning from other industriesIIB MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – FLEXIBILITY
  17. 17. 17Areostructures_Tooling_Equipment_FINAL_short.pptxEmerging markets and overcapacities in the near future require costoptimization through standardization and modularizationDrivers and impact of cost optimizationDEMAND FROM EMERGINGMARKETS> Demand shift towards emergingmarkets> New program launches inemerging markets such asRussia, China and Latin America> Rise of aerostructures produc-tion in emerging markets withdifferent cost structure increasesprice pressure> New markets and customersrequire simpler systems andturnkey solutions at reducedcostCOST AND EFFICIENCYPRESSURE> Global demand decline comparedto current peak is expected toresult in overcapacity> OEM cost reduction initiativesforce Tier-1s to reduce shipsetprices (e.g. SCOPE, Blue Sky)> Strong focus on short ROI fornew equipment investments> Price pressure in all marketsnecessitates production and costefficiency on the same level ofaccuracy"NO FRILLS"Cost optimization throughproduct standardization andmodularizationSource: Expert interviews, Roland BergerIIIB MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – COST OPTIMIZATION
  18. 18. 18Areostructures_Tooling_Equipment_FINAL_short.pptxLarge aircraft currently being developed have a composite share ofover 50% – No further increase is expected at firstMaterial mix development as a share of total weight of aircraft structure [%]Source: Teal, expert interviews, Russia & CIS Military Newswire, Roland BergerIVB MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – MATERIAL MIXBoeing Airbus LCA1)2020eComacUAC1) average material mix Large Commercial Aircrafts (LCA) in 2020Bombar-dier2) including steel and titanium79 79 80702012 13 14111050111111537B7771981B7672 319945152011B7871969B747431967B737AluminumSteelOther TitaniumComposite7466 66 61208715 16 225266581987A320581985A300/310571472007 ~2014A38055A35071992A330/34053338~2019MS-211955~2019C91930-405-1015-2020-305-10~2015C- Series2446302)Ø 202050-558725-305> Up to B787 and A350, significantincrease in composite share("CFRP hype")> Updates of current single-aisleaircrafts (A320neo and B737max)are planned without a significantincrease in the proportion ofCFRP compared to A320 & B737> Material mix (metal vs. carbonfuselage) of new ("post-neo")single-aisle generation aircraft notyet defined, but clear preferencefor metal"Composite percentage remainsfrozen at todays level – the newA30X will have a metal fuselage"– Head of Procurement at AirbusImpact
  19. 19. 19Areostructures_Tooling_Equipment_FINAL_short.pptxOEMTier 1Tier 2OEMs demand for outsourcing larger workpackages drives ongoingconsolidation of aerostructures landscape towards "Super Tier 1s"Supplier AOEMs hand over design and supply chainmanagement to tier-1s and require risk-sharingpartnerships and large upfront investments –Some take over value chain managementSituation todayPositioning as "sub-supplier" notsustainable – Players will either have toinvest heavily and actively driveconsolidation or exitNear-term upcomingmarket consolidationAirbus (FAL) Airbus (FAL)Supplier CSupplier CSupplier BDeliveriesDeliveriesSpecsSupplier ASupplier BSource: Expert interviews, Roland BergerEvolution of aerostructures industry> OEMs hand over responsibility &risk to Super Tier 1s by givingthem design & supply chainresponsibility for completeworkpackages / systems> Responsibility for largerworkpackages together withdelay of aircraft programs (e.g.B787 or A350) demands strongfinancial backbone to ensureliquidity – But aerostructures ischaracterized by a fragmentedindustry structure in Europe andpoor financial performance ofplayers> Players from emerging marketswith a strong financial backbonedrive consolidation in EuropeImpactVB MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – RISK SHARING
  20. 20. 20Areostructures_Tooling_Equipment_FINAL_short.pptxDecreasing demand in key markets is cushioned by increasingservice demand – New service models are required> Expected increase in volume andscope of service offering in line withdecline in demand for newequipment> Key drivers are the reduction of therecord order backlog by rateincreases and rising cost pressuredue to market entry of new (OEM)players> Significant decline in demand fornew facilities in todays core markets(USA, Europe) but shift to processoptimization and efficiency plusincrease in flexibility of existingsystemsSource: Expert interviews, Roland BergerEvolution of after-sales and service market for tooling equipmentCOMMENTSServicescopeSegment volume [USD m]0 100 200 300LowHigh 20202010Maintenance,repair and sparepartsOptimization of existing plants> Automation> Process optimization> Plant layout revision> Retrofit of single and complete systems> Efficiency increase> Cost decreaseVIB MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – SERVICE
  21. 21. 21Areostructures_Tooling_Equipment_FINAL_short.pptxC. Need for action and recommendations
  22. 22. 22Areostructures_Tooling_Equipment_FINAL_short.pptxKey market trends are driven by changing key customerrequirements – Starting point for strategic implicationsKey trends and driversKEY MARKET TRENDSSimpler, costefficientsolutionsMinimal set uptime due tovolatiledemand"No frills"-products withlow cost butsame qualityProduct effi-ciency require-ments in balan-ce with produc-tion costsNeed forturnkeycapabilities andrisk-takingHigher demandfor services,shortermaintenanceintervalsKEY CUSTOMERREQUIREMENTSIncreased usage of technicalindustrialization and serial productionInvest in multi-model tools andproduction linesCost and efficiency pressure intensifiedby new entries from emerging marketsShare of composites remains stable asin latest program revisionsOngoing consolidation of aerostructu-res landscape towards "Super Tier 1s"Market development towards period offewer new equipment purchasesIndustria-lizationFlexibilityCost opti-mizationMaterial MixRiskSharingServiceIDENTIFIED TOPICSC NEED FOR ACTION AND RECOMMENDATIONSSource: Expert interviews, Roland Berger
  23. 23. 23Areostructures_Tooling_Equipment_FINAL_short.pptxWe recommend a clear strategic focus on two business models toensure sustainable business even in turbulent timesSegmentation of business models in the tooling equipment market> Wide range of customer requirements intodays core markets (Europe, NorthAmerica) and future emerging markets(China, Russia, India)> Increased segmentation of theequipment market expected> Key challenge for small, financiallyinstable players: building a clearUSP/competency area for differentiation> Key challenge for large, financiallystrong players: building a global networkcapacity to manage and control thevalue chainCOMMENTSSource: Expert interviews, Roland BergerC NEED FOR ACTION AND RECOMMENDATIONSEngineering know-howCOMPETENCE FOCUSMARKETFOCUSSYSTEM SPECIALIST> Comprehensive expertise inindividual systems/specific niches> High innovation potential> Strong brand and reputation inspecific system segmentTURN-KEY PROVIDER> Turnkey capability for complexnew projects/green field projects> Financial strength andprofessional risk management> Specification capability forsolution and interfacesSYSTEM OPTIMIZER SOLUTION PROVIDER> Comprehensive understanding ofmanufacturing and assemblyprocesses of aircrafts> Wide automation and roboticsknow-how> High customer focus and flexibility> "One face to the customer"> Control of system value chain> Strong integration know-how> Contract and risk managementIntegration know-howEmergingmarketsTodayscoremarketsI IIIVIIISustainable business models in declining markets
  24. 24. 24Areostructures_Tooling_Equipment_FINAL_short.pptxKey question for industry CEOs: How well are you prepared for thefuture challenges?KEY QUESTIONS TO THE CEOSource: Roland BergerC NEED FOR ACTION AND RECOMMENDATIONS3 6521 • Does your strategy conform to or at least comeclose to one of our future business models?• If not, do you have a clear idea of what makesyour business and company special?BUSINESS MODEL• Does your company have a delivery capabilityin tomorrows markets (e.g. Russia, China)?• Are you prepared to benefit from future growthopportunities in these markets?MARKET PRESENCE• Do you have the right people, processes andprocedures in place for turnkey solutions?• Is your company able to manage suppliers ondifferent continents along your value chain?COMPETENCE PORTFOLIO4• Is your companys cost structure flexible enoughto survive a market downturn of up to 70%?• Is your financial position strong enough to survivea temporary drop in new equipment business?COST FLEXIBILITY• Is your organization able to monitor, quantify andmanage project-driven risks and opportunities?• Do you have a clear idea how much risk yourcompanys financial position can take?RISK MANAGEMENT• Does your service portfolio cover all relevant andrequired services for your customers?• Do you have the right sales and businessorganization to push your service business?SERVICE STRATEGYSERVICE STRATEGY
  25. 25. 25Areostructures_Tooling_Equipment_FINAL_short.pptxIts character that creates impact