Aerospace and defense ecosystem playbook has been saved
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Aerospace and defense ecosystem playbook
Implementation guide for the aerospace and defense industry as it continues to enlist smart manufacturing to transform
While some aerospace and defense (A&D) companies have embraced digital technology, innovation continues to disrupt and reshape the industry, creating a need for more agile production processes. Although there are many use cases for digital technologies, without an organized approach, investments could fail to deliver results. Our guide identifies a path forward to accelerate progress.
A&D investments in smart manufacturing
In October 2020, Deloitte and the Manufacturers Alliance for Productivity and Innovation (MAPI) jointly launched the study, Accelerating smart manufacturing: The value of an ecosystem approach, to identify the ways in which ecosystems can potentially accelerate aerospace and defense digital transformation.
A&D executives surveyed are allocating 32% of their overall factory budgets to digital initiatives, implementing on average more than eight smart use cases. However, only a few participants have these use cases operational at one or more facilities. How are certain A&D companies able to achieve faster progress and better returns on their investments?
Ecosystems pathways in the aerospace and defense industry
While 78% of A&D executives surveyed indicated value from their external alliance partners, they may not be fully leveraging the power of the network to which they are connecting. This is where an A&D ecosystem approach can dial up the results.
Deloitte and MAPI’s 2020 Smart Manufacturing Ecosystem Study has identified a path forward that can accelerate progress toward an A&D ecosystem approach to embrace digital transformation.
The A&D ecosystem approach: Amplifying collective network strength
A smart manufacturing ecosystem, similar to an innovation ecosystem, is formed when different entities come together in meaningful ways to solve shared challenges and meet shared objectives.
Ecosystems allow for greater capacity and flexibility in adapting to the new world at scale. This not only enhances competitiveness, but also helps to respond to disruptions better.
Four primary types of ecosystems support smart manufacturing initiatives:
- Production
- Supply chain
- Customer
- Talent
Production ecosystems provide access to unique vendors and capabilities
Ecosystems are generally driven by a convener who has the ability to connect business issues with an enabling platform.
Multiple ecosystems can exist simultaneously, each with its unique vendor connections and capabilities.
A&D companies, instead of reaching out directly to vendors, can approach such conveners and gain access to specific technologies or enable certain use cases more quickly.
The A&D ecosystem approach can also help companies connect to more partners. According to our survey, A&D companies that joined ecosystems were able to create many more relationships, both directly and through their ecosystem conveners, and leverage them to accelerate their smart factory efforts.
These include 4x more connections with Industry 4.0 vendors, operational technology vendors, and automation providers—the three partners A&D companies indicated are providing the most value to their digital initiatives.
One key to success is understanding how to effectively manage these connections to amplify their impact.
Pathways to an ecosystem approach
The ecosystem approach can work, but it’s not easy. It requires a deliberate method that often involves an executive commitment to solving priority business issues with smart manufacturing and the creation of a road map with important milestones.
To support the road map, A&D companies often reach out to their ecosystem to build an enabling platform with an enterprise architecture. Curating connections strategically, A&D companies then accelerate their initiatives while determining which specific advanced capabilities to cultivate in-house.
An implementation framework to consider:
Key questions to keep in mind while developing the road map:
• What’s your vision for the next five years for digital?
• What use cases or business challenges are priorities to solve for?
• How can you accommodate for varying levels of maturity across your footprint?
• What do you need to do right now (capabilities) that will lead to bigger things in coming years?
Key factors in driving the strategy road map forward:
• Set up an executive team to drive the A&D ecosystem approach, which should include people from key business areas and operations. It should be business-led and technology-enabled.
• Focus on unlocking the benefits of the ecosystem—that is, easier and faster access to capabilities to help mitigate the inevitable disruption.
• Allow for flexibility to help cater to division- or location-specific nuances. For instance, the cloud provider or data platform can be decided at the corporate level, but the committee can allow for flexibility at the facility or division level for different vision systems or manufacturing execution systems (MES)—depending on the need.
Building a digital platform in line with an enterprise architecture for smart manufacturing can be critical to support business priorities.
The strategies should include necessary core capabilities, but also reflect the use cases and the corresponding technologies that drive them.
The method here is driven by a layered approach to use cases wherein the underlying technology platform remains consistent, thereby helping A&D companies expand beyond current or include new use cases in the future.
A&D companies should consider applying the philosophy of strategic sourcing for their ecosystem approach, but frontload the approach with strong relationship development. Other aspects to consider:
• Collaborate and form relationships with partners that share your values and passion
• Focus on forming bidirectional relationships where you are bringing your challenge or opportunity to them, but they also bring things to you—making sure there’s a give-take dynamic
• Agree how value will be measured from these relationships
While external partners can provide faster access to smart use cases and technologies, upgrading select in-house talent and capabilities can likely help manufacturers to scale those benefits.
Determine which capabilities differentiate your business and support your long-term vision.
Include a talent pipeline strategy to continually upskill the capability.
Consider whether developing centers of excellence (CoEs) or technology influencers within the firm is appropriate.
Be deliberate about which capabilities make more sense to continue to source through the ecosystem’s partnerships.
Start your smart manufacturing ecosystem
- Define scope. Don’t build capabilities you don’t need. If you understand the nature of the business issue, the scope of the solution becomes easier to understand.
- Act with speed. Speed is one of the key benefits of tapping into an ecosystem.
- Scale fast. It’s easy to do a proof of concept in an unscalable way. The ecosystem is ready to scale your test case. It brings scalable capabilities that are ready to respond.
- Systemize the process. Create repeatable steps so that as you continue to activate new business use cases, you can tap into the ecosystem more readily.
About the study
The study included an online survey of more than 1,000 executives at manufacturing and aerospace and defense companies across three key regions globally: North America, Europe, and Asia. It also included executive interviews with more than 30 leaders from manufacturing companies and ecosystem participants.
Want to learn more about the value of smart ecosystems? Read our full report.
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