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Fast 5: Stan Deal On Boeing Global Service Investments

Stan Deal, BGS president and CEO, spoke with Lee Ann Shay as part of an interview for this article about the airframe OEM aftermarket landscape.

Stan Deal leads Boeing Global Services (BGS), which was formed July 1, 2017, to harness capabilities across its commercial and defense services portfolio. Last year, BGS delivered $16.5 billion in revenue, with a goal of $50 billion annually within a decade. Deal, BGS president and CEO, spoke with Lee Ann Shay as part of an interview for this article about the airframe OEM aftermarket landscape.

Several airlines that I’ve spoken with recently are really trying to better forge data links between divisions, such as maintenance, purchasing and operations, to break out of silos. How would Boeing’s new self-service analytics tools help them do this?

We believe connecting the ecosystem within an airline is an important part of optimizing and getting costs out or getting reliability up. We’ve been positioning the digital and analytics portfolio to start to link the day in a life of an operator across disciplines. That’s exactly how we’re thinking about the expansion of our portfolio in the market. Candidly, we’ve been on the same journey internally—how do you drive optimization with the use of analytics. Until you connect the silos—engineering, maintenance and the production system in the case of a Boeing factory--you really don’t fully tap the potential that the analytics tool have.

Where are you in the journey of breaking down silos within Boeing, as part of BGS, and creating efficiencies and new opportunities?

That was part of Boeing’s overall strategy in setting up Boeing Global Service--to facilitate driving a new operating rhythm across the Boeing company, where we are acting more collectively as a bigger Boeing business. The cause and effect of decision-making of how you productize a new Middle of the Market airplane or a T-X trainer on the defense side—and how you think about sustainment and support—those have to be interdependent and interlinked. A big part of setting up the Boeing Global Services division was redefining the interdependencies of the Boeing Company. We’ve done that. Dennis (Muilenburg) has talked in some of his external briefings about “One Boeing” and driving best decisions for customers. We’ve done that. As we are unleashing our data analytics tools internally, a big part of it is working across value streams—working across various parts of the company to get at what drives flow times and costs--to get it out of the system so we can be even more competitive for our customers

What HorizonX investments excite you most as related to services?

How to use artificial intelligence (AI) in and around the aviation community to aid decision making to augment human decision making—that’s powerful technology that has promise. Whether it becomes even more predictive and proactive in maintenance teams, I think some of the machine learning and AI applications could have promise, and could be transformative to the way you run a system. To your earlier point, airlines are reaching the conclusion that they somehow need to get engineering, flight ops and passengers services teams more interactive and more interlinked. The use of AI long term could be transformative. How the transportation system evolves longer term is unknown—will there be more autonomy? We already do some autonomous flights. As the technology matures, we’ll have to overcome public perceptions and regulatory concerns, but you can see some of the bets we’re placing in HorizonX point toward that direction long term. That could be an opportunity to transform the whole airline sustainment model.

To get BGS to a $50 billion entity, what’s your outlook on acquisitions, partnerships and organic growth?

Number one is to look at the organic investments we can make—betting on innovations within our teams who create great ideas we can take to market. We will then look at M&A along the way. We’ll look at partnerships. We announced a partnership with Adient for seats--that was a deliberate output of our thought about being more vertical in some key areas to create value for our customers on the product side--and for the long-term service market because every four to six years there is a refresh of interiors. We’re playing in that market and having a strong partner is a plus. We’ll have a steady drum beat of investments to help customers address pain points they see in terms of being more efficient to drive their growth.

If you were to give BGS a score on costs, how are you doing?

I think we’re doing well but the journey is never over. The competition in the market is never ending and what’s fun about the services environment is that we don’t just have one or two competitors—we have hundreds. Every day we are focused internally on how we change our competitive positon—at the absolute cost level or whether it’s by differentiating our service with more capabilities that the airlines, for instance, can convert to time saved, efficiency or cost savings. So, I’d give us a good rating, but I’m not satisfied. We’re going to keep going.

 

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