Confluence Of Factors Drives MRO IT Investment

Implementing a big ERP in aftermarket operations inherently is typically more complex

A version of this article appears in the September 8 issue of Aviation Week & Space Technology.

If data is currency, and “the future of aviation safety will ride on the coattails of data- sharing,” says the FAA’s Peggy Gilligan, then airlines, MROs and suppliers have a vested interest in improving the efficiency and effectiveness of aftermarket information.

Aviation Week, with the help of the International Air Transport Association, surveyed airlines around the world about their planned maintenance and engineering IT expenditures. 

Over the next five years, 38.5% expect to replace MRO or enterprise resource planning (ERP) systems, and 57.7% expect to enhance them (see graph, page MRO8).

Three major catalysts contribute to increased IT expenditures: increased airline profitability; next-generation aircraft and engines that produce more performance data than previous models; and an IT transformation that includes Big Data, cloud computing, mobility and advanced analytics.

This “critical junction in IT,” says Magnus Bjorendahl, SAP vice president and global lead of aerospace, switches people from working for a system—to one where systems work for people—at their point of activity through mobility (see page MRO12). This allows businesses to transform how they operate and progress to the next level.

This opportunity is part of the reason Nordam implemented SAP to enable its systems to better communicate with its customers, many of whom use SAP.

Nordam finished implementing SAP last year—rolling it out first across its manufacturing division and then its repair segment in a staged approach, deploying “a full suite of process to support the business requirements,” one sector at a time, explains Nordam CEO Meredith Siegfried.

Implementing a big ERP in aftermarket operations is inherently more complex than in manufacturing. “It takes a lot more upfront work, as well as more fine-tuning, to meet the different scenarios” in MRO, says Siegfried, but “we already are seeing benefits from that conversion.” Manufacturing and repair operations may execute differently, but she points to strengths gained in shared services such as accounting, master data management and supply chain.

These gains don’t come without data and processes preparation beforehand.

“If an operator (or MRO) is not willing to change processes to take advantage of an integrated approach, they probably should not pursue an integrated system since they may not achieve enough benefits to justify the real implementation challenges,” notes Rick Wysong, director of PwC’s transportation and logistics advisory practice. Companies that need to customize the software “dilute one of the advantages of an integrated platform: easy access to future upgrades to reflect regulatory changes and evolving industry standards,” he adds.

One size doesn’t fit all, which is a reason legacy-type system upgrades continue.

However, smart aftermarket companies are working on collaborative ways to eliminate dual data entry with their customers—they are integrating across the supply chain (see page MRO22)—because data is currency. 

—Lee Ann Tegtmeier Chief Editor MRO

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