EVENTS: Richard Nevill Dives Into Digitalization

As a preview to the Big Data session at the ap&m Summit on May 29, Richard Nevill, founder of Aerospace Life Management Experts (ALMExp), gives his thoughts on digitalization in the aftermarket.

What is the current state of digitalization in the aftermarket?

To address this question effectively, one must first define digitalization in relation to the aftermarket. The aftermarket can be segmented into: operations, MRO, supply chain management and logistics, training and passenger experience. Digitalization can be considered as: data acquisition (sensors providing temperature, vibration, noise, location, response times etc.), data transmission (from air to ground for key parameters, and bulk ground download), data analysis and subsequent action planning (such as a maintenance check or component removal).

The least developed aftermarket area is probably MRO, since those generating the data, in this case the airline, is generally the owner. It has proved very difficult to generate a trusted ‘data lake,’ because potential service providers from OEMs to MROs to technical service providers, are all competitors. The airlines fear abuse if any one provider gets a dominant position. There are also issues with creating a single standard for data transmission.

Where will aftermarket digitalization be felt most?

Digitalization will generate value in areas such as: reduced fuel burn, fewer delays, reduced cost impact of delay, elimination of repetitive maintenance check tasks, fewer component total failures and lower spares inventory levels. This impact will be experienced throughout the entire system and ultimately, airlines should benefit the most from digitalization. It could help lead to lower fuel costs, less manpower to manage operations in areas such as line maintenance and operational delay along with maintenance planning. It could also result in fewer hot spare aircraft. Conversely, OEM and MRO providers could either win or lose, as market consolidation to gain an increased share of a market in which the revenue per aircraft in service will fall.

What do you see as analytics biggest potential impact on the supply chain?

First, it is important to recognize that analytics will not make components more reliable, nor will it reduce the cost of repair, apart from avoiding catastrophic failures by removal components in advance. The latest techniques to analyze huge volumes of data can yield benefits in many areas, for example: predictive maintenance to enable the removal of components before they fail. The simplest way to achieve this for the airframe is to copy the engine manufacturers’ approach; this will require identification of what sensors to place where, and what parameters to measure. Algorithms to determine potential system failure will need to be developed. Real-time supply chain visibility has been an industry goal for decades. The ability to link systems will provide visibility of order status, verified true and correct data on usage, reason for use and location. The benefits of this integrated approach will be seen in improved service level, reduced inventory and higher stock turn. Real-time aircraft configuration management will give lessors comfort that their the status of their assets is continually updated without the need to access physical aircraft records.

What return on investment can we expect in the short-term?

The short-term benefits of digitalization will be experienced through simplification of repeated tasks in areas such as reliability control program management and the avoidance of line maintenance check tasks, along with land tailoring activities to specific routes or aircraft. It is also important to recognize the benefits of reduced physical paperwork. ICF Consulting estimates the entire worldwide airline direct operating cost base to be circa $500 billion. One major source of saving is due to delay, estimated to be $40 billion in total. Digitalization could save up to $0.8 billion though improved turnaround and inflight routing optimization. There are additional savings to be made from minimizing the cost of re-routing and accommodating passengers that face delay and cancellation. Those who decide against a usage of digitalization open the strategic gap between their business model and the digitally enabled fleet. In 10 years’ time, half of the fleet will be new technology. Many benefits for which the data is already being collected will be felt earlier than this.

What are the key messages you would like people to take away from your session?

There are a couple. First, it is important to think about tangible benefits, and precisely where savings could be made. Second, I'd like them to recognize that the benefits will be felt over the long term, which implies long term service contracts with reliable partners.

Richard Nevill is the founder of Aerospace Life Management Experts (ALMExp). Richard's colleague Mark Kerr, principal at ALMExp will moderate a session titled 'Connected Aerospace – The Implications of Big Data' on 29 May at the Hilton Olympia, London.

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