Printed headline: Snooze and Lose
Technologies driven by Industry 4.0 will likely affect every company that operates within the aerospace and defense (A&D) industry, from original equipment manufacturers to small suppliers.
There is a clear and compelling case for leveraging digital design tools, cognitive capabilities (artificial intelligence and machine learning), the Internet of Things, advanced analytics, blockchain, augmented/virtual reality, additive manufacturing and advanced robotics to achieve a competitive advantage. However, despite the fact that Industry 4.0 technologies are likely to determine which companies will be frontrunners in the long term, many companies today are not even in the race.
A recent global survey conducted by Deloitte found that only 25% of A&D companies are using these technologies and tools to access, manage, analyze and make use of data from their digital assets to inform decision-making in real time, even though 84% of A&D executives say they consider leveraging new digital technologies to be key to market differentiation. For most companies, ambition and effort are not in alignment.
Instead of making Industry 4.0 a priority across the board, many organizations have taken a tentative approach, investing in specific, focused technology implementations. They have experimented with incorporating Industry 4.0 technologies in areas such as manufacturing and the supply chain, but they have been slow to adopt digital transformation initiatives that span the entire enterprise. While this might look like progress, the problem is that piecemeal implementation will likely not deliver the comprehensive transformation that will differentiate competitive aerospace and defense companies.
It is potentially only through understanding and harnessing the power of new technologies and business models across the organization that companies can make substantive progress. While some companies are sitting on the fence, others are seeing the transformative effects of these technologies. They are exploring significant potential value across a variety of dimensions, from cutting costs and restructuring supply chains to expediting time to delivery and connecting devices and products.
A look at industry reveals that designing new products and business models remains a concern for many. Forty percent of A&D executives say establishing new business or delivery models is their organization’s top challenge as they pursue digital transformation initiatives. As companies take this step, it is important that they keep an eye on the end game. Leveraging intelligent assets to create new products and platforms and increase customer engagement typically fuels competitiveness by decreasing design-to-production times, reducing life-cycle costs and delivering “smart” products to extend customer value.
Industry executives should strongly consider changing the way they think about implementing and making the most of these technologies. It is generally through a holistic, enterprise-wide approach that they can capture all the advantages Industry 4.0 has to offer and drive long-term growth, innovation, productivity and efficiency.
The ability to take advantage of innovative, game-changing technologies is a matter of survival in the increasingly “disrupt or be disrupted” aerospace and defense industry. To achieve success, top leadership, workforce and investments should align on digital transformation. Companies that fail to make this move soon risk falling behind in growth, profitability and market relevance.
Robin Lineberger leads Deloitte’s A&D industry practice, serves on the United Service Organizations board of governors and is very active in military veteran issues. The views expressed are not necessarily shared by Aviation Week.