Aerospace & Defense Industry Trends

  • 30 March 2016
  • CTND
Categories: Aerospace & Defense

View of the underside of an airplane

There is no doubt to be had that the Aerospace & Defense (A&D) industry is increasing in growth and demand as we make our way further into 2016. Although predictions are best estimations by nature, a wealth of global market opportunities for U.S. manufacturers points to the notion that the industry is, by all means, continuing to take flight. Three trends that clearly outline this increase in demand and growth include: the current airline backlog, increased defense spending worldwide, and the consolidation of supply bases by large original equipment manufacturers. In further detail:

  1. The airline order backlog for planes is currently at a historical high as fleets begin to age out of operation and the demand for new planes increases.
  2. Defense spending is experiencing steady growth as new land, sea, and air systems are commissioned.
  3. The configuration of large and small manufacturers is changing to a tiered system to help organize a growing output and assist manufacturers in their reduction of cost and time-to-market.

This sustained demand is challenging manufacturers to step up, and the innovations we’re seeing this year can be credited to the industry’s overall efforts to improve operations and commit to digital transformations that are touching on three major areas: cost-effectiveness, sustainable growth, and customer-centricity.

1.      Cost-Effectiveness

According to the International Data Corporation, innovation is the name of the game and the “transform or die” mantra is challenging the manufacturing industry as a whole to step up to the plate. And as worldwide manufacturers spend upwards of $323B on external IT, we’re witnessing investments that prove the ball is in play.

Although they require an immediate out-of-pocket expense, technology investments are beginning to produce the analytics necessary to help A&D manufacturers innovate on-the-fly. The improvement in responsiveness and productivity paired with the ability to change products and pricing at a moment’s notice will help manufacturers lower their costs and maintain forward momentum.

2.      Customer-Centricity

Switching to this customer-centric model means that manufacturers are better able to increase their responsiveness to customer’s immediate requests. In order to do so, the industries of technology and A&D are transforming their operations and leaning on enterprise resource planning software to get them there. This transformation improves productivity, increases quality, streamlines the manufacturing process, and helps manufacturers better respond to swiftly changing customer demands. Those that manage to transform their processes effectively by leveraging customer-centric technology are estimated to gain a market share growth of 2-3 percent.

3.      Sustainable Growth

As A&D demands continue to grow, internal operations are beginning to upgrade their technologies and harness new emerging solutions to further optimize their procedures. This means that manufacturers are finding new ways to innovate quickly in a changing market. Part of maintaining sustainable growth is ensuring that standards are adhered to, and as standards begin to become global requirements, these operations must also ensure their data is accessible and not tucked away in data silos. By switching to cloud-based systems, manufacturers are quickly evolving their processes to keep on top of new business requirements, remain in compliance, and eliminate downtime and a lack of communication.

All signs point towards global market opportunities for the A&D industry increasing with a sustained demand and continued growth far into the future. The apparent innovations required to support this increase are driving the recent digital transformations within the A&D industry. Enterprise resource planning software paired with a customer-centric shift, a sustainable growth model, and on-the-fly adjustments that can increase cost effectiveness will keep the industry trending upward in the coming years. This technology shift will begin to produce valuable results from big data analytics, better business models, greater reliance on technologies that increase efficiencies, and better customer relationships.

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