ISG Provider Lens™ Engineering - Service Partners - Germany 2019-20 - Aerospace – Product Engineering
Automotive Product Engineering
The service provider fraternity has observed a significant demand for services and solutions that are aimed at high-valued RFPs in Germany over the last few years. The region has been historically a closed economy with respect to providers from the rest of the world and preferred to keep outsourcing within its boundaries.
There is an appetite for end-to-end contracts where service providers have to take ownership. For e.g., the requirement for an infotainment system would have the provider responsible for getting the system, partnering with tier 1 suppliers, managing the verification and validation (V&V) testing and so on.
The foundational technologies are undergoing a paradigm shift towards digital, with a complete amalgamation of innovations related to software-defined networks (SDN) and network function virtualization (NFV), 5G, artificial intelligence (AI), Internet of Things (IoT) and more. Automotive development is no longer only about energy generation or conversion; manufacturers are expecting support for finding innovative ways of integrating the energy, the manner in which it will be given back to the grid and vice versa (V2G and G2V), i.e. getting the energy from the grid during running the vehicle and selling back the energy to the grid during non-peak times, thus generating a zero-energy model.
With new functional safety requirements and vehicle engineering changes, new vulnerabilities are emerging. As automotive development is increasingly becoming software defined, it is vulnerable to cyberattacks as the software is usually upgraded through the cloud. In response, service providers are investing in cybersecurity centers of excellence (CoEs) to mitigate the risks.
Service providers are trying to move away from labor arbitrage as their main value proposition, making the shift an industry phenomenon. They are developing multipronged strategies that include augmenting or replacing standard business models such as timeand-material (T&M) rate structures with outcome-based pricing and an ownership level that shifts more risks and rewards to the provider.
Automotive Manufacturing Engineering
Service providers are mainly directing their expertise in four functions: making products smart (when the products are designed); enabling smart operations such as by integrating IoT or Industry 4.0 and the related Industrial IoT (IIoT) wave of transformation; providing smart services such as software over the air; and shifting from predictive to preventive maintenance. Although this line can be drawn horizontally, predominantly it is a circular development effort because the demand for smart services is feeding the requirement to make products and processes smarter and more integrated.
Product lifecycle management (PLM) is now seen as a functional package comprising application lifecycle management (ALM), service lifecycle management (SLM) and PLM. The package approach is favored because none of the manufacturers want a separate PLM, and service providers are developing solutions that integrate all three platforms as a product suite.
Mechanical engineering functions have evolved into defect management from simple testing. Hence, after testing, many defects are being identified and directed into the defect management system. These data points are analyzed and simulated to investigate the appropriate countermeasures for these effects.
Enterprises are seeking the support of service providers to create a central nerve center that would command all their manufacturing plants across the globe. However, there are challenges in managing and monitoring critical KPIs and other parameters across the facilities. Service providers are trying to gather data from all these plants and integrating it with the supply chain functionalities. The critical KPIs are monitored from a dashboard in a central location.
Aerospace Product Engineering
Some of the world’s biggest airframers and Tier 1s had the moxie to structure an insourcing strategy by assigning functions to offshore and nearshore captive centers instead of service providers. These initiatives have resulted in significant losses for the primes, and they are now turning towards service providers with more turnkey capabilities.
Typically, European aerospace stakeholders are seeing value in outsourcing engagements that cannot be carried out by their own captives. To address these turnkey requirements, they are seeking service providers that have more skin in the game and can survive the financial blow during a downturn. Aerospace enterprises are also increasingly looking for service providers with end-to-end capabilities ranging from development to deployment and maintenance.
Simulation and training technology has evolved multifold over the last decade, with significant changes taking place across electronics, communication systems and avionics. Futuristic concepts such as urban air mobility (UAM) and regional mobility, combined with electric propulsion and autonomous systems, open new dimensions for the simulation and training vendors. They create parallel opportunities for the service provider fraternity to bid for engagements in the design, testing, certification and integration of motors, cameras, radar and embedded software service lines.
With the increase in traditional threats, cyber resilience should get more sophisticated to counter the vulnerabilities. Digital technologies along with in-flight connectivity exposes an airborne jetliner to numerous threats. Service providers should thus increase their focus on aerospace-oriented cybersecurity programs.
Aerospace Manufacturing Engineering
Linking all design centers in a digital thread to create a digital twin has been an area of high interest for most service providers. Such activities enable companies to support tasks such as holistic ratification for converting a passenger jet to a cargo plane.
The aerospace industry’s industrial and manufacturing infrastructure will have more machines connected to IoT networks, including parts with a unique ID that can be scanned to give all the necessary information to people or systems. With the aid of digital visualization technologies and other attributes such as chemical composition, the parts manufacturing business will be made more fluid to minimize emergency recalls and aircraft grounding.
If component manufacturers can improve their ability to receive feedback from MRO reports, they can identify defects more quickly and potentially avoid an entire batch recall. Real-time feedback enables a better analysis of the circumstances for a specific part so action can be taken to improve its durability and longevity. Providers are trying to develop such end-to-end capabilities but have only solved parts of the problem.
MROs have been facing challenges with lessors putting restrictions on parts manual approval (PMA) integrations over concerns on safety and value reduction. They are depending on technologies to address these challenges. For e.g., computer-aided automated diagnostic systems are being used to detect material damage much earlier, and robot-based repairs are being made on composite parts to minimize the aircraft-onground (AOG) period. These expensive technologies can bar the entry of smaller players and compel them to seek engaging designated engineering representatives (DERs) for repairs. However, DER repairs are usually engaged in regions such as Germany, where labor cost is relatively high and often exceeds the component cost. Thus, the limitations in PMA integrations and conventional DER options are pushing operators to consider outsourcing functions for cost advantage.