Digital Transformation Takes Flight in the Aerospace Industry

January, 2020

RRengine - Digital Transformation Takes Flight in the Aerospace IndustryWhen it comes to digital transformation, it’s easy to dismiss the aerospace industry as a world of bureaucracy, regulation, and gray metal desks. But, in fact, this asset-intense sector is becoming a showcase for the internet of things (IoT), big data, and virtual collaboration between suppliers and customers.

Two players that illustrate the art of the possible in the aerospace industry are Rolls Royce and IFS.

IFS, a global ERP and asset-management systems provider, recently announced that jet engine maker Rolls Royce has chosen IFS’s Maintenix solution for exchanging engine data with airlines that operate Rolls Royce Trent engines.

The IFS Maintenix solution features an Aviation Analytics capability, which enables the automated provision of field data. This allows Rolls Royce to receive timely and accurate information, and the Maintenix solution then acts as a gateway to automatically push maintenance program changes and other data from Rolls Royce back to the airline.

As a result, Rolls Royce is able to offer a systematic method of exchanging and accurately updating airline engine life data to optimize the interval between engines being removed and sent for overhaul. This data exchange provides new streams of data for Rolls Royce to analyze the performance of fleets with Trent engines and refine the aftermarket offerings it can provide its customers, from service-based contracts to analytics insights and more.

Lessons for Old School Manufacturers and Traditional ERP Players

This story is not just about Rolls Royce. The lessons here apply broadly to a variety of aerospace companies, defense manufacturers, auto makers, and other asset-intense companies. Rolls Royce has done a remarkable job, moving from just selling products to leveraging and even selling data. It is a case study for what is possible for other old-school manufacturing firms.  

As for IFS, the partnership also has many implications. It is another sign that this long-standing ERP provider is moving beyond just supporting the back office, beyond just an accounting system, inventory management system, or even a field service system. IFS is now directly supporting Rolls Royce in the revenue side of the business.

The one-stop-shop approach that IFS offers is also noteworthy. For instance, there are certainly many standalone, niche IoT solutions. But the customer then needs to integrate all that IoT data with an ERP system. For example, customer master data, vendor data, parts data, and even transactional data such as service tickets, parts consumption, and maintenance scheduling. If IFS can provide an already-integrated solution, that’s certainly an advantage.

Why is IFS, which lacks the name recognition of the biggest ERP and asset-management players, suited for this task? At its recent user conference in Boston, Scott Helmer, president of IFS’s Aerospace and Defense Business Unit, explained.

“[Aerospace] is an asset intensive industry. It’s characterized by a very connected network of organizations, be they manufacturers, operators, part suppliers, or just maintainers. They stay connected throughout the asset life cycle in its entirety. IFS has a portfolio of capability that underpins the critical business processes of those organizations that enables us to be the digital thread to continue the connection of those organizations throughout that asset life cycle.”

Helmer called the collaboration with Rolls Royce, “a new level of collaboration around innovation that hasn’t been seen before … This strategically important deal offers further proof that IFS Maintenix can help aviation organizations maximize the revenue potential of their assets through standard, lean, and predictable maintenance.”

Moving Beyond Products to Services

Nick Ward, head of production management for digital services at Rolls Royce, said in an interview that his company has been in a long process of expanding its service offerings, well beyond its long history of making huge engines.

“About 20 years ago, Rolls Royce became a services company. So traditionally, we build big engines. But we created a services business called TotalCare. And under TotalCare, we take the risk of cost uncertainty around maintenance on engines away from the airline and onto Rolls-Royce. So it’s kind of a risk transfer business.”

The move has been successful and has “revolutionized Rolls Royce,” Ward said. Its market share was around 5% of the wide-body market when Rolls Royce started its service business. It’s now approaching 50%, he said. He believes the industry is at a tipping point:

“[To be successful] we have to understand the risk. So we have to be really good at forecasting risk. And we can only forecast if we have data and digital capability. So that service business was really the reason we got heavily into data as a company and we got into digital. Over the 20 years, we’ve obviously refined and gotten better and better at doing that. We’re at a stage now … I think there’s almost a tipping point in the industry where the digital technologies have come together–cloud, IoT, big data, digital twins. And all these things are almost all maturing at a similar point where we can go again and make another step-change in our business model.”

A Rich Set of Big Data

Once the ability to exchange data has been established, there is no limit to the type of data than can be shared between Rolls Royce and the airlines.

“It’s largely data that comes from the engine,” Ward said. “Performance data, continuous records of pressures, temperatures, shaft speeds, vibrations—all that kind of stuff. And it’s data that comes from the airline engineering or maintenance function. So if there was a delay, what was the cause? If there was a maintenance intervention, what happened? And that becomes our data thread. And then we return back to the airline things like updated component lives, which justifies keeping the engines on the wing longer, earning revenue for the airline longer.”

This is strategically and financially important data, if it is prioritized and used it correctly—which is a challenge, because there is so much data. An engine in flight produces terabytes of performance data. Nevertheless, this new partnership is not aimed at making more money for Rolls Royce, Ward said.

“So, I think, within this is absolutely key, that everybody within this transaction recognizes this is not a revenue opportunity for Rolls Royce. This is a cashless transaction because there’s a lot of sensitivity. The data belongs to the airline, right? So you have to be very clear and open that data is driving Rolls Royce to make internal improvements, so we will save a little bit on our bottom line of delivering the services they’ve already bought, in order to get better outcomes of those services. They’ve already bought the service, we’re making it better.”

Once again, the ways in which Rolls Royce shares data with its airline customers should be a model for other companies. Rolls Royce argues that industries are going to move forward by sharing more and more data, using collaborative data marketplaces. “We believe, as a market, collaboration on data has got to be the way forward,” Ward said.

A Variety of Solutions and Approaches

Robust data sharing in the aviation industry is vital if it is to continue raising the level of safety. The partnership between Rolls Royce and IFS is a step in the right direction. It joins other major players in this arena. For example, GE’s cloud-based Predix platform allows third-party maintenance and repair operators to download predictive analytical data via the internet and share it with customers. Airbus offers a similar data service called Skywise.

And technology providers as well as system integrators are eager to support these and other programs in the aerospace industry. At this point, there is room for a variety of solutions as manufacturers, airlines, and service providers are learning how best to realize the benefits of data sharing.