By Arsenin Rodriguez
Director, Business Consulting
Extended Solutions EMEA
New York, NY
As aerospace and defense companies turn to internal process improvement to combat current market pressures, enhanced decision making is gaining recognition for its role in strategic planning, forecasting and supporting responsive customer service. Enhanced decision-making is becoming an important weapon in the A&D manufacturer’s arsenal.
Although this industry has traditionally enjoyed a resilience to economic volatility, a recent slowdown in DoD spending is forcing A&D manufacturers and contractors to reevaluate their long-term growth strategies. The need to analyze projections, trim waste and make calculated purchasing decisions has hit—and hit right on target.
Survey findings published by IDC Manufacturing Insights in March 2012 indicate that market pressures are causing an increasing number of aerospace and defense companies to adopt a "shrink-to-grow" tactic for overcoming revenue shortfalls. Managers who were interviewed cited fluctuation in civil aviation orders, cuts in defense spending, tightening of energy regulations and increasing competition from emerging markets as common driving influences. These are just some of the contributing factors causing A&D companies to look inward for ways to improve the bottom line. Increasing business efficiency is the new priority, not only because of the immediate necessity but because it is smart for the long-term growth of the industry.
Enhancing decision making capabilities is one of the most effective ways for aerospace and defense companies to improve performance and profitability. Quick, convenient access to real-time data from integrated systems leads to a company culture that is analytical, results focused and places a priority on daily performance management. When data is tracked daily—even to the minute—problems can be identified at the operational level before they escalate into bottom-line disasters.
Pierfrancesco Manenti, IDC analyst, refers to this top-down decision making approach in his January Executive Brief, "Creating Real-Time Collaborative Decision-Making Environments," and calls for "an alignment between the highest level strategic decisions and the lowest level operational decisions." This alignment allows manufacturers to master complexity of doing business, he says, and allows them to "fully exploit all actual and potential information sources to achieve the highest possible level of visibility and intelligence along the value chain."
The need to analyze projections, trim waste
and make calculated purchasing decisions has
hit—and hit right on target.
Enhancing decision-making capabilities at multiple levels within the company certainly empowers employees to self-monitor productivity, performance standards and compliance with quality control regulations. It also speeds response time and allows for a more customer-centric approach to operational improvement. Personnel can make decisions based on the question "how will this action affect my customer?"
As aerospace and defense companies rely more heavily on value-added services, such as MRO services, for revenue, this customer-focused mind set is more and more important. Responsive service breeds long-term loyalty and a collaborative environment. A&D companies can communicate and share data with customers, leading to innovation breakthroughs.
No wonder decision making has taken on a new urgency and relevance for the A&D industry. Contextual information is gaining in significance—and merit. "The ubiquitous data collection and data sharing paradigm will be enabled by the evolution of the IT architectures toward new technologies such as mobility, cloud computing and social networking," says Manenti.
Mobile solutions have certainly made drastic changes in the way companies access and process data used in decision making—from making it accessible on the shop floor with wearable devices to providing consumer-grade ease of use through smart phones and tablets. Increasing ease of use and expanding access means that personnel throughout the organization can be empowered to make well-informed decisions and monitor role-based performance standards.
Decision-making tools can be used to trigger automatic escalations, alerts and mandatory response from personnel. While putting analytical capabilities in the hands of front-line workers enables top-down decision making, it also reinforces a certain amount of procedure control and adherence to operational standards. Escalation and alerts can be automated so that there is a technology-based back-up system to the employee who should be closely monitoring real-time data. Nothing is left to chance. In the highly regulated, high-asset industry of A&D, these safeguards to quality control are especially valuable.
Improving internal processes, particularly decision making, is the strategy that will take forward-thinking organizations—whether a manufacturer or contractor—further into the new realm of highly responsive, highly intuitive, and highly profitable A&D companies. ✈
This article was first published in the 2012 edition of Aerospace and Defense Manufacturing. For past yearbooks from ME Media, click here.