Manufacturers are a vital cog in the aerospace & defence (A&D) ecosystem. But failure to react to changing market climates, modernise business processes and meet ever-moving security requirements can mean being left behind. Their enterprise software can act either as a transformative enabler or leave A&D manufacturers hamstrung and unable to move forward.
The market pressures from the COVID-19 crisis are decimating supply and demand and spawning regulatory mandates. All too often, companies find opportunities hampered by their legacy software systems that have become a business progress bottleneck, or a software supplier who wants them to follow a particular development route.In a recent Accenture survey of CIOs undertaken in the UK, 53 per cent said that their current Enterprise Resource Planning (ERP) system was inflexible and that they wanted to extend it using intelligent technology.
With this in mind, I outline here the four key ERP ‘stress tests’ A&D manufacturers should keep top of mind when transforming their business operations.
A&D manufacturing business transformation checklist
1. Industry-specificity and configuration control is vital
Enterprise software just cannot be all things to all people. The baseline ERP functionality delivered by large incumbent providers – who develop a single platform to appeal to as many industries as possible – may well be good for operations such as finance, HR and payroll. But running aerospace and defence manufacturing operations is not the same as managing a retail business.
Far too regularly, A&D manufacturers set out on an implementation strategy and find that costly, complex and confusing customisations must be made to their software infrastructure to accommodate critical A&D manufacturing processes. A&D manufacturers need to be confident their underlying systems infrastructure supports the specific business needs of their industry now and into the future—not have to dance to the tune of their software supplier.
Many ERP vendors are also pushing their customers to the cloud as a prerequisite. But A&D manufacturers are involved in a sensitive supply chain, where they must prove compliance with strict military security requirements. Tech-Clarity found that two-thirds of A&D companies highlighted cloud security as a “significant risk”.
2. Connect operations – from the factory floor into the field
A&D manufacturers are behind some of their peers on the Industry 4.0 curve. During a recent webinar, IFS asked 140 A&D decision makers to respond to a number of polling questions. Only 20 per cent of participants were actively looking to leverage 4.0 technology.
Small wonder. If you look under the hood of many ERP suites, you will find multiple software products are comprised of disparate applications, developed separately and lashed together with a common user interface. No software can exchange data with every sensor, and those A&D manufacturing organisations with inflexible deployments will need to customise and add to their existing implementation in order to gather information from every available sensor.
Smart factories and intelligent assets deployed in the field will generate many terabytes of data. Simply extracting this data – let alone mining it to truly inform business decisions and better take advantage of aftermarket service revenue – is something A&D manufacturing is still trying to master. This can be avoided by deploying industry-specific manufacturing ERP software built on API-driven architecture.
3. Intelligent decision making means no silos allowed
Once data is introduced into a supporting enterprise solution half the battle is won, but to ensure victory the next stage means analysing that information to gain insights into operational and business performance. A&D Manufacturers are moving data analytics from a tool for observation to a tool for optimisation, from proactive to predictive intelligence and to help meet the demands of rapid industry changes. But this is moot if data exists in a heavily customised and fragmented enterprise software implementation.
Intelligent enterprise software should bring together solutions that visualise information to support decision making at both strategic and tactical levels, providing insight and context when and where it is needed. This includes integration with other programmes vital to A&D manufacturing.
4. Security at a level most other businesses would not require
Being an A&D manufacturer means meeting more stringent security needs than any other industry sector. This security sophistication applies not only to the physical products A&D manufacturers deliver, but also their digital presence. Witness the security mandates required by defence operators, such as the International Traffic in Arms Regulations (ITAR) and the newly released U.S. DoD Cybersecurity Maturity Model Certification (CMMC) Version 1.0.
The US Government explains that “the CMMC is intended to serve as a verification mechanism to ensure appropriate levels of cybersecurity practices and processes are in place to ensure basic cyber hygiene as well as protect controlled unclassified information (CUI) that resides on the Department’s industry partners’ networks.” Failing to adhere means A&D manufacturers are shut out of valuable military RFPs and bid situations.
Enterprise software plays a key role in meeting digital security requirements—and it’s here where ‘one-size-fits-all’ ERP systems do not contain the industry-specificity to keep A&D manufacturers compliant.
It will become more and more important to ensure any ERP solution used for A&D manufacturing has functionality specifically designed for export control and cybersecurity regulations. A business dealing in regulated materials or involved in sensitive military contracts must be able to quickly and efficiently marshal this information from within their ERP system and combine it with external regulatory data to ensure compliance as they process orders, share information and conduct other transactions. They also must be able to share it with overseas partner companies in a frictionless environment.
Enterprise software as a strategic enabler
We’re rowing in unchartered global waters in 2020, where opportunities for new business, the challenge of embracing new technologies and the sudden emergence of disruptive market forces are all happening at the same time. Success today will depend on an A&D manufacturing organisation’s ability to be agile in their operations and flex their business models—those who can’t adapt just won’t make the cut.