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Opinion

Resolving the perils of personalization

Opinion WritersBy Opinion WritersJuly 31, 20156 Mins Read
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Our culture of technology and personalization has carried into the airplane cabin as a way for airlines to compete for customers. In-flight entertainment (IFE) systems allow the passenger to watch satellite television on their own 24in monitor. Wi-fi gives them access to games and movies through their own devices. Premium class seats have become small living spaces, with desks, lie-flat beds, power outlets and mood lighting; some offer self-serve kitchenettes and bars.

This customization is coming at a very busy time. Market forecasts indicate that airlines will need more than 35,000 airplanes over the next 20 years; however, the backlog for a new plane is averaging three to five years, and manufacturers currently have the capacity to deliver only half of these requirements.

This customization is also a primary cause of longer aircraft backlogs, and at times, delayed deliveries.

Airframe manufacturers have leaned out their assembly lines and significantly accelerated delivery rates; it now takes 12 to 24 months to assemble an airplane. Cycle times for interior suppliers haven’t kept pace. Interior components have the longest lead items in the overall airplane manufacturing process.

The procurement process for major interior components is also about 12-24 months, and this is before custom designs are requested and defined by the airline that wants them. In theory, interior components would need to be ordered prior to the airline’s decision to buy a plane if the airframe manufacturer was to keep their schedule.

In reality, the interior component suppliers are behind schedule from day one – and they often don’t catch up – meaning the airline doesn’t get its plane when it wants it.

How do we get out of this mess?

The solution comes down to each of the three players – the airlines that buy aircraft, the airframe manufacturers that assemble them, and the interior component suppliers – working together in a new form of collaboration in three primary areas.

Nurture new capacity

Creating more capacity will relieve the supply chain and free-up suppliers to better manage increasing project capacity, all while meeting delivery schedules and providing the innovation that the airlines and passengers are looking for.

The best way to nurture new capacity is to work with suppliers currently focused on the retrofit aftermarket. These are highly capable companies that consider the qualifications and testing processes involved in the production market overwhelming or not worth the effort to learn. Mentoring these companies to meet the airframe manufacturers’ requirements would create a new pipeline for the production market.

Airframe manufacturers send large teams of utility managers and engineers around the world to ensure products for their aircraft are on schedule; these same experts have the skills to grow new suppliers. A mentoring program that combines design and production support with documenting test plans and developing a network of testing companies can go a long way to enabling new suppliers. Supplier management organizations can think of this as succession planning for their supply chain.

Concentrate on what customers actually care about

Understanding that the flying passenger is typically more concerned with functionality and reliability than aesthetics will help airlines avoid significant but largely unnecessary change fees for specialized designs, while focusing their resources on the customizations that count the most.

A well-known airline decided to design a custom reading light for its first class seats. The supplier knew it was a high risk project, so they drastically increased the quote, but the airline believed it was a necessary feature. The marketing team agreed to the quote, and ending up with a reading light that cost US$15,000 per unit and which delayed delivery of an entire fleet of aircraft.

Airlines appreciate standardization on the technical aspects of the airframe, but many consider the interior cabin to be a differentiating factor in their service. The organizations responsible for fleet acquisition must work together as a team to blend what the passenger values and what the suppliers are capable of implementing within the timeframe of a program. A detailed customer survey would likely have shown that the passenger probably just wanted their reading light to work.

Building early collaborative partnerships

Giving airlines a better selection of off-the-shelf innovations to choose from during the procurement process will help suppliers reduce their lead times and risk, but this can only be done through partnerships. For example, a galley manufacturer could partner with a refrigerator supplier to create a self-serve kitchen better designed for passengers to use. Manufacturers that invest in these collaborative innovations can truly move the needle with new offerings, while providing overall solutions to airlines.

There are already success stories. In one case, partners came together to develop a standardized integrated IFE system embedded in a slim-line passenger seat outside of the existing airplane cycle time, providing innovation to the airline customer without the cost and burden of requiring their deep involvement in the process. These plug-and-play seats have eliminated the need for many airline design decisions and 24 months of program management activities.

Today, cabin suppliers tend to spend much of their lead time developing custom products after an order is placed. Historically, collaboration between suppliers that have complementary products has be limited, largely due to concerns of spending R&D time and budget on products that may not find a market, and intellectual property issues. Those are real barriers that need to be overcome, but innovation and collaboration are solid strategies to stay ahead of competitors and satisfy customers.

The peril of personalization is a problem that airlines, airframe manufacturers and the interior supply chain need to address together if they want to meet industry growth and capacity needs. Each should proactively understand its role in this network of challenges and step up to the challenge of addressing them. Nurturing new capacity, focusing on what matters most, and creating innovative partnerships will gain customer recognition and ultimately build a stronger ecosystem for the entire industry.

Greg Sinn, an engagement manager at ARRYVE, advises companies on process engineering, operations excellence and program management. He has worked across the aerospace, aviation, rail and technology industries to unlock hidden value and drive implementation for industrial organizations. Greg can be contacted at gsinn@arryveconsulting.com

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