Farnborough Air Show

Accenture believes aerospace has lots of room to improve

 - July 12, 2008, 4:30 AM

In these times of high fuel prices, currency worries and looming recession, it is worth taking a hard look at how the efficiency of the supply chain can be improved. It doesn’t take long to discover that despite all the hyperbole and rhetoric over the past decade from consultants and IT “solution providers,” many in the aerospace industry feel they’re not getting the return on investment they expected.

In a report issued last year titled “It’s never too late to profit from Enterprise Systems,” global consulting firm Accenture suggested that companies often neglect to factor in business strategy when putting an enterprise system in place. They may get systems working to keep the business operating, but they need to transform transaction-level data into action-oriented metrics that enable management decisions. “The ability to change ahead of the curve before that change is an imperative key trait of high-performance businesses,” said Accenture’s report.

On the eve of the Farnborough airshow, Damien Lasou, global managing director of Accenture’s aerospace & defense business, told AIN, “It’s very clear that people are interested in being more efficient. It is important to interact between companies, but we have to accept the fact that the supply chain hasn’t been working as expected–for example, the 787 and A380 experiences–and that inefficiency is more visible when the industry is not booming.”

Lasou said the proliferation of “total support” contracts represents a “new business model” with incentive to improve efficiency shifting to the provider. This is where Accenture can help, added Lasou. “We are working with most of the top OEMs on things like supply chain optimization.”

Much can be learned from military initiatives, suggested Lasou. “In the U.S. the military is much more advanced in terms of performance-based contracting, representing some 75 percent of contracts awarded,” he said. “The UK is the leader in Europe, but it is emerging in France and Germany, too. The question is does Europe want to go where the U.S. has gone–where the supplier delivers the part straight to the point of use. There is a potential impact on how armed forces are structured–[contracting out] saves money but they want to manage that risk while also maximizing availability.”