How the Berlin AirShow 2016 has set trends towards digitalization of the supply chain

Three, two, one, lift off:

The Berlin Airshow (ILA) took off on Wednesday 1st of June at 9.30 with an introductory speech of Volker Thum, Head of BDLI, who highlighted the important role of a strong supplier network for a successful Aerospace Industry. He stressed the effort which is required to maintain the high level of technology innovation.

Brigitte Zypries, Parliamentary State Secretary at the Federal Ministry for Economic Affairs and Energy, was second on the stage. Her key message to the audience was: “Offering state of the art is not enough!” Suppliers need to support aircraft manufacturers with their innovative power when working on new aircraft generations.

Dr. Klaus Richter, Head of Procurement at Airbus Group, pointed out the necessity of a strong supply chain at all levels of the production network as well as the need for an increase of the supplier performance..

Responsibilities shifting downstream the supply chain

After the opening, the results of a study regarding the German aerospace industry were presented. The study reflects the trends and main characteristic of a network that represents more than 2.300 companies, 100.000 employees and annual turnover of 30 billion Euro.

One of the results highlights that the responsibilities from OEM’s and Tier-1 suppliers are increasingly shifting into the downstream supply chain. Another key finding was the fact that German suppliers see the need for structural transformation to tackle future challenges like new business models, internationalization and cooperation.

AirSupply as first step towards Industry 4.0

Later in the afternoon, the supplier collaboration portal SupplyOn had the opportunity to present the value of its collaboration hub in an interactive role play with its partner BoostAeroSpace. SupplyOn´s AirSupply solution is a pragmatic first step towards Industry 4.0 – one of the trend topics on the ILA.

Arvid Holzwarth, Consulting Manager at SupplyOn, and Marie-Noelle Lepers, AirSupply Product Manager at BoostAeroSpace, worked out which day-to-day worries aerospace suppliers face when it comes to operative procurement. They looked at how the AirSupply industry solution supports suppliers in their daily business and can help them to take the first steps towards the digitalization of the supply chain.

After all, SupplyOn is a vertical industrial network with over 20,000 business partners and SupplyOn’s “AirSupply” sector solution features efficient supplier collaboration including an early-warning system for critical supply situations, high security standards, user-friendliness and the future-proof design of an industry solution.

Digitalization of the Supply Chain

The second day of the ILA started with a business breakfast organized by the consulting company Roland Berger, gathering in the panel Dr. Matthew Ganz (Boeing), Mario Heinen (Airbus), Heiko Lütjens (LIEBHERR Aerospace) and Dr. Rainer Martens (MTU Aero Engines). They discussed “the Digitalization of the Aerospace Supply Chain”, also considering the impact of the Internet of Things, how to capitalize on it and what the projects and expectations of the “Industry 4.0” are. Unfortunately the outcomes of the discussion cannot be shared as there were only reserved to the participants, and our source was not able to disclose more information.

Supply Chain Excellence Initiative – Information flow before material flow

One highlight of the third day was the 2-hour conference of the Supply Chain Excellence Initiative to support the competitiveness of the German Aerospace Industry in general and medium sized companies in particular.

One of the main topics that were discussed was how to optimize the information flow within the Supply Chain – from the OEM down to the supplier of raw material. The optimization of this information flow is considered essential for the future success of SMEs (small and medium enterprises).

In this context a new Aerospace survey was circulated, conducted by Stegkemper GmbH in cooperation with SupplyOn GmbH and the SCE initiative (supply chain excellence, supported by clusters like BDLI and bavAIRia): In a nutshell, the survey makes clear that without digitization of complex supply chains it will become more and more difficult for Aerospace companies to stay competitive.

The study shows that such a holistic digitization of the supply chain can only work with innovative standardized processes and collaborative IT tools.

Challenges ahead for the supplier network

In an interview on the radio information channel B5 on the third day of the ILA, Peter Schwarz, Managing Director of the Aerospace cluster bavAIRia, pointed out that German Aerospace suppliers, among them many Bavarian companies, need to handle the challenge of increasing volumes. As an example he mentioned the A320 program of now up to 60 aircraft per month!

Once again, also the ILA 2016 was the “place to be” where aerospace companies from more than 40 countries exhibit and approximately 120.000 business visitors were able the have access to firsthand information from the industry, a large number of business meetings have taken place and the noise generated by the aircraft and helicopters during the demonstrations were there to remind us of being part of an important industry: the Aerospace family!