Our latest A&D Management Issues Radar reveals the results of yet another exclusive survey: executive level thinking on the future of the industry.
Aerospace & Defense
Ready for Takeoff
Aerospace and defense markets offer attractive growth perspectives; they are also undergoing fundamental changes. Emerging markets and disruptive business models are gaining in importance while competition and cost pressure are increasing. These trends are forcing OEMs and key technology suppliers to rethink their business models, revisit their talent and competence management strategies, review their product portfolio, adjust their global footprint, streamline operations, and improve cost structures.
Our aerospace and defense team serves the civil aeronautics, space, defense, and security industries. We advise renowned OEMs and their suppliers, agencies, and investors along the entire value chain – global, strategic and operational solutions from design and production, all the way to service.
We help our clients identify and exploit new sources of growth and efficiency, delivering deep industry expertise and cutting edge strategic advice as well as sustainable improvements. We also support them in structuring and managing large programs as well as major transformation initiatives, taking full advantage of digital technologies and mindsets.
The civil aircraft manufacturing industry is facing multiple challenges: rate increases, the industrialization of manufacturing and the supply chain, program management and engineering excellence, product and market strategy, and geographic expansion, to name just a few. New players from emerging markets are entering the establishment while traditional players are shifting positions on the value chain.
At Roland Berger, we work at the heart of the industry's core processes: program management, engineering, manufacturing and supply chain, as well as support and service. Our teams deliver concrete, measurable results and have a strong track record of achieving significant improvement in both program costs and schedules.
The barriers to market entry in the space sector are high: many programs are either government owned or heavily subsidized, for example the "Ariane" launcher or the European satellite program "Galileo". Public budgets are decreasing. US player SpaceX has enjoyed substantial success in recent years, although the journey has not been entirely smooth. Industry structure and business models are being re-shaped, and legacy players need to radically re-invent themselves to keep up with the pace of change and remain competitive.
We help to create step change improvement in terms of both speed and impact. Based on our project experience, we understand that innovation power and a disruptive mindset are key factors for success in the new space world. We support our clients in challenging their company culture and provide them with practical support on their digital transformation journey. As a result, we can help to open up new markets while significantly improving competitiveness.
Military budgets are expected to grow in response to many international crises. The paradigms, however, are changing quickly and radically. In mature markets, new relationships and ways of interacting between governmental customers and the defense industries are being defined. Emerging markets are striving to establish local defense industries and are mobilizing players from other industries.
These trends are leading many OEMs and suppliers of key technologies to redesign their business models so that they can protect their market shares while capturing growth potential in Asia, MENA, and Latin America. At the same time, players are diversifying into service business models and non-military markets such as homeland security and civil applications.
We help clients in military aircraft, land, and naval systems across the globe to mastermind and implement necessary transformations by revisiting their strategy, reviewing their organizational setup, honing their sales and marketing approach, and improving the cost structures of their products. This undertaking often requires radical rethinking of their commercial and industrial footprint.
With a wide range of both physical and cyber threats posed by terrorism, espionage, and migratory pressure, the security industry has shown strong growth that is set to continue in the years to come. Public safety is a key enabler for economic growth and stability, and is fundamental to quality of life in modern, open societies. Security systems protect military facilities and help safeguard critical infrastructures like power facilities, harbors, shipping lines, banks, R&D facilities, and production sites. It has also become a key issue at the board level in most industrial companies.
Our experts support clients in identifying and fitting growth opportunities, and then help them transform these into profitable business. At the same time, we support corporate leaders in reviewing their companies' security architecture and implementing required changes in governance and organization.
The aerospace aftermarket is undergoing fundamental change – the proportion of old, maintenance-intensive aircraft in service is declining, the intervals between maintenance checks on aircraft are increasing, OEMs are extending their control via long-term maintenance contracts, and new, non-traditional suppliers are dismantling old aircraft and offering the spare parts for sale. At the same time, operators are pushing for reduced costs and more reliability, whilst first generation service contracts look increasingly dated.
Roland Berger assists OEMs and suppliers to address these challenges to the traditional aerospace business model through strategically re-orientating their businesses and improving operational efficiency. We partner with airlines and other operators to reduce maintenance costs, and we work in MRO at the interface between operators and OEMs to develop solutions that suit all parties.
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