9AB0-00-46-00-00 Global Aerospace Maintenance, Repair, and Overhaul Internet of Things Market, 2016.pdf

9AB0-22 January 2017 Global Aerospace Maintenance,Repair,and Overhaul Internet of Things Market,2016 Global Aerospace&Defense Research Team at Frost&Sullivan Internet Protocol-based Software and Devices Offer Improved Functionality and Cost Control while Health Management Systems Usher Market toward a Truly Connected Flight and MRO Environment Licensed to User ID:34966University of TorontoUnauthorized Distribution Prohibited2 9AB0-22 Section Slide Number Executive Summary 3 Market Overview 6 The Information Issues 18 Software Solutions 23 IoT Devices 36 The IoT Horizon 43 The Last Word3 Big Predictions 45 The Frost&Sullivan Story 48 Contents Licensed to User ID:34966University of TorontoUnauthorized Distribution ProhibitedReturn to contents 3 9AB0-22 Executive Summary Licensed to User ID:34966University of TorontoUnauthorized Distribution Prohibited4 9AB0-22 The aerospace maintenance,repair,and overhaul(MRO)market,like many others,is in a state of change.The introduction of enhanced Internet protocol-based software and equipment,geared for the Internet of Things(IoT),is driving the market in new directions.Logistics to support MRO and spares sales is a significant part of the overall aerospace industry.New platform procurements will grow at a compound annual growth rate(CAGR)of 1.4%.o The MRO portion of the industry will grow at a CAGR of 1.6%and will present a 2026 market size of$88.17 billion globally.Over the 2016 to 2026 period,the global MRO revenue share from North America(NA)is forecast to decline from 27.5%to 24.6%,while Europe is expected to decline from 27.3%to 24.3%.Meanwhile,Asia-Pacific(APAC)is expected to grow from 28.4%to 31.1%of the total market.Latin America(LATAM)will grow from 4.9%to 5.1%and the Middle East and Africa(MEA)will grow from 11.9%to 14.9%.Improved software,mobile devices,and health management systems are moving the MRO market toward a truly connected environment.The first steps have been taken.The next steps will change the face of MRO.Key Findings Source:Frost&Sullivan Licensed to User ID:34966University of TorontoUnauthorized Distribution Prohibited5 9AB0-22 4 Many companies will transition major elements of their record keeping through automated systems as the actual services are outsourced.1 Replacement of ageing assets will drive the global market until 2018;after,it will be sustained by rising demand from Asia-Pacific.2 The main restraints for MRO IoT penetration in transitioning regions are a lack of infrastructure,skilled personnel shortages,and complex regulations.3 Newer companies with less experience will use Internet of Things(IoT)tools and outsourcing more readily than established companies.5 The Big Data revolution will affect MRO systems through the use of smartphones and tablets,and through automated notifications.CEOs Perspective Source:Frost&Sullivan Licensed to User ID:34966University of TorontoUnauthorized Distribution ProhibitedReturn to contents 6 9AB0-22 Market Overview Licensed to User ID:34966University of TorontoUnauthorized Distribution Prohibited7 9AB0-22 Aircraft MRO Airframe Repair&Overhaul Inspections Time Compliance Technical Order(TCTO)Repair Consumables Engine Repair&Overhaul Inspections TCTO Components and Consumables Overhaul Component Repair&Overhaul Repair Overhaul Consumables Line Maintenance Line Maintenance Consumables Aerospace MRO IoT Market:Segments and Subsegments,Global,2016 Note:The subsegments are not discussed in detail Market Activities Components Source:Frost&Sullivan Licensed to User ID:34966University of TorontoUnauthorized Distribution Prohibited8 9AB0-22 Aerospace MRO IoT Market:Participants and Activities,Global,2016 Supply Chain Position MRO Activities AOG Spares Overhauls Component MRO Spares Repairs Scheduling Engine MRO Support Organizations Engine Provider Component Provider Aircraft on Ground(AOG)MRO Operator In-house Material Provider EHMS In-house Parts Suppliers IVHMS In-house Parts Suppliers Component Providers IVHMS Aftermarket AOG Overhauls Time-change Items Airframe MRO Provider Parts Suppliers Component Providers In-house IVHMS Stage EHMS=Engine Health Management System;IVHMS=Integrated Vehicle Health Management System Market Scope Source:Frost&Sullivan Licensed to User ID:34966University of TorontoUnauthorized Distribution Prohibited9 9AB0-22 Market OverviewRegional Scope Source:Frost&Sullivan Licensed to User ID:34966University of TorontoUnauthorized Distribution Prohibited10 9AB0-22 This research covers 5 separate geographic regions:North America(NA);Latin America and Caribbean(LATAM);Europe,Middle East,and Africa(MEA);and the Asia-Pacific areas(APAC).The market segments include only maintenance,repair,and overhaul(MRO)actions.Other related segments are addressed in other research documents.This market is divided into heavy airframe MRO,engine MRO,component MRO,and line maintenance.These are not separately addressed.Adoption by activity and region is not unique.Market share is not provided,but primary suppliers are identified.Comments are made to identify selected secondary suppliers.Values are expressed in units or US dollars as appropriate.Negative numbers are shown in parenthesis().Scope Geographic Coverage Global Study Period 20162026 Base Year 2016 Forecast Period 20172026 Monetary Unit US dollars Note:The geographic regions are not covered in detail Market Definitions Source:Frost&Sullivan Licensed to User ID:34966University of TorontoUnauthorized Distribution Prohibited11 9AB0-22 The Internet of Things(IoT)is the pervasive use of enabled devices and software whereas the Industrial Internet of Things(IIoT)is loosely defined as Internet-based connectivity in the industrial environment.Specifically,it is the embedded Internet protocols and communications capabilities built into equipment and the software used to control processes.o This research focuses on using IoT connectivity to enable improved efficiencies in aircraft MRO.The entire aerospace value chain can be seen on slide 19.Toward that end,the IoT for aerospace has been broken into manufacturing,MRO,logistics,and on-board IoT.Each of these is covered in a separate piece of research.Market Definitions(continued)Source:Frost&Sullivan Licensed to User ID:34966University of TorontoUnauthorized Distribution Prohibited12 9AB0-22 Devices connected via cellular or other networks Generally point solutions Data rarely integrated with enterprise or consumer applications Focus on the plumbing aspects of embedded hardware and cellular networks Cloud computing Platform approach Support new business models such as product-as-a-service Security Big Data and Analytics Integrated with enterprise management Cloud deliverymakes IoT inherently more scalable and enables access by any sanctioned application Focus on software capabilities and application integration M2M IoT Frost&Sullivan has identified clear defining lines between the terms machine-to-machine(M2M)and the Internet of Things(IoT).M2M vs.IoT Common Core Remote access to devices,machine,and assets Devices&Connections An Ecosystem to Capture Data and Perform Analytics Source:Frost&Sullivan Distinguishing IoT and M2M Licensed to User ID:34966University of TorontoUnauthorized Distribution Prohibited13 9AB0-22 Integrated IoT and industry-specific tools can enhance MRO.CHIP/MODULES/SEMICONDUCTORS HARDWARE DEVICES CONNECTIVITY SERVICE ENABLEMENT PLATFORMS DATA STORAGE BIG DATA ANALYTICS DEVICE and NETWORK SECURITY APPLICATION DEVELOPMENT PLATFORMS IoT Ecosystem and Opportunities Aerospace Repairs and Overhauls Health Monitoring Systems Sensors and Semiconductors Maintenance Compliance Documentation Logistics and Asset Tracking/Monitoring MRO Market IoT Areas CLOUD COMPUTING INFORMATION MANAGEMENT Frost&Sullivans Strategic Approach to IoTA 360 Perspective of the IoT Landscape and Opportunities Source:Frost&Sullivan Licensed to User ID:34966University of TorontoUnauthorized Distribution Prohibited14 9AB0-22 The solutions available to improve the responsiveness of aerospace logistics using IoT cover a broad set of tools.Scheduling software and database-centric maintenance records have been important tools for operators and MRO providers for many years,but now the processes are becoming more automated.This allows triggers to be placed in the software that will start the next set of processes.Within a manufacturing location this can be very useful,but by taking it outside of the walls of the manufacturing facility it can create a new dynamic.It allows truly coordinated support within a company and within a supply chain.By extending that capability even further,it is possible to trigger events that occur within the logistics effort outside of a company.Potential IoT-enabled activities include material ordering,maintenance record updating,notification of customers,and cloud storage of maintenance data,costs,and activities.Enterprise resource planning(ERP)systems and stand-alone inventory software have been commonly used tools in every aerospace manufacturing company.Sadly,they are often overly complex,focused on accounting,and generally devoid of analytical tools that could be used to improve processes.They are often location dependent and certainly limited to a single company.Today,several companies offer maintenance software that leverages ERP systems and aircraft record systems to aid in the repair effort.Internet-enabled devices can significantly reduce the MRO information effort.Physical storage solutions can ease the pick-and-pull effort for humans and can enable automated pick-and-pull from inventory.When repairing an aircraft,tablets and wearable devices can present the mechanic with technical publications and inventory levels.Internet of Things Solutions Source:Frost&Sullivan Licensed to User ID:34966University of TorontoUnauthorized Distribution Prohibited15 9AB0-22 Internet of Things Program MRO Transformation CIO insight versus COO decision-maker perspectives Digital transformation/disruption enabled by IoT,cloud,Big Data,and connectivity Hot topic focus,including Blockchain,Artificial Intelligence(AI),Real-time Cities Technology spending forecasts Technology Stack Vendor landscape Products&services Standards&interoperability Competitive Advantage Strategies&business models Partnering&M&A Market differentiation Market forecasts Overall Impact to Business within Vertical Markets How IoT Will Transform Industries and Create Business Models How is the IoT Different from MRO Transformation?Source:Frost&Sullivan Licensed to User ID:34966University of TorontoUnauthorized Distribution Prohibited16 9AB0-22 The Horizontal Market Perspective:IoT Program Vendor landscape Products and services Standards and interoperability Competitive Advantage The Technology Stack Strategies and business models Partnering and M&A Market differentiation Market forecasts Security and IT infrastructure IoT:The digitization and virtualization of objects,people,and places into interoperable data flows.Typically open-ended,mediated contractual relationships M2M(a subset of IoT):Solutions for monitoring and controlling devicestypically B2B or B2B2C contractual relationships Predictive analytics and decision support Applications,solutions,and services Enablement platforms and support systems Connectivity management and networks Data acquisition and management Devices and hardware components B2B=Business to Business;B2B2C=Business to Business to Consumer IoTConnecting the Dots:A Complete View of the IoT Landscape and Opportunities Source:Frost&Sullivan Licensed to User ID:34966University of TorontoUnauthorized Distribution Prohibited17 9AB0-22 What are the best market opportunities for commercial IoT equipment?Which regions offer the most opportunities for MRO service providers?Where will the market demand be in 10 years?Are airworthiness authorities involved in the transformation,and if so,how?Should any capability gaps be anticipated,and if so,which ones?How can IT businesses capture new market opportunities?Key Questions this Study will Answer Source:Frost&Sullivan Licensed to User ID:34966University of TorontoUnauthorized Distribution ProhibitedReturn to contents 18 9AB0-22 The Information Issues Licensed to User ID:34966University of TorontoUnauthorized Distribution Prohibited19 9AB0-22 Concept Design and Analysis Simulation and Optimization Manufacturing Assembly Supply Chain Managed Services Services Transactional Systems Inventory Control Issues MRO support services are often merely one in a chain of transactions that occur individually and rely on individual decisions.Frequently,inventory is whatever shows up in the ERP system or in specialized software from an inventory control supplier.Support is Reactive Each stage of the support cycle begins as the last stage is complete and requires human interaction to start each stage.MRO Data Disconnect Most MRO events are conducted in near isolation from the data available to the operator and often to the OEM.Aerospace MRO IoT Market:Services Value Chain Issues,Global,2016 OEM=Original Equipment Manufacturer Major Aerospace Industry Areas Needing Transformation Source:Frost&Sullivan Licensed to User ID:34966University of TorontoUnauthorized Distribution Prohibited20 9AB0-22 The aircraft MRO business is an activity with near-term margin challenges.The MRO providers endure a tough and often-unpredictable market in order to survive.New aircraft and rapid fleet growth in emerging markets,especially in Asia,will change operators decisions about MRO.These emerging,fragmented,and unorganized markets will change the way aircraft operators make decisions about their MRO supply chains.OEMs want to capture a bigger share of overhaul activity and preventive maintenance.They will force changes in methods and technology on their suppliers for parts and prices.This will disadvantage MRO providers on price points.MRO providers must change as the type and timing of maintenance changes.Aircraft and components have become increasingly more efficient,reliable,and advanced products.This new technology requires technological improvements by MRO providers as well as improved versatility and skills.The timing and type of maintenance required will change with the technology,which will change the business methodologies and force tighter control of supply chain performance.MRO providers must contend with new competitors and often,an immature customer base.They need to be ready for shifts in market dynamics.They need to establish global partnerships with suppliers and logistics providers.These providers know how to succeed in dynamic and shifting markets.The move to greater globalization exposes the market to inexperienced workforces,immature logistic networks,and regulatory oversight challenges.Some of the technological improvements to the MRO processes will come from the aircraft OEMs and their suppliers.These will be better on-board diagnostics,better test equipment,and better systems control.The required new test eq