With some aerospace and defense organizations lagging in the adoption of Industry 4.0, what can A&D companies do better to achieve digital transformation?
Industry 4.0 technologies could be the key to unlocking future competitiveness. There is a clear and compelling case for aerospace and defense (A&D) companies to leverage these technologies and incorporate digital transformation throughout their organizations.
In a global survey conducted by Deloitte to assess the current state of Industry 4.0 adoption across manufacturing industries, 84 percent of A&D executives said they consider leveraging new digital technologies as key to market differentiation—yet only a quarter of the A&D companies are currently using these technologies and tools to access, manage, analyze, and leverage data from their digital assets to inform decision-making in real time.1
Industry 4.0-driven technologies can impact every company that operates within the A&D industry, from original equipment manufacturers (OEMs) to small suppliers. However, not all companies seem to be taking advantage of these technologies, whether for growing revenues or improving profitability. Designing new products and business models remains a significant challenge for most A&D companies, with 40 percent of the surveyed A&D executives identifying the establishment of new business or delivery models as the top challenge their organization faces as they pursue digital transformation initiatives.
Furthermore, despite implementing Industry 4.0 technologies in areas such as factory manufacturing and supply chain, many A&D companies have been slow in adopting broader digital transformation initiatives that span the entire enterprise. This is because many surveyed companies in the industry note that they have not made Industry 4.0 a priority across the enterprise; rather, they have primarily invested in specific, focused technology implementations.
Limiting the digital strategy to a few business functions may increase the risk of A&D companies being left behind in today’s digital era. It is important, therefore, that companies across the industry understand and harness the power of new technologies to benefit from the opportunities of Industry 4.0 transformation. A&D companies, especially mid- and small-sized, could start small but scale enterprise-wide to maximize the benefits of these technologies.
Instead of viewing new technologies as an add-on to existing processes and practices, A&D executives should rethink how they do business leveraging those technologies. This report explores the lessons A&D companies appear to have learned in their journey in becoming digitally transformed enterprises and recommends how they could thrive in this age of Industry 4.0.
-- A&D executives face many challenges while pursuing digital transformation initiatives.
-- Designing new products and business models remains the top challenge.
-- The pace of technological change and a lack of technology know-how are the key technological and strategic barriers.
-- Adoption of broad digital transformation initiatives that span the entire enterprise has been slow in many A&D organizations.
-- As a result, only a small section of A&D companies seems to be truly benefiting from the opportunities provided by Industry 4.0 technologies.
Click here for the full report (16 PDF pages) on the Deloitte website.