by Tim Wilson
A flight path to success in aerospace manufacturing
Suppliers to Canadian aerospace manufacturers face numerous challenges. Tier one and tier two companies have high standards, and it can take time to garner trust. At the same time, planning for the long-term can be difficult in an industry that is prone to market fluctuation. But the good news is hard to resist: this is a high-value sector, with excellent margins, and long product cycles that can lead to more predictable revenue streams.
After taking a survey of the industry, below are seven key success strategies from Shop Metalworking Technology as we head into 2015.
Find your niche
You can’t succeed in a market if you don’t know where you fit. Cascade Aerospace in Abbotsford, BC, for example, is one of only two companies worldwide that service the Lockheed Martin C-130 Hercules. BC’s Finance Minister, Mike de Jong, has pushed this success story, saying that his province’s aerospace industry “has quietly established itself in a way that most British Columbians, most Canadians don’t understand.” It’s a manufacturer’s job to change that by getting a good education on where it plays in the market.
Hit the curve
Aerospace is not a static industry. The right strategy means knowing where the trends are, and aiming to hit the market on an upswing. Industry Canada expects the composition of Canadian aircraft production to change significantly as Canada gains a greater foothold in the large jet market, and for the aerospace defence industry to continue to build on its MRO capabilities, with close tie-ins to global supply chains. If you want to build on success in the future, be aware of the growing role of composites and advanced machining for durable, lightweight parts.
Get the right people
Skills are a challenge, and will remain so, particularly as the industry shifts into new materials and supply chains become more closely-integrated. Industry Canada has called for more investment in research and skills training, and some provinces are stepping up to the plate, but ultimately it is up to each company to ensure it has the manpower to deliver. If you aren’t willing to invest here, then this sector is not for you.
Know your government
Canada is up against the European Union, the US, and China. We are still trying to work out how provincial investment dovetails with federal initiatives. Find out what provincial support there is, and how it fits with national efforts like the Strategic Aerospace and Defence Initiative (SADI) program. You might not be directly in line for that money, but the people you sell to could be.
Tell the story
Canada has the world’s fifth largest aerospace industry, accounting for more than $22 billion in direct revenues nationwide, and we are third in global civil aircraft production activity. If you are looking to expand into this market, this is a story worth telling to prospective investors.
Find the money
You need to know where tier one and tier two players are investing. Pratt & Whitney Canada (P&WC), for example, invests on average $450 million annually in R&D. It is also putting $275 million over the next five years toward technology and facility upgrades to support its business making turbofan, turboprop, and turboshaft engines. These kinds of investments will inevitably result in some money going into the supply chain.
Make the call
If you are starting from scratch, you will need to reach out for information and advice. The first stop is The Aerospace Industries Association of Canada (AIAC), which has plenty of resources to help you assess whether or not aerospace is for you. Remember, an effective aerospace strategy requires a long-term commitment. This is not an industry for jobbers pulling one-off contracts, or for shops unwilling to invest in both people and technology. SMT
Tim Wilson is a contributing editor. [email protected]
