VIEWPOINT: Defence manufacturers need to hit digital production pedal

After scaling back operations due to reduced demand and shrinking stock levels caused the US defence sector to lose over 40% of its value, these same manufacturers are now struggling to match renewed demand and hit the production accelerator pedal at full speed. Many of the challenges defence manufacturers are facing are external, but some are internal. Manufacturers are being held back by disparate internal manufacturing systems that they have never addressed, and inconsistent information sources that are hindering their ability to streamline operations and fast forward production. Rob Mather, Vice President, Aerospace and Defence Industries, IFS, identifies the four operational trigger points where digital technologies are addressing defence manufacturing issues, and boosting production without driving up costs and risk. A recent Deloitte report pulled no punches when it argued that to unlock growth and efficiency in today’s growing defence market environments, A&D organisations had to take digital transformation seriously. “Modernising and integrating processes and enabling technologies are some significant steps for the A&D industry to improve production throughput and cost efficiency. Embracing digital transformation can reshape A&D production processes at all stages, significantly reducing industrialisation cycle times, improving efficiencies, increasing production yield, and elevating quality standards.” This means a company-wide approach to software and information that connects the shop floor to the top floor so that they all operate efficiently to increase production, precision, and agility. This must start with moving away from siloed and inconsistent information sources to a single integrated management system that gathers data from the Manufacturing Execution System (MES) and Enterprise Asset Management (EAM) system to inform the Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) system—providing a single source of the truth! Here are the four key operational trigger points where technology will enable defence organisations to achieve the high-performance manufacturing operations they need to take advantage of the boom years ahead. AI enabled problem detection augments and de-risks lean operations To help deal with surges in demand, defence manufacturers have reversed inventory strategies from lean and just-in-time principles to over-stocking parts to ensure inventory buffer. Despite reducing production risks, financial risks have been increased due to cost of purchase, storage, and tracking of materials and parts. To better balance risk, defence manufacturers can look to integrate operations and take advantage of demand-driven material requirements planning (DDMRP). This will ensure inventory levels match demand levels and supply chain variability. By looking at actual usage data, DDMRP can determine if the stock level for a part is sufficient to cover demand, making defence manufacturers more sensitive to supply chain disruptions, variations in demand, and production downtime. The use of AI within defence forces and manufacturers is on the rise. With U.S. Department of Defence (DOD) budgeting $1.8 billion for AI applications, and stating that AI applications will be used to help defence forces and organiations recognise patterns, learn from experience, make predictions, and generate recommendations. AI can help further de-risk production and financial issues. Manufacturers should look to combine anomaly detection and pattern recognition with real-time data correlation. The combination of AI anomaly detection and DDMRP can radically increase the speed and accuracy of problem detection throughout all aspects of the organisation, and action potential chokepoints before they escalate into complex and costly problems. Drive efficiency by integrating management platforms to unify planning and production Defence manufacturing projects by their very nature are complex, with multiple production lines working to intricate assembly requirements. Project management, already a major challenge for defence manufacturers, is further exacerbated by this current ERP management software causing a disconnect throughout operations, alongside a lack of a skilled workforce readily available to defence manufacturers. Recent reports from Guidant Global highlight the workforce issues facing the UK defence sector, with key decision makers stating they’re already facing a lack of skilled manufacturers and mechanics. Implementing integrated project management software will allow defence manufacturers to align their planning through their operations to optimise their production and increase efficiency. The use of IoT technologies such as integrated project management software allows for data to flow in real time so people, systems, and capabilities can be leveraged in every aspect of their operations. The increased visibility brought by integrated project management software can allow for manufacturing teams to react quickly to new priorities. Ensuring workers and machinery are coordinated to maximise efficiency and capacity, and avoid time, money, and resources being wasted. Increased organisation-wide visibility with robust business intelligence to automate workflow triggers One of the biggest challenges defence manufacturers are struggling to overcome due to rising demand levels is reducing lead times—in August 2023 the delivery time for production materials reached 87 days. Despite being reduced by 13 days compared to 2022, the average lead time has yet to recover to pre-pandemic levels. Integrated workflows can help defence manufacturers reduce this with its ability to provide all relevant parties with data so that people, machines, and assets’ time and skills are all optimised. A key part of digital transformation within the defence manufacturing industry is to move away from siloed data to real-time data that flows from the shop floor to the top floor of defence manufacturers. Powerful Manufacturing Execution Systems (MES) with integrated workflow engines will allow for data to flow from end-to-end, so every worker has operational visibility of what’s happening and what needs prioritising. Utilising powerful MES with integrated workflow engines brings far more benefits to defence manufacturers compared to typical ERP systems with data aggregators or business intelligence reports. Integrated workflow systems are accessible for all relevant parties—providing vital insights into ongoing work everywhere. A single source of the truth keeps defence manufacturers on the right side of regulations Defence manufacturers operate in an industry defined by regulatory requirements whether it’s supply chain, cyber security, sustainability, or employment—they all have their own regulations to comply with. This requires defence manufacturers to have fully traceable operations and processes which generate information that is readily available for regulatory reporting. As regulations get stricter, current disjointed systems make it hard for defence manufacturers to meet requirements, with slow data compilation and increased risk of information being inaccurate or out-of-date. A real-time, single source of the truth is needed. This means manufacturing management platforms should include integrated and automated templates for mandatory government reports that are ready to use when called upon. Combining MES and ERP in one place will also help them comply with the ISA-95 standard from the International Society of Automation (ISA). This ensures they are using these standardised data models and communications to enable consistent and accurate data exchanges throughout all business systems. Putting the digital building blocks in place to achieve high-performance manufacturing Within the defence manufacturing industry, some organisations may choose to partner with strategic technology partners to help them achieve their financial and production target. These partners can better understand the challenges that defence manufacturers are facing, and the integrated management platform they need to meet challenges, optimise operations, and increase customer trust and satisfaction. This means focusing on moving away from siloed and disparate data to an integrated system and single source of the truth with data from operational systems such as MES and EAM systems being passed straight to the CRM and ERP system. An integrated management platform can help defence manufacturers deliver on increasing demands—but make the most of their existing workforce and stay compliant. Getting this digital transformation right is critical for defence manufacturers to grasp control of internal challenges they are facing, and unlock the high-performance manufacturing needed to make the most of this recent rise in demand. For Editorial Inquiries Contact : Editor Kym Bergmann at [email protected] For Advertising Inquiries Contact: Group Sales Director Simon Hadfield at [email protected]