Stories to watch: Farnborough International Airshow 2024

Story One: Aerospace growth outlook: The need for a tech-enabled supply chain
While there are ongoing challenges facing the industry, such as supply chain issues and continued geopolitical tensions, aerospace and defense leaders going to Farnborough for the air show will be feeling positive about where the industry is headed, because we are at a pivotal moment. Projections from our recent Commercial Aerospace Insight Report indicate that globally, company revenues will return to and surpass pre-2019 levels by almost 11%, fueled by a surge in long-term demand for both new aircraft and aftermarket services.

It’s an optimistic forecast, but it’s tempered by persistent supply chain challenges caused by the industry’s slow adoption to automate processes, which will likely continue to impact the market this year and into next. Aerospace companies must get to grips with this issue and navigate the complexities of a supply chain that is critically dependent on a vast network of suppliers for essential parts and systems. More than half (55%) of executives say they are still relying on time-consuming and cumbersome manual processes for supply chain monitoring, data exchange with suppliers and risk management.

However, there are some positive signs to address these supply chain challenges. In the same survey, 66% of aerospace and defence executives expect Gen AI to strengthen supply chain resiliency by enhancing interactions with n-tier supplier networks and enabling intelligent buyer assistants.

To address these ongoing supply chain disruptions and manual processes, aerospace executives should adopt three key technology-based approaches: implementing a digital twin of the supply chain, including the n-Tier, for better visualization and management, enhancing supplier engagement through advanced digital platforms beyond traditional methods, and transitioning to automated, digitalized operations for continuous monitoring and pre-emptive risk management in supply networks including internal operations.

The leaders in the industry will be those that embrace the use of AI and digital solutions.

Story Two: Aerospace reinvention, powered by Gen AI at scale
Generative AI became a mainstream topic in the media in late 2022 and caused quite a stir for aerospace leaders as they grappled with what it meant for their businesses. One thing’s for sure, with 53% of overall working hours within aerospace & defense having the potential for automation or augmentation powered by large language models and Gen AI, it’s something that will impact the entire industry. In Paris last year, we were talking about it in terms of proof of concepts rather than many real applications. This year in Farnborough, expect to hear about a shift away from POCs to end value, powered by generative AI at scale.

Priority areas we believe the industry should focus on right now, are in business development, engineering, supply chain, aftermarket and in corporate functions and IT.

What we’re seeing with these types of activity is that by embracing generative AI, along with other advanced technologies, new pathways are opening to unleash greater human potential, productivity, and creativity. We found 95% of aerospace and defense executives agree that making technology more human will massively expand the opportunities and 80% anticipate a medium to high impact to their organization’s business processes as a result of generative AI.

Story Three: Manufacturing and quality
The focus on manufacturing and quality continues to be imperative at the airshow and is a major issue for the industry.

Aerospace executives have reported a staggering $41 billion annually in missed revenue growth opportunities in the past few years due to challenges in engineering, supply, production, and operations. These disruptions, ranging from the pandemic-induced demand fluctuations to geopolitical unrest affecting wages and material costs, have exposed critical vulnerabilities in resiliency.

In response, the aerospace industry must shift from short-term fixes to strategically enhancing resiliency in key capabilities. And as the workforce strives to progress up the learning curve, there is a vital need to embrace the support that advanced technology provides.

A major area of focus is automation and robotics, which are increasingly becoming integral components of aerospace manufacturing to drive efficiencies and innovation. They can be applied in various stages of aerospace manufacturing, from design and production to inspection and maintenance. On the factory floor, robots equipped with sensors are used for many tasks ranging from assembly and riveting and fastening, through to welding and painting.

Another key benefit is the enhancement of worker safety. Aerospace manufacturing often involves hazardous tasks, such as handling heavy components or working with toxic materials. Robots can perform these tasks, reducing the risk of injuries and creating a safer working environment for human employees. This also allows the workforce to focus on more complex and value-added activities.

Story Four: Attracting and ret(r)aining the next generation of talent
An aging workforce has meant many aerospace employees either have already, or are about to retire, creating a huge gap as the industry loses a substantial amount of expertise and knowledge as the workforce trends younger. In fact, 42% of the aerospace and defense workforce have less than five years of tenure with their current employer and attrition today stands at 7.1%, which is a huge jump from the 4.3% it was in 2017. As a result, 97% of aerospace and defense executives consider talent retention as important or very important for their organization so will be top of mind when leaders come together in Farnborough.

In addition to those workforce challenges, innovative technologies, such as generative AI, mean new skills are needed in the workforce, creating a need to acquire new people with those skills and reskill existing employees. As a result, this has pushed the issue of talent right up the agenda, so expect it to be a topic of conversation in Farnborough this year.

These new ways of working will mean a shift in mindset for aerospace leaders, which can be tricky as they themselves get to grips with the pace of innovation. Success requires an equal attention on people and training as it does on technology. This means both building talent in technical areas like AI engineering and enterprise architecture, and training people across the organization to understand and work effectively with AI-infused processes.

Addressing these challenges requires aerospace companies to invest in workforce development initiatives to ensure they can continue to innovate and meet industry demands.

John Schmidt is Accenture’s global aerospace and defense industry lead.