The Consulting Playbook, Edition #9
Welcome to our new series, the Consulting Playbook, a collection of posts designed to offer insights into how businesses and their executives can utilize consulting as a strategic lever to boost performance. Each Consulting Playbook post is broken down into a few elements: Case Study, Additional Information regarding the technical application, and Additional Links related to the topic.
Introducing Process Management as an Integration Accelerator Following a Merger
The COO of a Leading Aerospace company asked for an expert’s help as the organization was in the middle of a major transformation, following the merger of four national companies. Evaluating all the complexities of the merger, the expert planned to direct the process toward the top 3 goals:
- Ensuring the Overall Company’s Integration
- Improving Corporate Performance
- Increase Efficiency and Collaboration on all levels
How the Transformation Unfolded
The Consultant’s early efforts focused on creating a buy-in of the concept and identifying how process owners could be empowered in their impact (creating accountabilities, budgets, and aligned incentive system). It was decided to start with a few pilot processes.
The next step aimed at building alignment for the process management with the senior leadership team, and driving awareness throughout the entire organization. A four-stage approach was designed to deliver on the objectives as following:
- Robust Architecture created for all the processes from domains, to major processes and general processes
- Well-defined roles and responsibilities for all the participants (process owners, process operators, process quality assurance…)
- Detailed methodology of the process management including process maturity gates, and cost/effort planning
- Pilot projects for some processes considered to be critical (configuration management, and design)
- Communications/change platform that included branding, executive and general policies, awareness toolkits, training, change “boosters”, articles and newsletters, and a process management handbook distributed.
- The Project Team supported by the Consultant leveraged by the hands-on support to the priority processes/owners identified, with detailed reporting to a subset of the Executive Committee
- End-to-End Process management was introduced to efficiently manage the whole business and connect all the functions.
Solid Cost Savings and Employee Satisfaction and Engagement
The integrated process management approach is a continuous effort given the complexities of the client’s merger efforts and their products, however the early outcomes and results can be summarized as following:
For the Organization
- Accelerated integration as all parties are now using standardized definitions and a harmonized process building based on the best practices of all legacy companies with new digital practices added
- Total estimated cost savings of €1 B total (efficiency gains, reduced development lead times with first time improvements, tools standardization) with €300 K total reached after one year.
For their Employees
- Increased collaboration and visibility, multiple interfaces with others
- More clarity within job activities and deliverables definition
- Positive impact on Engagement Survey results
Additional Information –
Top New Trends and Their Influence on the Aerospace Industry
The sky is the limit figuratively speaking for the growing Aerospace sector of the past few years. But along with the raising demand for air travel, huge backlog of new aircraft orders, and projected revenues for the major players, there is an increased focus on profitability too.
The latest trends that will influence the near-term results are:
1st. Technological Advance
The way aircrafts are designed, built and look like, is always evolving, and we are witnessing great improvements in cabin design, noise reduction, together with top notch avionics’ tools and components. The advanced manufacturing technology requirements and conversion to new electrical systems are also changing how aircrafts are manufactured, inducing change and bringing new challenges across the whole production cycle trying to keep up with the OEMs (original equipment manufacturer).
2nd. Increase in Replacement Demand
As airline fleets age, and aircrafts wear out, especially in mature markets, the need to update and modernize the fleet, is more pressing than ever.
With fuel efficiency and technologically advanced aircrafts, are being held as priority features, as many airlines are placing new orders. Over the next two decades the trend will continue.
3rd. Lower Oil Prices Affecting Growth and Demand
The lower oil prices have successfully influenced airlines’ profits, but aircraft manufacturers might be concerned with slowing replacement demand specifically short term too. Lower oil prices often can translate into lower fares and savings for the travelers resulting in higher air traffic, and at the same time the long term projections, are less concerned with current oil prices, and are considerably less optimistic.
For Further Reading: