Partnerships needed to Bring About the Benefits of IoT to Aerospace & Defense Merging High End IoT Experience with Deep Industry Experience

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1 Partnerships needed to Bring About the Benefits of IoT to Aerospace & Defense Merging High End IoT Experience with Deep Industry Experience June, 2015 IOT SOLUTIONS & INTEGRATIONS TAILORED FOR AEROSPACE & DEFENSE VINCENT COUTOUMANOS, PH.D

2 Overview of Aerospace & Defense (A&D) Market Conditions Minimal Strategic Growth In Most A&D Sectors The general assertion: U.S. preeminence in aerospace remains assured is incorrect In 1980 there were about 70 Prime A&D Contractors Today there are 5 Prime A&D Contractors About 30% of the A&D s highly skilled engineers and assemblers retire in 4 years Slow adoption of new technologies: A&D surveys point to poor experiences of past early adopters Information Technology ranks 1 st in breakthroughs needed to revitalize A&D according to an Accenture survey The tension between Early Adoption and Information Technology Advances Information Technology (IT) will not solve all of the issues facing the A&D industry Breaking the Early Adoption tension can be done by focusing on existing technology and analytics Existing technologies and analytics can make a big difference in two significant areas: Accurately assessing & reporting the state of a given fleet s health and operating conditions Integrating health conditions with repair resources lowering direct operating costs Conclusion: For the U.S. Aerospace Industry to retain it s preeminence: 1. Direct operating costs (DOC) must decline significantly - Commercial / Military / Space 2. Engineering must establish a better understanding of how their products are being used 3. IoT has proven it can impact DOC and dramatically impact Airframe Affordability through informed Engineering How do we get Aerospace & Defense Started? 2

3 How the U.S. Aerospace & Defense Industry Perceived Aerospace & Defense Today s Public Perception Famous Apollo VIII Earth Rise Picture Taken by Astronaut Frank Borman Photo from Dec. 24 th, 1968 Used today in television programming Atlantis Lifts off from Launch Pad 39A Total Launched / Landings Retired in 2011 Used today in television programming Jacksonville Riverfront Airport Impression of high end technology Takeoff / Landing / Safety Air Dominance F15 No U.S. losses in air to air combat roles Foreign sales would be stronger with lower technology transfer regulations 3

4 The Actual State of the Aerospace & Defense Industry Aerospace & Defense The Reality of the A&D Industry Today Russian Soyuz Rocket U.S. Transportation to ISS One way trip to ISS - $80M / U.S. Astronaut Russia will deny U.S. Astronauts access All engines for heavy launches Mfg. in Russia Average Age of Military Aircraft Average age of military aircraft 25 years Avionics not keeping pace with civilian markets Police Aviation Technologies outpacing military aircraft (FLIR, Terrain Avoidance, Radio Encryption Strong Commercial Sales Mostly Boeing Boeing has 10,000+ commercial aircraft flying today As of May 2015, Boeing has added 132 orders Airport Infrastructure Not Meeting Demand Delays 80% of U.S. Commercial Flights Originate Out of 15 Markets Supporting growth: A $2 billion funding gap requires quick resolutions 4

5 Early Adoption and Information Technology Advances How IT Companies Are Making Technology Advances More Difficult What are IT Companies Saying SAP Publication Connected People: Workers can be assigned as needed to coordinate automated production processes CEO Paul Maritz of Pivotal Limit Maintenance: By reviewing real-time data, there is no need to break down an engine every 2,000 hours Why they lose credibility May Want to Talk To The Unions About This UAW Work Assignments: Large A&D manufacturing plants have Union Work rules that limit allowable work to specific areas May Want to Talk To The FAA About This FAA Flight Critical Rules: Within flight critical areas, such as propulsion, it is very unlikely sensor data or predictive analytics will change break down rules SAP Publication Embrace Innovation: A&D companies that embrace innovative technologies can gain first-mover advantage Houston We Have a Problem: NASA Study on Innovation: A&D companies that have previously been early adopters of innovation traditionally pay a tremendous price: Systems do not perform as required High cost of certifying new technologies with FAA Early adopter s investments are often made less valuable when later releases become available The above examples are a small sample of a very large population of statements made by IT companies. Often used in marketing collateral and cause the loss all credibility with one statement 5

6 How Can IT Companies Push Past the First Mover Friction Derive benefits from existing measures Existing measures provided via Tip to Tail Sensors GAG Cycles (Ground/Air/Ground) Geographic Operational Area(s) Flight Control Movements/Records Temperatures (Various Devices) Pressures (Various Devices) Sample of Available Measures Measures Recorded Exceedances (Warranties?) Fault Codes Indicator Lights Fuel Flow Vibration (Various Devices) Improvements Through Predictive Analytics Reductions in unscheduled maintenance Pre-positioning of all parts needed to support scheduled maintenance Spare part availability Operator needs align with supported orders Measures Analyzed Proof of Concept : Consistently Achieve Long Standing Goals Accurately assess the state of a given fleet s health Align operational demands with support capacity Improve operational safety Design Engineering aligned with operational use Overcoming Early Adoption Fears: A Proof of Concept (POC) used to achieve long standing A&D goals with existing metrics 6

7 The Specific IoT Path Forward A&D Provide Consultants and Contractors With A&D Experience About 73% of surveyed aerospace companies wanted to work with consultants who possessed both: 1) Deep A&D Industry Knowledge 2) High end analytics experience Leverage consultants & contractors with deep A&D knowledge/analytics: Following Accenture s IoT Stage One Map 1) Start with a small Proof of Concept leveraging available data from existing fleet 2) Demonstrate how predictive analytics can identify and prevent catastrophic failure 3) Provide Engineers with specifics on how the customers are using the airframe improve affordability targets with data highlighting designs that are over engineered 4) Reduce unscheduled maintenance times and AOG (Aircraft on Ground) conditions 5) Assist suppliers with developing new revenue generating opportunities, reliving some of the downward price pressure to bring a complete airframe into operation 7

8 . Leverage Contractors for Complete Integration Lower System Delivery Costs Through Partner Integration Model Accenture Methodology Fleet History: Models to assess possible failure modes based on fleet Data Center: Cloud Based or Operator Based Focus on Security Engineering Standards: Anticipated failures tackled at optimal time limiting asset downtime Scheduled Maintenance: Pre-positioning of spare parts for scheduled maintenance cutting down throughput time Contractor Assist Methodology Contractor Integration and orchestration of Accenture s Approach Contract Assistance: Work with contractors possessing deep A&D industry knowledge and high end analytics experience Leverage Accenture's Predictive Asset Maintenance solutions: Refine early warning and detection algorithms this is likely to take several months depending on the type of fleet being monitored as well as the overall age of the fleet Competitive Advantage Optimization.. What Is The Ideal Event to Happen Prescriptive Analytics. How Can We Make It Happen Predictive Analytics.... Anticipating Events Analytics... Why Are Events Occurring Severity of Alerts. Qualifying Reporting Predix is a good start, but more will be required: Custom UI s, back end integrations & customized security will be needed for each client entering the IoT space Descriptive Reports.. Historical Reporting 8

9 Contact Vincent Coutoumanos, Ph.D RadianAce.com Advanced Analytics for Specific Industries Address: 802 Parkdale Court, Southlake, TX Phone: