Aerostructures tooling equipment_20120326_roland_berger

1Areostructures_Tooling_Equipment_FINAL_short.pptx
Munich, March 2012
The global aerostructures
tooling equipment market
Study summary

Executive summary
Source: Roland Berger
WHAT IS THE STUDY ABOUT?
> Roland Berger conducted a study about the global aerostructures tooling equipment market based on
extensive desk research and expert interviews as well as bottom-up market modeling along the value chain
> In 2012, relevant market expected to reach all-time peak of USD 1.4 bn stimulated by A350 and B787 programs
> However, in 2020, market downturn by 75% to USD ~400 m expected due to lack of new programs
> Consequently, installed capacity exceeds demand – Shift towards optimization/retrofit of existing equipment
> Service market share in 2020 of ~60% indicates need for full service offers, e.g. consulting or process optimization
> In addition, demand for simplified products and turnkey solutions at lower costs from emerging markets
combined with upcoming local suppliers drive trend towards cost efficient standardization and modularization
> Overall, aerostructures tooling equipment industry expected to undergo industrialization – Reflected by
automated processes, flexible production systems or other learnings from already industrialized industries
> Roland Berger expects that only two business models ensure a sustainable business
– Turn-key provider – Service-driven business model capitalizing on need for comprehensive turn-key solutions
– System optimizer – Focusing on in-depth know-how of single systems to optimize existing equipment
> Roland Berger experts have a proven track record in the aerostructures tooling equipment market and are ready
to support you in securing your success and preparing for the upcoming future challenges

3Areostructures_Tooling_Equipment_FINAL_short.pptx© Roland Berger Strategy Consultants
Contents Page
A. Research approach and market definition
Market estimation derived from underlying end markets and expert interviews 4
B. Market for aerostructures tooling equipment
Volume of USD 1.4 bn in 2012 falling to approx. USD 400 m in 2020 9
C. Need for action and recommendations
Shift in market and increase in volume and scope of services 21

A. Research approach and market definition

Our study analyzes the highly dynamic tooling equipment market for
the aerostructures industry
Background, methodology and key findings
Background KEY FINDINGSMethodology
> OEM (civil and military) and
aerostructures market has been
characterized by an increased
workshare and responsibility of
suppliers and a shift to new
markets as well as volatile
demand in recent years
> Tooling equipment market faces
a broad range of challenges in
line with increasing demand for
industrialized process and
process stability/reproducibility
> Third RB tooling equipment
study analyzes this key market,
major trends and success
factors for the future
> Interviews along the entire
value chain of aircraft production
> Desk research and competitor
benchmarks
> Market model for tooling
equipment is based on a
detailed modeling of underlying
customer markets and expert
interviews
> Market forecast 2010-2020
> Trends & developments in the
tooling equipment market
> Strategic challenges and
success factors for different
business models
> Key strategic recommenda-
tions to ensure future business
success
A RESEARCH APPROACH AND MARKET DEFINITION

6Areostructures_Tooling_Equipment_FINAL_short.pptxSource: Roland Berger
Global Aerostructures
Tooling Equipment
Market 2010-2020
INDUSTRY INTERVIEWS
Global aerostructures tooling equipment market study
DESK RESEARCH
CUSTOMER INTERVIEWS
EQUIPMENT SUPPLIERS
The global aerostructures tooling equipment market study covers
nearly all leading industry players and expert sources

We followed a unique, detailed approach – Relevant market derived
from underlying customer markets worldwide
Study approach and results
> Market development (product
offering, segments and regions)
> Current and future customer
requirements along value chain
> Relationship between market
drivers for OEMs and the
aerostructures and equipment
markets
> Technology trends in aerospace
industry and influence on
equipment manufacturers
> Current and future success
factors for tooling equipment
manufacturers
ResultsSTUDY APPROACH
Global civil and military
aircraft market
Aerostructures
market
Tooling
equipment market
Starting point is a forecast
for the OEM market for
civil and military aircraft
and helicopters by model
Based on a detailed
demand forecast, we
derive the global
aerostructures
market of OEMs and
Tier 1-3
Using our insights into
customer markets, we
then forecast the
tooling equipment
market in detail

> Automated and semi-automated systems
and equipment for drilling, riveting and
welding components/modules
> Major suppliers: Brötje Automation,
ElectroImpact, Gemcor, Loxin 2002
> Systems for high-precision movement and
positioning of components and modules
within the assembly process
> Major suppliers: AIT, Brötje Automation,
Dürr, ECA, MCE
> Manual and automated systems for fixing,
mounting, storage and transportation of
components and modules
> Major suppliers: virtually all OEMs,
aerostructures and equipment suppliers
Segment
Market definition and scope of the study
From a customer perspective, the aerostructures tooling equipment
market can be clustered into three main segments
Source: Expert interviews, Roland Berger
Scope of study: aerostructures tooling equipment
DRILLING &
RIVETING
I
POSITION-
ING
II
JIGS,
HANDLING
AND
TRANSPORT
SYSTEMS
II
CFRP1)
manufacturing
> Machines for
manufacturing
CFRP parts,
mainly automat-
ed tape laying
(ATL) and
automated fiber
placement (AFP)
machines
1) CFRP: carbon fiber reinforced plastics
Not in scope

B. Market for aerostructures tooling equipment

Volatile demand
mainly driven by
overall economic
development
Major market drivers – overview
Four drivers characterize automated tooling equipment market – New
program launch, rate increases, cost pressure & new technology
> Launch of new programs requires development
and installation of customized equipment
Start of new programs
> Significant increases of cadence for existing
models require higher automation and process
industrialization and even add-on capacity
Rate increases in existing programs
> Increase in productivity to reduce unit costs
> Increase in process stability/reproducibility and
reduction of supply chain risks
Cost/efficiency pressure
> New, more efficient technology and materials
drive adjustments/replacements of equipment
New technology & materials
PURCHASING NEW
EQUIPMENT
I
> Development and procurement of new, model-
specific systems and equipment for
manufacturing and assembly
> Investment often within a period of 2-4 years
INDUSTRIALIZATIONII
> Upgrades/updates of equipment & systems
> Partial or full automation of manual processes
> Increase of process stability through
automation, measuring and control technology
OPTIMIZATION OF EQUIPMENTIII
> Process optimization based on existing equipment with
minimal investment to increase output
B MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT

In 2010, the tooling equipment market was worth USD 1.1 bn –
Largest segment is positioning systems for final assembly
Service
140
Final assembly
400
20
(5%)
200
(50%)
180
(45%)
Module
assembly
300
50
(17%)
125
(42%)
125
(42%)
Sub-module
assembly
270
45
(17%)
98
(36%)
127
(47%)
Global aerostructures automated tooling equipment market1), 2010 [USD m]
> Jigs, transport, logistics and
positioning systems are the largest
segments, worth approx. USD 430 m
in total in 2010
> Riveting and drilling equipment have
around a 10% market share – main
application in sub-module (e.g.
fuselage shells/hull) and module
assembly (e.g. fuselage sections)
> Within final assembly there is limited
automated riveting and drilling
equipment demand – large share of
manual labor supported by jigs and
positioning systems
> Demand for jigs and handling
systems grows with increasing
component size
COMMENTS
1) Excluding automated carbon fiber equipment (AFP, ATL)
Jigs,
transport,
logistics
(total: 432)
Positioning
(total: 423)
Riveting, drilling,
robotics
(total: 115)
TOTAL VOLUME: USD 1,110

Demand will remain at record levels in the short term – Significant
downturn and shift to service expected from 2013 onwards
Aerostructures tooling equipment market, 2006-2020e (illustrative) [USD m]
+83%
11e
1.290
89%
11%
10
1.110
-73%
13%
09
890
84%
16%
87%
14e
944
83%
17%
13e
1.202
88%
12%
12e
1.426
90%
10%
17e
425
48%
52%
16e
636
69%
31%
15e
789
77%
23%
20e
385
38%
62%
19e
380
37%
63%
18e
364
37%
63%
08
1.119
88%
12%
07
904
86%
14%
06
781
85%
15%
As of today no
new programs
after 2016
announced
> A350 (and last phase of B787 tooling)
drive peaking market in 2011 and 2012
> Start-up of new programs in China and
Russia dampens the declining demand
in medium term from 2013 onward
> Slump after 2016 due to lack of new
programs at that stage between EIS of
A320 NEO/B737 MAX and end of the
decade on LCA
> Substantial shift towards optimization
and retrofit of existing equipment
causes significantly reduced volume
> Rate increases covered by optimization
of existing systems with only low
investments – significant rate increases
realized by duplication of existing
systems including minor adjustments/
improvements
COMMENTS
Note: USD:EUR exchange rate: 1.35
EquipmentService

Relationship of market drivers in OEM, aerostructures and tooling equipment market
The market is indirectly driven by growth in customer markets –
Primary strategic and operational requirements identified
Strategic requirements
> Consolidation and specialization
of players
> Internationalization and expansion
of footprint for targeting new
markets
> Taking on development and
financing risks
Operational requirements
> Handling of complete system/module responsibility
> Industrialization of manufacturing and assembly
process
> Integration of new materials
Strategic requirements
> Global turnkey capabilities for large projects
> Acting as a problem-solving partner for the
complete manufacturing and assembly process
> Local engineering and after-sales expertise
Operational requirements
> Suitability for interdisciplinary
global development partnerships
> Greatest process stability and
reproducibility
> Flexible system design and broad
areas of application
> Start/ramp-up of new programs
> Increase of production rates
> Cost/efficiency pressure
> New technology
Equipment
manufacturing
> Growth of world economy
> Growth of global trade
> Liberalization of air space
> Development of oil/kerosene price
> Development of wages
OEM (aircraft
manufacturing)
> Global fleet growth
> Governmental industrial policy
> Cost and efficiency pressures
> Risk reduction by OEMs
Aerostructures
manufacturing

Six major trends influencing the tooling equipment market have
been identified – Varying impact on supplier depending on segment
IMPACT ON SUPPLIER
Low High
> Transition from
factory to serial
production
> Standardized
processes,
automation and
process flow
> Transfer of best
practices from
other industries
> One tool for
multiple mo-
dels/modules
> More flexible
and accessible
work station ca-
pable of multi-
ple operations
> Automated,
software-based
process control
> Standardization
and mo-
dularization
without quality
compromises
> Product cost
pressure
through
emerging
markets and
OEMs
> Two clusters
identified (single
aisle vs. twin
aisle) – high
CFRP share for
twin aisle and
medium share
in single aisle
> Recent CFRP
boom expected
to slow down
> OEMs focus on
competencies
"system
integration" and
"program
management"
> Supplier risk
management
and financial
strength critical
to fulfill
requirements
> Local solution
competence
> Necessary
engineering and
process know-
how
> Optimization of
existing equip-
ment
1 Industriali-
zation
2 Flexibility 3 Cost opti-
mization
4 Material
mix
5 Risk
sharing
6 ServiceTREND
IMPLI-
CATIONS
Drill & Rivet
Positioning
Jigs & trans-
port systems

Use of process automation and production cadences by segment and region, 2011-2020
[no. of A/C per month]
Cost efficiency and industrialization are driving the market –
Automation is only viable in certain programs and regions
2011 20202011, relevant size for automation
Source: Teal, expert interviews, Roland Berger
2-4
Asia
0-9
0-6
1-6
30-40
Americas
0-14
0-7
1-2
30-40
Europe RussiaType
HELICOPTER
LCA – TWIN-AISLE
BUSINESS
LCA – SINGLE-AISLE
REGIONAL
A318-321, B787-6 to 9
A330, B777, A380, B767, B787, B747-8
Cessna Citation Mustang, Embraer Phenom 100
Embraer ERJ-190, ART 42/72, DHC-8-400
Eurocopter AS350, Sikorsky UH-60
COMMENTS
> Production rates for all civil
aircraft segments will increase to
meet global demand for new
aircrafts, plus the start and ramp-
up of new programs
> Increasing production rate
drives industrialization and auto-
mation in today's core markets
> Start of new programs in Asia
and Russia is shifting markets
> Evolving aerostructures players in
Asia and Russia require simpler
systems at lower costs but with
same accuracy
> Players from emerging markets
strive for turnkey solutions due
to their lack of expertise in aircraft
and aerostructures production
0-61-4 1
0.5
0.1
0.1
IB MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – INDUSTRIALIZATION

Flexibility
throughout
the aero-
structures
production
process
Dimensions of flexibility
Flexibility in machinery setup and production processes is enabled
by software machine controlling and automated process monitoring
> Similar aircraft models (e.g. A318 and
A321 on one production line)
> Regular updates of aerostructures design
due to product efficiency requirements
> Supplier's need for lower dependency on
specific models/components
Multi-model machinery
> Frequent re-design of processes and
components with effect on machinery
systems (configuration management)
> Supplier's thrive for lower investments
due to more generic production lines and
higher integration to reduce risk
Flexible production lines
> One system solution for multiple
models/modules
> Machinery to be adjusted rather
than replaced, software controls
required quality and precision
Growing importance of software
> Optimization of existing
processes to increase efficiency
> Higher integration and
connectivity of individual systems
> Automated process monitoring as
process enabler
Learning from other industries
IIB MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – FLEXIBILITY

Emerging markets and overcapacities in the near future require cost
optimization through standardization and modularization
Drivers and impact of cost optimization
DEMAND FROM EMERGING
MARKETS
> Demand shift towards emerging
markets
> New program launches in
emerging markets such as
Russia, China and Latin America
> Rise of aerostructures produc-
tion in emerging markets with
different cost structure increases
price pressure
> New markets and customers
require simpler systems and
turnkey solutions at reduced
cost
COST AND EFFICIENCY
PRESSURE
> Global demand decline compared
to current peak is expected to
result in overcapacity
> OEM cost reduction initiatives
force Tier-1s to reduce shipset
prices (e.g. SCOPE, Blue Sky)
> Strong focus on short ROI for
new equipment investments
> Price pressure in all markets
necessitates production and cost
efficiency on the same level of
accuracy
"NO FRILLS"
Cost optimization through
product standardization and
modularization
IIIB MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – COST OPTIMIZATION

Large aircraft currently being developed have a composite share of
over 50% – No further increase is expected at first
Material mix development as a share of total weight of aircraft structure [%]
Source: Teal, expert interviews, Russia & CIS Military Newswire, Roland Berger
IVB MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – MATERIAL MIX
Boeing Airbus LCA1)
2020e
ComacUAC
1) average material mix Large Commercial Aircrafts (LCA) in 2020
Bombar
-dier
2) including steel and titanium
79 79 80
70
20
12 13 14
11
10
50
11
1111
5
3
7
B777
1981
B767
2 3
1994
5
15
2011
B787
1969
B747
4
3
1967
B737
AluminumSteelOther TitaniumComposite
74
66 66 61
20
8
7
15 16 22
526
6
5
8
1987
A320
5
8
1985
A300/
310
5
7
14
7
2007 ~2014
A380
5
5
A350
7
1992
A330/
340
5
33
38
~2019
MS-21
19
5
5
~2019
C919
30-40
5-10
15-20
20-30
5-10
~2015
C- Series
24
46
302)
Ø 2020
50-55
8
7
25-30
5
> Up to B787 and A350, significant
increase in composite share
("CFRP hype")
> Updates of current single-aisle
aircrafts (A320neo and B737max)
are planned without a significant
increase in the proportion of
CFRP compared to A320 & B737
> Material mix (metal vs. carbon
fuselage) of new ("post-neo")
single-aisle generation aircraft not
yet defined, but clear preference
for metal
"Composite percentage remains
frozen at today's level – the new
A30X will have a metal fuselage"
– Head of Procurement at Airbus
Impact

OEM
Tier 1
Tier 2
OEM's demand for outsourcing larger workpackages drives ongoing
consolidation of aerostructures landscape towards "Super Tier 1s"
Supplier A
OEMs hand over design and supply chain
management to tier-1s and require risk-sharing
partnerships and large upfront investments –
Some take over value chain management
Situation today
Positioning as "sub-supplier" not
sustainable – Players will either have to
invest heavily and actively drive
consolidation or exit
Near-term upcoming
market consolidation
Airbus (FAL) Airbus (FAL)
Supplier C
Supplier CSupplier BDeliveries
Deliveries
Specs
Supplier A
Supplier B
Evolution of aerostructures industry
> OEMs hand over responsibility &
risk to Super Tier 1s by giving
them design & supply chain
responsibility for complete
workpackages / systems
> Responsibility for larger
workpackages together with
delay of aircraft programs (e.g.
B787 or A350) demands strong
financial backbone to ensure
liquidity – But aerostructures is
characterized by a fragmented
industry structure in Europe and
poor financial performance of
players
> Players from emerging markets
with a strong financial backbone
drive consolidation in Europe
Impact
VB MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – RISK SHARING

Decreasing demand in key markets is cushioned by increasing
service demand – New service models are required
> Expected increase in volume and
scope of service offering in line with
decline in demand for new
equipment
> Key drivers are the reduction of the
record order backlog by rate
increases and rising cost pressure
due to market entry of new (OEM)
players
> Significant decline in demand for
new facilities in today's core markets
(USA, Europe) but shift to process
optimization and efficiency plus
increase in flexibility of existing
systems
Evolution of after-sales and service market for tooling equipment
COMMENTS
Service
scope
Segment volume [USD m]
0 100 200 300
Low
High 2020
2010
Maintenance,
repair and spare
parts
Optimization of existing plants
> Automation
> Process optimization
> Plant layout revision
> Retrofit of single and complete systems
> Efficiency increase
> Cost decrease
VIB MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – SERVICE

C. Need for action and recommendations

Key market trends are driven by changing key customer
requirements – Starting point for strategic implications
Key trends and drivers
KEY MARKET TRENDS
Simpler, cost
efficient
solutions
Minimal set up
time due to
volatile
demand
"No frills"-
products with
low cost but
same quality
Product effi-
ciency require-
ments in balan-
ce with produc-
tion costs
Need for
turnkey
capabilities and
risk-taking
Higher demand
for services,
shorter
maintenance
intervals
KEY CUSTOMER
REQUIREMENTS
Increased usage of technical
industrialization and serial production
Invest in multi-model tools and
production lines
Cost and efficiency pressure intensified
by new entries from emerging markets
Share of composites remains stable as
in latest program revisions
Ongoing consolidation of aerostructu-
res landscape towards "Super Tier 1s"
Market development towards period of
fewer new equipment purchases
Industria-
lization
Flexibility
Cost opti-
mization
Material Mix
Risk
Sharing
Service
IDENTIFIED TOPICS
C NEED FOR ACTION AND RECOMMENDATIONS

We recommend a clear strategic focus on two business models to
ensure sustainable business even in turbulent times
Segmentation of business models in the tooling equipment market
> Wide range of customer requirements in
today's core markets (Europe, North
America) and future emerging markets
(China, Russia, India)
> Increased segmentation of the
equipment market expected
> Key challenge for small, financially
instable players: building a clear
USP/competency area for differentiation
> Key challenge for large, financially
strong players: building a global network
capacity to manage and control the
value chain
COMMENTS
Engineering know-how
COMPETENCE FOCUS
MARKET
FOCUS
SYSTEM SPECIALIST
> Comprehensive expertise in
individual systems/specific niches
> High innovation potential
> Strong brand and reputation in
specific system segment
TURN-KEY PROVIDER
> Turnkey capability for complex
new projects/green field projects
> Financial strength and
professional risk management
> Specification capability for
solution and interfaces
SYSTEM OPTIMIZER SOLUTION PROVIDER
> Comprehensive understanding of
manufacturing and assembly
processes of aircrafts
> Wide automation and robotics
know-how
> High customer focus and flexibility
> "One face to the customer"
> Control of system value chain
> Strong integration know-how
> Contract and risk management
Integration know-how
Emerging
markets
Today's
core
markets
I II
IVIII
Sustainable business models in declining markets

Key question for industry CEOs: How well are you prepared for the
future challenges?
KEY QUESTIONS TO THE CEO
3 6
52
1 • Does your strategy conform to or at least come
close to one of our future business models?
• If not, do you have a clear idea of what makes
your business and company special?
BUSINESS MODEL
• Does your company have a delivery capability
in tomorrow's markets (e.g. Russia, China)?
• Are you prepared to benefit from future growth
opportunities in these markets?
MARKET PRESENCE
• Do you have the right people, processes and
procedures in place for turnkey solutions?
• Is your company able to manage suppliers on
different continents along your value chain?
COMPETENCE PORTFOLIO
4• Is your company's cost structure flexible enough
to survive a market downturn of up to 70%?
• Is your financial position strong enough to survive
a temporary drop in new equipment business?
COST FLEXIBILITY
• Is your organization able to monitor, quantify and
manage project-driven risks and opportunities?
• Do you have a clear idea how much risk your
company's financial position can take?
RISK MANAGEMENT
• Does your service portfolio cover all relevant and
required services for your customers?
• Do you have the right sales and business
organization to push your service business?
SERVICE STRATEGYSERVICE STRATEGY

It's character that creates impact

Aerostructures tooling equipment_20120326_roland_berger

Recommended

Recommended

More Related Content

What's hot

What's hot (12)

Viewers also liked

Viewers also liked (20)

Similar to Aerostructures tooling equipment_20120326_roland_berger

Similar to Aerostructures tooling equipment_20120326_roland_berger (20)

More from Alberto Garcia Romera

More from Alberto Garcia Romera (20)

Recently uploaded

Recently uploaded (20)

Aerostructures tooling equipment_20120326_roland_berger