RESEARCH REPORT

In brief

In brief

  • The Aerospace and Defense industry faces unprecedented disruption on multiple fronts.
  • Supply chains face increasing volatility due to rapidly evolving market conditions and changing customer needs.
  • Nimble new competitors, especially in the space segment, are changing the dynamics of the market and technology is impacting the pace of innovation.
  • Agile approaches are critical in helping companies address increased volatility and pressures on profitability, while adopting new business models.


Rising product and service complexity

The Aerospace and Defense industry faces significant change. Supply chains face increasing volatility, and the industry is seeing a pivot to services as customers’ requirements change. Technology is transforming product design and manufacturing. Ninety-three percent of industry executives agree that emerging technologies have accelerated the pace of innovation over the last three years.



Agile product development is critical for success

To respond, companies must explore new business models that will address volatility and sustain profitability. This means a new approach to delivering value across the entire product lifecycle. The answer? Agile approaches that support the demands of service-based business models and the rapid creation of new customer-focused features.

Yet many players remain unsure whether agile can be applied to an industry characterized by complex products, with long lifecycles, that must comply with multiple regulatory regimes. These concerns should not prevent aerospace and defense companies from adopting an agile approach. But it must be adapted to the industry’s specific challenges.

Eighty-one percent of aerospace and defense executives agree that the integration of customization and real-time delivery will be key to gaining a competitive advantage in the future. Agile business models help organizations meet these needs by encouraging frequent releases of new features directly to customers.

Agile approaches in focus

An agile approach is high frequency, cross-functional, model-based and feature-driven. Product development is ‘operationalized’, engineers are empowered to do their work and goods are delivered just-in-time. Agile approaches’ characteristics contribute to faster, more responsive and higher-value product development:

  • High frequency
    Product development cycles shortened to encourage faster learning.
  • Cross-functional
    Development teams are cross-functional, spanning the entire company, and organized by feature.
  • Model-based
    Model-based systems engineering, hardware emulation and virtualization techniques are essential.
  • Feature-driven
    Product functionality is described from the user’s perspective.
  • Just-in-time
    Requirements and systems definition are delivered ‘just-in-time’ to accommodate change and local context.
  • Empowered
    Teams take accountability for performance, self-improvement, local organization and planning.
  • Operationalized
    Product development becomes ‘operationalized’, making it predictable and repeatable.

Lift off with agile

Aerospace and defense companies can harness agile methods and reap the benefits of doing so. But they need to adapt agile to the industry’s specific needs. Industry concerns about deploying agile center on three areas:

  1. Requirements management
    Agile development methods encourage a more flexible and iterative approach. To begin with, only a product’s essential specifications need to be established. The rest are subject to ongoing assessment. By adopting this approach, product designers can test the assumptions underlying their product earlier and faster.
  2. Program management
    Companies cite the complexity of regulation and program management as barriers to agile. The reality is that program management is made easier with agile methods. For example, if cross-functional teams work more closely together they simplify the management of dependencies. Regulatory activities can also be built into the agile development cadence rather than deferred to the end.
  3. Product and service development
    Aerospace and defense companies cannot release products and services incrementally or share beta versions with customers. But that doesn’t mean agile approaches are unsuitable. Stakeholder feedback about early versions of a product will still be valuable, even if the delivery is into a test or virtual environment.

Agile can also benefit developers of reusable components, or platforms who struggle to prioritize the competing needs of their internal customers. Clearly defined priorities can simplify interlock and optimize return on investments in research and development.

Build a culture for change

Aerospace and defense companies need a culture that encourages change. Starting small and building on success is the way forward:

  1. Build a coalition of change agents and supporters
  2. Identify suitable candidates for agile pilots
  3. Design an Agile Engineering Operating Model
  4. Plan, Do, Check, Act
  5. Extend to broader groups
  6. Celebrate success

As aerospace and defense companies confront the challenges of a changing market, they need to reimagine their approach to product and service development. By adopting agile methods, they can break out of their holding patterns and soar to new heights.

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