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An Aerospace Supplier’s Digital Transformation Has Lift-Off

March 3, 2023
Woodward Inc., a $2.2B company with 42 facilities, began by focusing on its corporate procurement organization.

Where should you begin your "digital transformation," and how do you stay on track and measure success?

Woodward Inc., a global manufacturer of energy conversion and control solutions for aerospace and industrial equipment, recently implemented digital capabilities within its corporate procurement organization. The goal was to improve cost insights, strengthen supplier collaboration, streamline operations, and improve customer relationships.

Here’s a snapshot of how Woodward is advancing these important capabilities.

Frame the Strategy

Our team developed overarching goals and objectives to improve cost insights and supplier collaboration. This strategy also supported broader efforts to streamline product design and improve planning.

Working closely with strategic suppliers enabled us to tap into their expertise, control costs and ensure access to critical materials and components – especially for new product development. Consulting firm McKinsey reports that companies with collaborative supplier relationships can outperform their industry competitors by nearly 2X.

We chose our digital manufacturing simulation solution (aPriori) to simulate product design and production runs in real time and provide actionable guidance. We felt it would allow our teams to run complex design and production scenarios quickly to determine the best options for cost, materials and manufacturing processes.

To gain approval to move forward, we met with internal stakeholders to discuss the project and collect detailed feedback. Understanding specific team needs also helped us align short- and longer-term implementation activities based on business needs.

We added requirements and roadmap items to the plan based on these conversations. Executive sponsorship was critical to the initiative, and Woodward’s chief procurement and chief technology officers provided support throughout the process.

Develop the Plan

New capabilities aren’t likely to be adopted (or used effectively) if they force unwieldy processes on users. Helping users understand the “why” behind a workflow and making the process intuitive is central to fostering adoption of an enterprise solution.

Charting a clear course is also important. Our five-year roadmap includes key project milestones, including integration with other digital transformation initiatives.

Implement and Educate

Hit the Ground Running:  Year 1

Our implementation focused on the following three main areas: 

1. Improve Cost Insights:  We trained 10 employees for the initial deployment before adding additional users. A few months after the initial implementation, we added analysis for castings, forgings and two-model machining manufacturing process to our initial machining rollout. We also created a process to track the number of requests. This helped gauge initial use and plan for additional resources needed to support the increasing volume of requests.

2. Strengthen Supplier Collaboration:  Supplier negotiations can be lengthy – especially for new product development. Our goal is to eventually enable “zero-day RFQs” with select suppliers. By generating supplier-specific manufacturing cost models directly from our 3D CAD files, Woodward’s procurement team will be able to award purchase orders to suppliers based on pre-established terms to avoid lengthy negotiations.

This “zero-day proposal” model requires greater transparency regarding cost structures, manufacturing processes and capacity between manufacturers and suppliers. To get this insight, we’re creating digital factories that mirror suppliers’ physical manufacturing capabilities. We'll use digital factory simulation to improve design, sourcing and manufacturing decisions – and proactively identify potential cost overruns or additional manufacturing capacity requirements.

3. Build the Foundation for Success:  Identify opportunities to refine your process and test your initial assumptions:

·        Benchmark Results:  Comparing your results to other companies in different industries is important, but it doesn’t provide a complete picture. Woodward, for example, designs parts and assemblies to meet rigorous military and aerospace specifications. And because some of these designs are complex, they can take longer to analyze than high-volume consumer products. That's why we benchmark internal processes and also compare our results with data from vendors and other customers.

·         Refine your Process and Continue to Educate:  Our sourcing team was the first to use the system, and we focused on identifying product design cost outliers. Later, during the first year, design engineers began to use the system to identify and eliminate design for manufacturability (DFM) issues early in the engineering process. We needed to clearly define and refine the process for each user group, and then provide training.

Build Momentum:  Year 2 and Beyond

We’re transitioning to aPriori’s cloud-based service to help streamline management and administration as we increase adoption. To manage this growth, we’re expanding our reporting to track design changes, associated cost savings, and potentially other KPIs such as cost outlier analysis. And we may use business-level reports such as automated tracking of ROI and design-to-cost (DTC) performance to share with our executive team.

Operationally, we’re using the digital thread to share a “single source of truth” throughout the product development and manufacturing process. Woodward’s evolving model-based design process now includes tolerances in design files, which our vendor can use for more precise analysis by accessing this information from CAD files or associated PLM systems.

We expect to reduce negotiation times from (potentially) months to one week using suppliers' digital factories to simulate production. As we illustrate the benefits of this process to suppliers, we’ll eventually make supplier selection before parts are fully designed – which will help to accelerate new product development schedules.

4 Digital Transformation Lessons Learned

Our key lessons learned include:

1. Begin with the end in sight:  Any enterprise solution rollout will fall short of expectations without defined goals. We drove toward clear, short- and mid-term milestones and ensured that we were on track to support broader Woodward digital transformation initiatives. A five-year roadmap provides a clear path to help reach our goals and details the steps required to get there. This includes embedding new processes into an existing workflow to support user adoption. A five-year view can also illustrate how additional planning at the start can pay dividends during the initial deployment and subsequent expansion.

2. Listen, communicate and advocate:  It's essential to have a deep understanding of user needs, workflows and potential reservations about the deployment. Communication with the teams associated with this initiative is important – even for employees who may not be directly involved yet. Enthusiasm to use new capabilities generates a lot of great questions and use cases. Additionally, one of the best ways to advocate for a new program is to demonstrate ROI and associated successes. And when you’re reporting to busy senior executives, highlight success whenever you have an opportunity.

3. Don’t underestimate the importance of “360-degree” training:  Investing in training – especially early in the process – is central to getting quick wins during deployment, identifying areas to course-correct, and onboarding users quickly. First, we trained users selected to run the cost models. Then we trained the users who were requesting the models to help ensure they understood the process and could apply our vendor’s guidance. We didn’t fully anticipate the time needed to support this broad "analysis request" group, and we are allocating additional resources to address their questions.  

4. Don’t be afraid to deviate:  When we received feedback to add additional manufacturing processes, we momentarily pivoted and added support for castings, forgings and two-model machining manufacturing. This was viewed as an important “win” even though it wasn't a pre-launch priority. As we use the technology more, we’re getting requests to access new features, and we are adding those to the roadmap. We’ll also include these items as part of broader discussions regarding priorities, scope, schedule and budget.

New technologies are enabling companies to innovate faster than ever. But that’s only part of the story. Teams embrace change when they have a clear understanding of new opportunities and how they can play a role in moving a company forward. This aspect is integral to any successful deployment or operational shift. 

Chris Platz is global commodity manager, Woodward.

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