Transforming MRO through a connected transportation platform

Industry Perspective

Data driven maintenance, repair and overhaul accelerate business transformation

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Like successful enterprises in other industries, airlines are staffed with dedicated people, engaged in complex operations and tied together with massive IT systems. Few other industries, however, are held to the extraordinary standards of safety and towering expectations of performance that airlines must meet, minute by minute.

As airlines strive to keep their fleets operating on time, they must adapt to changing market conditions and pursue new avenues for growth. Transforming aircraft maintenance, repair and overhaul (MRO) operations offers airlines an opportunity to meet their strategic and growth objectives. Digitally driven MRO systems are more agile and can offer greater reliability, delivering faster turnarounds and more aircraft uptime.

While MRO software systems have contributed to the growth of airlines, maintained essential regulatory compliance and supported safe operations, legacy applications at many airlines have been extended, enhanced and customized as far as they can go. Even more recent solutions, while extensible now, will encounter limitations because they are built on the same legacy architectures and use the same custom-code approach to address changing business needs. These solutions lack the flexibility, nimbleness and time to value that airlines need to achieve the next level of innovation, savings or service efficiency.

The decision to overhaul an existing MRO system isn’t one to be taken lightly. Any effort to untangle such a complex system serving a mission-critical and safety-critical purpose must be done carefully. The good news is that airlines are not the only companies facing this challenge. Financial institutions, rail transportation, manufacturers and many others are moving complex, core legacy systems to fully digital, connected platforms. Airlines can, too.

This paper explores how replacing MRO systems with a modern MRO system built upon a connected transportation platform can deliver greater productivity, improve supply chain performance and reliability, and achieve new levels of cost control — all following a roadmap that speeds the transformation process and reduces risk.

Industry Perspective

The case for MRO transformationWithout sophisticated MRO systems, airlines wouldn’t be the global enterprises they are today. Many converging factors have brought some MRO systems to the end of their useful life span. Recent studies of aircraft IT MRO systems have revealed a long list of shortcomings, which include:

• Difficulty in minimizing the impact of scheduled and unscheduled maintenance

• Inability to drive operational improvements from a growing body of data generated by next-generation aircraft now entering service

• Continuing dependence on manual workflows and paper-based systems

• Difficulty in optimizing business processes due to the inflexibility of legacy systems

• Increasing IT expenses because of complex MRO ecosystems

• Additional training expenses due to legacy user interfaces and the use of multiple systems

Existing MRO systems have become highly customized and tightly woven into many other operational areas. Replacement isn’t a point-and-click upgrade. And because migration to a new MRO solution can be a multiyear process, many airlines still choose to bear the growing expense of maintaining existing systems.

That no longer needs to be the case. Airlines can break from the cycle of escalating costs and diminishing returns by adopting a new vision for what an MRO system can be and the value it can deliver.

Central to this shift is the transition to a connected transportation platform. Airlines want to analyze data to better predict maintenance events, minimize unplanned maintenance, react more swiftly to scheduling changes, increase resource efficiency, and ultimately become more agile. A platform for MRO services enables airlines to accelerate their business transformation.

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Industry Perspective

Airlines can break from the cycle of escalating costs and diminishing returns by adopting a new vision for what an MRO system can be and the value it can deliver.

Connected MRO vision for growthAirlines that digitize and transform maintenance operations will be positioned for growth. They can gain visibility into the scheduling needs and compliance of maintenance requirements, maximize aircraft maintenance yields, improve agility to adapt to operational business process changes, increase the productivity and job satisfaction of their workforces, and offer a superior experience for passengers by reducing aircraft delays.

A next-generation, connected MRO solution can help airlines achieve this by:

• Improving connectivity across systems, enabling airlines to make agile decisions based on accurate data

• Shifting equipment maintenance from scheduled or condition-based maintenance to analytics-based predictive maintenance

• Delivering productivity gains through automation and digitization of manual maintenance processes

• Optimizing maintenance execution by enabling just-in-time delivery of materials

• Improving the ability to gain insight into historical maintenance

• Offering increased flexibility to swiftly adapt to operational and regulatory compliance process changes

• Empowering technicians and simplifying their work via mobile applications and virtual assistants

• Reducing potential, expensive delays due to improved visibility of maintenance variables when making scheduling changes

Figure 1 illustrates the annual cost savings that could be generated by reducing the number of flight delays due to maintenance for a range of daily departures. A decrease in the rate of flight delays due to maintenance by a 0.5 percentage point yields from $4 million to $18 million in annual cost savings for 1,000 flights per day and 4,000 flights per day, respectively.

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Industry Perspective

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Figure 1. Annual cost savings from 0.5% reduction in flight delays due to maintenance

Flight delays due to maintenance as a percentage of total number of flights/day

2016 direct aircraft operating cost per block minute = $62.55 (U.S. passenger carrier delay costs, http://airlines.org/dataset/per-minute-cost-of-delays-to-u-s-airlines/) Average delay time per flight = 39 minutes Cost of spare aircraft not accounted for in the analysis

Figure 2 depicts the annual labor productivity cost savings driven by 2.5, 5 and 10 percent productivity improvements for three staffing levels of mechanics (e.g., 2,000, 5,000 and 9,000 mechanics). A 10 percent staff productivity gain could result in annual savings ranging from $15 million to approximately $70 million. Modernizing MRO solutions could deliver these substantial savings to airlines and enable them to grow without increasing their maintenance staffs.

A connected transportation platform is the key element that airlines require to develop a deeper understanding of their maintenance needs, while providing the foundation for delivering the kind of innovative services expected by airlines. A connected transportation platform enables a forward-looking operation to enhance quality and achieve the level of agility, flexibility, and speed needed to transform capabilities such as long-term planning, staff scheduling and task execution.

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Industry Perspective

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Figure 2. Annual mechanics cost savings due to productivity improvements

DXC Connected Transportation Platform defined

The DXC Connected Transportation Platform (Figure 3) is a cloud-based ecosystem built around a platform of enterprise services, a partner ecosystem, API gateways and infrastructure delivered by scalable hybrid cloud computing and storage.

The DXC Connected Transportation Platform enables third-party access via an API portal, with software distributed through an app store. It incorporates external data sources, such as internet of things (IoT) sensors and geolocation data. The various elements of the platform are connected by ubiquitous, software-defined, secure digital networks.

In a best-case scenario, tactical and operational information from external and internal sources is ingested, cleaned and validated, and then analyzed to deliver actionable business intelligence.

Moving to a collection of services

MRO systems are complex, but the model for moving from a large IT estate and a broad applications portfolio is well defined. One of the cornerstones of this model is the conversion of applications into a collection of services enabled by the DXC Connected Transportation Platform.

Rather than building monolithic, standalone blocks of code, applications are assembled from component parts that can be swapped in or out for varying business needs and processes, such as aircraft discrepancy tracking, or quality and reliability management. Where a service has been created for one process, it can be leveraged for another. The same features don’t have to be developed over and over to facilitate processes in different silos in the business.

Industry Perspective

Digital transportation applications

Digital transportation framework

Transportation components• Passenger/retail• Air & rail operations• Warehousing/supply chain

Data & analytics• Location analytics• IML, AI & bot development• Analytics platform• Next-gen data platform

Transportation ecosystem• Platform services• Technology services• Business services

Passenger MRO Crew Equipment Cargo Infrastructure Supply chain Ecosystem

Traveler experience

Capacity management

Asset management

Resource management

Supply chain

Cloud Network Security Operations DR/BCAuditService management

UI/UX Security Microservices API management Integration Mobility BPM

Organizing by capability and feature allows microservices to be leveraged across functionality and roadmaps for industry-relevant solutions.

UI/UX: User Interface/User Experience

API: Application Program Interface

BPM: Business Process Management

IML: Interactive Machine Learning

AI: Artificial Intelligence

DR/BC: Disaster Recovery/Business Continuity

Figure 3. DXC Connected Transportation Platform

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Perhaps more importantly, this approach eliminates the redundancy in the business that creates escalating maintenance costs and mounting inefficiencies. It speeds the process of adapting the business to changing conditions and regulations. It accelerates the rate at which old equipment can be retired, reducing the overall cost to the business. At the same time, it increases the speed at which new business features can be added.

An established roadmap

DXC Technology’s phased approach enables clients to begin realizing benefits immediately and sets the stage for future transformation tasks:

• Deploy a tethered platform. The first phase of transformation begins by tying applications in the airline’s legacy and current MRO portfolio to elements of the DXC Connected Transportation Platform, using services as mediators between the legacy/current portfolio and the platform. This allows an airline to quickly adopt the new model, manage MRO tasks in a new way and move fast. We recommend that clients begin at this stage; it is a low-risk proposition because existing applications and infrastructure remain in place.

• Begin selective migration. In the next phase, applications are carefully dissected to assess what specific services they provide. Each service is developed as a separate, discrete function and deployed in a cloud-native architecture. Data is moved out of the legacy system into an architecture that supplies the newly developed services. Some applications continue to serve processes that weren’t moved to the new architecture. This phase marks an important transition toward a fully connected, digital architecture. It also begins to deliver significant cost savings.

• Achieve full transformation. Eventually, an airline on the digital journey will arrive at the point where wholesale transformation is necessary. This is the point at which core business logic is removed from all applications and converted into discrete services. After this phase, applications can largely be retired. This phase encompasses the conversion of applications connected to the platform to eliminate the need to build bridges between converted and legacy/current systems. It also results in the greatest business benefits: enduring cost savings, greater agility and flexibility, and faster delivery of innovative services to customers.

Benefits of a platform-based approach

The DXC Connected Transportation Platform provides airlines a path to the flexibility and agility they need to augment, supplement and replace their legacy and current MRO systems. We believe this opportunity presents a compelling business case that can help airlines establish a successful transformation plan.

Moving to a connected transportation platform offers airlines of all sizes the ability to fully replace their MRO systems over time, reducing the risk associated with large-scale reengineering projects. Further, large airlines that maintain their own systems will be able to leverage and reuse existing capabilities while avoiding the trap of replacing one monolithic system with another.

New aircraft are coming into service, bringing with them unique service requirements. They also generate incredibly large volumes of data that can provide greater insight into maintenance operations to reduce maintenance costs. The DXC Connected Transportation Platform provides the scalability to handle orders-

The DXC Connected Transportation Platform provides airlines a path to the flexibility and agility they need to augment, supplement and replace their legacy and current MRO systems.

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Industry Perspective

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Learn more at www.dxc.technology/travel

About DXC Technology DXC Technology (DXC: NYSE) is the world’s leading independent, end-to-end IT services company, serving nearly 6,000 private and public-sector clients from a diverse array of industries across 70 countries. The company’s technology independence, global talent and extensive partner network deliver transformative digital offerings and solutions that help clients harness the power of innovation to thrive on change. DXC Technology is recognized among the best corporate citizens globally. For more information, visit dxc.technology.

© 2018 DXC Technology Company. All rights reserved. MD_8034b-19. May 2018

of-magnitude growth in operations and maintenance data. The platform enables airlines to easily gain access to maintenance data and drive insights that yield improvements in maintenance processes.

The improvements in connectivity and collaboration made possible by the DXC Connected Transportation Platform offer benefits to employees and passengers alike. Reliable communication is crucial to run smooth operations, and today’s patchwork of technologies often results in missed messages that lead to delays, inefficient use of staff and unscheduled repairs. A modern digital transportation platform offers robust connectivity through multiple mobile-friendly channels with faster, more reliable message delivery. Improved communication enables maintenance crews to monitor and respond to real-time conditions faster, turn planes around more quickly and schedule maintenance more effectively.

Another benefit of the DXC Connected Transportation Platform is cost savings. Digital transformation certainly creates efficiencies in IT infrastructure and application portfolios that drive down ongoing IT maintenance costs. But that’s just half of the story: Strategically, a connected transportation platform results in savings in every area of airline operations:

• The ability to better predict maintenance needs results in lower supply chain and overall maintenance costs.

• Improved collaboration with inventory suppliers means that an airline is better able to plan for just-in-time inventory and to carry less inventory, and it reduces the wait time for parts in the warehouse.

• Improved performance at every level translates into improved fleet utilization and cash flows that result in better financial numbers.

Looking ahead

Airlines today face critical decisions that will have an impact on their strategic direction and long-term objectives. As the airlines look for ways to grow and deliver new value to customers, success hinges on embracing solutions that lead to their desired business outcomes: maximizing the availability of aircraft and their reliability while minimizing maintenance costs.

This is happening at a time when legacy and current MRO systems have reached the limit of their abilities. Rigid systems that perform a highly defined set of tasks no longer fit airlines’ needs. What’s required are flexible solutions that can be easily adapted to new aircraft, plus automated workflows and next-generation tools that empower employees to work more efficiently.

The DXC Connected Transportation Platform, built on services and deployed on the cloud, offers airlines the best foundation on which to build modern, capable MRO systems that will help airlines achieve their most pressing business outcomes, both today and in the future.

Industry Perspective