The current pressure on the global industry is forcing suppliers to review their strategies and the value-add of their services. Bob Barker, president of Parker Aerospace, talks to Flight Daily News about how his company is approaching the challenges.
Q: What effect has the present downturn in orders for business aircraft, regional jets and airliners had on your business?
A: The impact has clearly been negative, especially with respect to orders by our OEM customers. The result has been reduced volume in many of our factories and plants, leading to a need to reduce our direct and indirect costs.
Q: What measures have you taken to accommodate the resulting reduced demand for your products?
A: We are increasing our outsourcing efforts. We are continuing to develop longer-term contracts with a more select group of suppliers with the aim of reducing costs for our customers. And we have reduced employment levels. We also feel confident that, by continuing to implement our WIN Strategy, which is designed to identify and eliminate waste at every level in the organisation, we will improve processes and control costs.
Q: When do you expect a return to "business as usual," if indeed there has ever been such a thing? Which sectors and regions will lead the recovery?
A: I don't think we will ever return to the most recent, relatively prosperous days of the mid to late 1990s. While Parker's military business has seen a slight increase that helps to offset some of the commercial decline, we continue to face many challenges. If we do see a recovery, it will most likely be at the regional end of the business, as airlines move from the hub-and-spoke concept to point-to-point flights, with smaller planes that are less costly to operate and maintain.
Q: Your headline programmes are concentrated in the business aircraft and regional sectors. What are your ambitions in that sector?
A: One of the greatest benefits we can bring to our airline customers is an overhaul and repair service that allows them to better anticipate and plan for their costs. For example, we have instituted a cost per hour repair and overhaul programme that enables airlines to plan for maintenance costs on the basis of predetermined time and labour charges. This has been well received and has also enabled us to encourage our own suppliers to provide products and services that are more reliable, with lower maintenance costs.
Q: Among your wide customer base, who is pushing you hardest in demanding innovation?
A: In the past, "innovation" has meant providing the latest and greatest invention or widget. Today it is more to do with cost savings, new contracting models and comprehensive systems solutions, all of which yield cost savings and greater value for the end-user. Our OEM customers certainly want the last of those - total systems solutions rather than individual part fixes.
Q: Are their demands focused on the usual areas of cost, weight, volume, maintainability and lifecycle? Or are new parameters emerging?
A: Customer demands now include additional requirements relating to the entire system, including certification, system-level guarantees and dispatch rates. A successful supplier understands this very clearly.
Q: What are the most important new technologies and materials in your area of the industry? Are you happy that as a US-based company you have access to the strategic materials and human technical competence that you need?
A: We continue to invest in our systems capability, particularly with respect to capacity of systems to self-diagnose and troubleshoot before a failure occurs. I believe that US companies are leaders in this field, and at Parker we employ talented individuals in this vital area. But we must never lose sight of our emerging global markets - our challenge is to take advantage of all of the international resources that are available to us.
Q; Do you have a significant in-house R&D capacity? What is its current main focus?
A: Our main focus at present must be on smart systems that meet customer requirements for total integration and reliability. To that end, we are committing R&D efforts across Parker's 14 companies to achieve the most comprehensive and strategically effective solutions and benefits for our customers.
Q: You're an important supplier to Embraer, the top end of whose range is beginning to overlap with the lower ends of the Boeing and Airbus ranges. Is the distinction between "regional jets" and narrow/wide-body airliners valid any more?
A: I think the market will ultimately dictate, with the overall cost of operations being determined by excellence, innovation and experience. Parker will respond in the best interests of all of its customers.
Q: Do you foresee any other significant civil airframe manufacturers emerging outside the traditional centres of North America, Europe and Russia within the next 10 years?
A: We believe that China is the primary, most significant emerging civil airframe manufacturer and, of course, we are paying special attention to this market.
Q: How would you characterise your present standing vis-Ö-vis your competitors in this sector of the aerospace industry? Is teaming now so common that it no longer makes sense to talk of "competitors"?
A: Certainly, Parker considers itself among the best suppliers within the aerospace industry. And, yes, there is greater emphasis today on competing companies teaming with each other so that the right solutions are found for each company's customers. I think that's very healthy and good for our customers and the world economy. But I don't think the concept of competition will ever disappear. Nor should it, because competition is a valid and effective way to create a better product and reduce costs.
Q: What benefits do you hope to derive from a significant presence at Paris? How have your attitudes to costly show attendance evolved over the years?
A: While we feel that there are perhaps too many airshows, we do believe that Paris is among the best. Although we have had to reduce the number of staff we could send to this year's event, we are extremely pleased to be taking part again this year. We value the opportunity to strengthen relationships with our customers, partners, suppliers and competitors, as well as the ability to conduct programme reviews and technology seminars.
BOXTEXT: "...Our main focus at present must be on smart systems that meet customer requirements for total integration and reliability..."
Source: Flight Daily News
