Contending with new industry pressures
Customers are watching their budgets closely, putting intense pressure on the bidding process, and requiring A&D companies to leverage advanced costing models to predict supportable breakeven points. The spending mix is changing rapidly as airline revenues have come to a standstill and defence outlay is ramping up. Aircraft manufacturers have taken a hit as regulations place new restrictions on airlines. As a result, manufacturers expect long-term commitments from industry partners to help spread risk across the value chain. For military contractors, the market is taking shape based on new strategic priorities such as anti-terrorism and homeland defence. An increasing reliance on a networked battlefield and consolidated military shipyards is putting new demands on suppliers. Space and defence departments are looking for prime contractors that bear risks over the whole program lifecycle. While consolidated A&D companies have improved processes and controlled spending, they are left with a bloated asset base, which affects profitability. Driving profits while navigating a complicated industry has always been a challenge, and those companies that have emerged as leaders will need to build on their efforts to collaborate efficiently, squeeze costs and respond with agility to market trends. The industry is being transformed by trends toward globalisation and new technology. In this increasingly networked business environment, the A&D companies that can leverage open systems and tools for faster development have an advantage. And those that can spread risk throughout the supply chain by outsourcing processes such as non-core manufacturing, product development and after-sales service, are in a much better position to succeed. Go deeper with IBM Business Consulting Services IBM Business Consulting Services combines deep expertise with A&D-specific solutions and technology to enable an effective counter to market pressures. We help you ride industry trends and benefit from their opportunities. Going forward, growth will depend on leveraging innovative, open technology to reduce the asset base you need to deliver products and services. And companies with capabilities to collaborate effectively within the enterprise and across the supply chain will have an advantage. Your company will have to determine its core strengths in order to differentiate from competitors. With our broad capabilities, insight and expertise, IBM is well qualified to help your business succeed. To read the full report, download the pdf file at the top of this page. | 
