£16m efficiency improvements for UK aerospace and defence prime
We offer practical support for organisations operating in complex and heavily regulated industries, such as aerospace and defence, technology services and products, education, charities and not-for-profit, and central and local government, spanning from strategy to complex programme management.
One of the UK’s largest aerospace and defence prime contractors engaged us to help them reduce costs, improve competitiveness and develop new capabilities. Over a three-year period we helped them deliver major process efficiencies, procure and implement new IT systems, clean up their engineering data, and develop cutting-edge business intelligence capabilities.
Project background
After a long period of acquisitions, mergers, cost reductions and re-organisations, this geographically dispersed division was left with highly complex, poorly understood and undocumented processes, and very inefficient and costly IT. The business operates in an increasingly competitive market with huge pressure to reduce costs and improve customer service.
We were initially engaged to carry out a high spot review which we delivered with a joint team of consultants and client staff. This six-week review resulted in a clear definition of the top business priorities, the work streams required to deliver the change, and the first draft business case. After securing business case approval we set up the transformation programme to deliver the targeted improvements and new capabilities across five distinct work streams.
Key problems and challenges
At the outset the major concern raised by the business was the complexity, inefficiency and cost of their IT systems. However, in the course of the six-week high spot review it became clear that IT was definitely a problem, but it was dwarfed by the problems we found in the wider business. These included poorly understood, inconsistent and inefficient processes, poor user training for both systems and processes, and poor quality engineering and supply chain data.
Process Problems
Our high spot review quickly highlighted that several key areas of the business had major process issues. In theory, the organisation’s “Business Management System” (BMS) documented all the processes that their engineers, project managers and logisticians should be following. In practice, the BMS was effectively being ignored, and different teams were using different approaches and desktop tools - spreadsheets, databases and modelling tools - to carry out supposedly identical tasks.
Poor User Skills and Capabilities
The review also highlighted that many staff lacked the training or on-the-job experience needed to perform the required processes and use the complex supporting IT. In many cases users had not been trained at all, or had been provided with the training too far in advance of the system going live.
Data Quality and Consistency Problems
Critically, the high spot review included interviews with a wide range of management and staff. These interviews highlighted a consistent theme: the poor quality, inconsistency and lack of accessibility of much of their engineering data. This problem had arisen through the merging of different business units over many years, each having used a range of different engineering tools - such as product data management (PDM), computer aided design (CAD) and modelling - and never fully completing the required data migrations and integration.
Outdated Business Operations
Our initial review also identified several key areas where the business was operating in a reactive, old fashioned, cumbersome manner, particularly in its key customer interactions. This was evident in the spares and repairs and contractorised logistics support (CLS) part of their business. But we also found similar problems in the lack of an overall integrated approach to planning - essentially, the business did not have a consistent and coherent approach to Sales and Operations Planning (SOP).
Complex and costly IT
Although a range of higher priority issues had been found, our review nevertheless unearthed a range of IT problems, including: obsolete and duplicate applications - for example, the business had five different ERP systems; underutilised servers, end-user-devices and peripherals; and poorly architected, unsupported, bespoke mission-critical systems.
Our Solution
At the closing stages of the high spot review we worked with the business leadership to complete the final prioritisation of the transformation work. For example, we advised the business to focus the initial process improvement work on the most complex, high customer-visibility and highest turnover part of the business - post-design services - rather than trying to fix all their process problems in one go. We immediately kicked off two of the work streams where we could deliver “quick wins” - i.e. early financial benefits - and in parallel we jointly spent a further intense period refining the business case for sign off at corporate level. Once signed off, we established the full programme of five interdependent work streams.
Business Process Redesign
We worked with key specialists in the business to map out the full, gory detail of the current, or “as-is”, process for post design services. Our lean process re-engineering specialists worked through this map to remove non-value-adding activities, refine and develop the target, or “to-be”, process, and develop the specification for a new IT system to support the new process. We then worked with the client to successfully procure and deliver the new processes and IT system in a series of phases and sprints.
Strategic Investment - Business Intelligence-led In-service Support
One of our specialist supply chain and enterprise architecture consultants worked with the support services part of the business to define and deliver a new capability which provides proactive, business-intelligence-led support for CLS and other in-service support services.
Data Improvement
The first stage of work was to identify, categorise and prioritise an inventory of the 25 different data problems. These problems ranged from corruptions of a few thousand records to the unavailability, in electronic format, of millions of important engineering data records. The client initially aimed to solve the problems themselves, but we quickly determined that they did not have enough capacity and capability to do this properly. We therefore helped them to specify a requirement and go out to competitive tender for a fixed-price contract to deliver the improvements. A supplier was procured and all the work delivered successfully over 18 months.
IT Rationalisation
The client led and delivered this work themselves as they had the necessary capabilities and capacity, and spending on consultancy would not have been value for money. However, we provided pragmatic enterprise architecture advice up front, to help the client frame and prioritise the problems, as well as the practical overarching programme management for this and all the other work streams, for example, helping to identify, escalate and resolve issues as necessary for the IT rationalisation work.
User Support, Training and Change Management
Again it was appropriate for the client to deliver this important work themselves. However, at various points in the three-year delivery programme we gave advice and guidance on how to take the client’s own corporate business change methodology and apply it practically and cost effectively to produce the desired change outcomes.
Programme Management
The client appointed one of our most senior and experienced consultants to perform the role of Programme Director. He was involved from the outset of the programme, from leading the initial high spot review, driving the development of the business case, through to putting the programme management structure and governance in place. And he led the programme through its most critical delivery stages before handing over the final few months of delivery to one of the client’s senior line managers who is responsible for the future continuous improvement beyond the end of the programme.
Results
The integrated transformation programme we set up with the client quickly delivered tangible benefits. After the first six months of delivery, the quick wins had delivered £300k in savings, and in the second year of delivery £1 million of cash savings were delivered. After completion of the delivery programme the business is on track to deliver the full planned cash benefits of £16million over five years of operation.
The programme has also delivered massive quantitative benefits including two delighted customer teams who worked jointly with the client and Monro Consulting to re-design the new end-to-end processes and design and implement the new IT system. The customer is using the front-end of the new system and has been able to significantly reduce their paperwork and rework, and now has much greater visibility of the post design services pipeline of work.
The client has much better trained and motivated staff across all the areas of process and system improvement, and their strategic investment in the business- intelligence-led support processes and tools has given them an extremely strong foundation for the drive towards the new strategic support supplier - “Triple S” - business operating model which is being increasingly demanded by their main customer, the MOD.
Client Testimonial
“All the work was delivered on time and budget, and to a very high level of quality. We have delivered the target financial benefits and we are delighted with the outcomes achieved. Not only have we delivered major efficiencies but we have also opened up additional market opportunities with our innovative new business intelligence capability.
Monro Consulting deployed a highly experienced and professional team and worked very effectively with me, my fellow directors and all our staff to deliver the programme. The Monro team rolled up their sleeves and worked very collaboratively with our people, to deliver a complex set of important business and technology changes, and also transfer valuable skills to our staff.”
Transformation Programme Sponsor and Divisional Finance Director