Keys to Building an Intelligent MRO Organization

by Lauren Bonneau, Senior Editor, SAPinsider

When average people think about airplane maintenance, they might think back to a time when a flight was delayed due to some last-minute maintenance required. But they often don’t understand the larger picture, and everything that is required to make these aircrafts function properly and safely for travel. “Everything” basically fits into three categories: base maintenance (the major and minor maintenance activities that happen when the aircraft is taken out of operational service for an extended period of time), line maintenance (small maintenance activities that are performed while the aircraft is on the ground and in operational service), and engine and component maintenance (ranging from complex maintenance activities, like engine repair, to basic inspections or calibrations).

In aviation industries, such as aerospace and defense (A&D), maintenance, repair, and overhaul (MRO) organizations operate a very complicated framework involving complex travel and transportation (T&T) asset maintenance that can cover land, air, and sea assets. In the SAP ecosystem, the vast majority of aviation-focused companies maintain aerospace assets that involve many different business segments. For example, an airline might operate its own MRO organization to maintain its own aircraft fleet and then might also perform outsourced maintenance services to other airlines. There are also contracted third-party MRO organizations that provide services to the airlines, as well as original equipment manufacturers (OEMs) that provide aftermarket services to maintain the products (airplane engines and other parts) they manufactured.

All these activities need to be planned for, executed, and documented — and in a timely manner — to ensure the airplanes are not only safe for flight but also available to transport the customers that rely on their on-time operation. A&D and T&T MRO organizations have a huge task to ensure asset availability — making sure parts are available when needed, repairs happen quickly, MRO workers are optimizing productivity, and all this is done at the lowest possible cost.

This is where intelligent technologies come into play as digital enablers to help drive data through the value chain to the aerospace ecosystem stakeholders who are demanding more integrated products, more automation of repetitive tasks, and intelligence embedded into their business processes. These digital enablers include technologies for analytics, big data, Internet of Things (IoT), artificial intelligence (AI), machine learning, and digital twins, to name a few.

What Does an Intelligent MRO Enterprise Look Like?

An intelligent enterprise automates and reimagines processes in business models so people can focus on more high-value tasks, which drives down costs, increases profitability, and increases asset availability, according to Johann Schachtner, Industry Solution Manager at SAP. “An MRO organization of the future seamlessly connects the customer experience and operations in a digital fashion — where the system eliminates repetitive tasks for users — and throughout the processes, creates intelligent capabilities within those processes,” he says.

An intelligent MRO enterprise requires a platform that connects business processes end to end with embedded technologies and allows organizations to better optimize the overall system and provide MRO users with recommendations and guidance in certain business problems, according to Frank Klipphahn, Industry Solution Manager at SAP. “From an A&D OEM perspective, another key element to run an intelligent MRO organization is focusing on experience management (XM) to understand your customer, get better connected with them, and collect their feedback, for example, on maintainability of the product,” he says. “The idea is that you can use both experience and operational data to guide business decisions and allow you to collect insights from customers, employees, and the product itself because we are dealing with smart IoT-enabled products.”

Klipphahn says that, in the future, organizations will focus more on the use of IoT, AI, machine learning, and advanced data sciences, like predictive and prescriptive modeling, to anticipate future MRO demand and then optimize MRO resources or processes.

Overcoming Challenges Across Four Dimensions

To reach this future-state MRO enterprise, organizations have a series of obstacles to overcome first. According to Schachtner, to become high performing in the digital age, SAP customers in the MRO industry are confronted with challenges along four different dimensions: relationship, innovation, technology, and people. Let’s review each of these obstacles he highlights in turn:

• Relationship challenge: How do I operate across a business network — outside my four walls — more effectively? “In the end, companies want to increase the value they deliver to their customers, and the only way to do that in a scalable and economic way is to work very effectively with a business network,” says Schachtner. “Increasingly, solutions are now focused outside the four walls, and that’s a big challenge for companies to look at the whole ecosystem, for example, how a third-party maintenance provider can work more effectively with OEMs, or with a customer, and work across those organizational boundaries.”
• Innovation challenge: How do I keep the lights on with one hand and innovate with the other? “The revenue structure in aviation organizations presents a very challenging environment, and the current coronavirus environment that we are in shows how quickly profits and revenues can be affected,” he continues. “And because of its safety-focused conservatism, the aviation industry doesn’t have much latitude to move around. But to remain competitive, organizations must innovate, venture out, and try new things. So it’s a balancing act of how to manage polar opposites — the ability to act radical but also be very rational in how they execute.”
• Technology challenge: How do I deploy new technologies in a scalable fashion without disrupting my core operations? Organizations are challenged to create a solution environment with a stable core solution that allows them to perform the bread-and-butter functions for the MRO industry, but also with the ability to deploy and innovate without disrupting that core,” says Schachtner. “There are many new technologies such as drones, robotics, and 3D printing, among others, to consider.”
• People challenge: What new skillsets do I need to employ to manage my assets optimally? “The new generation of assets, which are a lot more automated, mobile, and use big data, require new skillsets, such as data science skills,” he adds. “Also, the new generation of workforce is not happy with the old green screen we had in years gone by, and workers want a more modern experience in terms of their solutions.”

While some aerospace engine OEMs have been recognized for being ahead of the curve for their work in the industrial IoT space and providing products as a service, OEMs nonetheless face a big challenge to prepare for the new market environment that demands information as a product or “digital value-add services,” which means using data collected from different systems (including big data and IoT) and exchanged on digital commerce platforms.

“Creating additional capabilities through intelligent technologies to streamline the maintenance execution, cut turnaround times, and decrease process costs will put MRO organizations in a better position, but customers expect more delivery in performance-based services, which means they pay only when a product performs according to contract specifications,” Klipphahn says. “So to be successful in this market, OEMs have a huge risk/reward challenge to make a profit while also delivering on customer expectations. We believe that intelligent technologies will enable OEMs to be much more profitable and efficient in delivering these performance-based contracts into the future.”

Another challenge facing the aftermarket segment is the pressure to focus on diversifying portfolios and creating new revenue streams, according to Klipphahn. “There’s a changing business model that demands OEMs leverage the data they collect with IoT technology, for example, to upsell new advanced services,” he says. “So anything MRO organizations can do to leverage the information they collect and commercialize that data will be a differentiator.”

Examples of How Intelligent Technologies Are Setting MRO Organizations Apart

Embedding intelligent technologies into MRO processes in the A&D industry can dramatically improve the customer experience and automate previously manual processes. Take, for instance, the request-to-service process when an airline sends an engine to get repaired. Using AI technology, the individuals performing the service can interact with the system to get direct answers to questions around the maintenance activities they need to perform.  For example, the workscoping app within SAP Enterprise Asset Management, add-on for MRO by HCL for SAP S/4HANA, provides intelligent workscoping proposals based on the condition of the asset. Colin Breakwell, Global Head of SAP MRO Products at HCL Technologies says, “Optimizing the workscope of a maintenance event through the use of intelligent logic and additional data sources can significantly contribute to the profitability of performance-based service contracts.”

For the plan-to-fulfill process, while that aircraft is being serviced, drones can perform inspections so that individuals can avoid high-risk activities, such as crawling around on the fuselage. Organizations can use connected 3D printing, machine learning, and AI technologies for defect tech analytics and parts image detection. When a defect is found, a technician can interact dynamically with a conversational bot to support the process. And they can use virtual and augmented technologies such as wearables — for example, glasses that overlay work instructions step by step and can connect to other experts to collaborate on solutions, such as with a Skype call. And they can use 3D printing to create replacement parts.

For the maintain-to-settle process, there are many back-office functions that can be improved with intelligent technologies, such as using machine learning capabilities to manage costs or execute contracts smarter. Introducing automation in this process can help manage liability, risk, and compliance as well as provide a view into the total cost of maintenance, which can save money and increase asset availability.

For the component maintenance process, the end-to-end process can be completely reimagined to rely heavily on integrating intelligent technologies with applications such as SAP S/4HANA, SAP Fiori apps, and SAP C/4HANA. This could start by using machine learning for image recognition by using a mobile device to take a picture of a broken component, for example. The system then would automatically identify the exact physical part and its condition and start root-cause analysis to understand what caused the failure and even trigger follow-up activities. Embedded technologies here could propose certain cross-sell services for parts typically offered in these types of situations, could connect users with experts to gain instant knowledge, or could provide more context information via chatbots. For example, a chatbot could query demand information on a specific spare part needed to automate the sourcing process for spare parts — the demand sourcing app within SAP Enterprise Asset Management, add-on for MRO by HCL for SAP S/4HANA, provides precise contextual information into available serviceable parts. “Sourcing the right part for a maintenance demand is critical for the successful completion of a maintenance event, however, determining the right part is not that easy,” says Breakwell. “Availability, location, cost, condition, contractual terms, and ownership are some of the multiple dimensions for making the appropriate decision, and the HCL sourcing solution brings intelligent algorithms to help the user interpret this mass of data and make the best decision for the MRO organization and its customers.”

One of the most important and promising embedded technologies in the A&D industry, according to Klipphahn, is machine learning. He says that MRO organizations could use it to streamline the entire handover process through the different phases of the product life cycle to support maintenance engineers with recommendations on how to engineer the maintenance tasks. In the areas of quality and reliability engineering, they can apply intelligence to the detailed insights collected regarding a product’s history to identify nonconformance drivers, for example. They can combine the IoT data collected to monitor and predict asset health with additional business information, such as financial data, to understand how to improve maintenance schedules or optimize resources. Another huge potential for machine learning in the MRO space — where tons of information is captured in text format — would be to use smart text analysis to detect hidden patterns, for example, in historic maintenance documents.

“Another example is augmented reality, which according to some research we have done, roughly 75% of A&D manufacturers, over the next two or three years, will provide MRO service teams with access to consume searchable video content, for example,” says Klipphahn. “That’s a major trend because we see that MRO specifically has huge potential for augmented and virtual reality application. Technicians and field-service or shop-floor workers using mobile devices to support tasks can be provided with additional context on the product data or job instructions to completely streamline these processes.”

According to Breakwell, delivering a paperless, intelligent, shop floor is a key enabler to increasing a technician’s spanner time. “The clear aim is to support the technician to perform the defined activities in the most efficient way possible while still recording all of the required business data in real time,” he says. “A true paperless shop floor will allow technicians to access the information they need through a range of different channels — perhaps starting their day with a WhatsApp chat learning about the day ahead, arriving on the shop floor using smart devices to view work details, and then finishing a task by recording findings, comments, time, and sign-offs on a simple mobile app. SAP Enterprise Asset Management, add-on for MRO by HCL for SAP S/4HANA provides a range of capabilities and user experiences to support the move to paperless shop-floor processes.”

Advice on Where to Begin

Many MRO organizations are at the point today where they are looking at how to revitalize their core set of solutions, mobilize their workforce, and deploy embedded technologies in their daily operations, according to Schachtner. But at the same time, they need to enable innovations — such as real-time business analytics and big data — to focus on advanced planning and prediction, bring together a lot of disparate data sources across the ecosystem, and leverage this data to make intelligent decisions. “It’s not first revitalize the core, and then think about innovation after that’s done,” he says. “Rather, organizations should run both in parallel to be able to compete in the modern day and age. You want your core solutions stable with minimum modifications and add-ons to that core SAP S/4HANA solution. And in parallel, regardless of what core solution you are running today, start to innovate using SAP Cloud Platform to extend your solutions, bringing all these new intelligent capabilities to bear. Nothing gets thrown away. Once you move to SAP S/4HANA for your core, simply switch over those innovations.”

On the OEM side specifically, MRO organizations have a unique opportunity to set themselves up in the business and grow to become total lifecycle owners, meaning they own the actual product end to end, according to Klipphahn. “And once they have established a strategy to position themselves as an end-to-end lifecycle owner, then they can find individual initiatives or projects to apply intelligent technologies for quick wins with component maintenance, chatbots, or image or text recognition,” he says.

As a starting point, Klipphahn and Schachtner both agree that where each MRO organization should begin depends on their particular pain points and line of business, but even though the starting points might be different, the crux is to make embedded intelligence a part of the business process and scale that through the organization. And to do that successfully, and in a scalable way, involves sharing data.

MRO organizations need to think beyond just connecting with products and focus on how to connect with business partners, customers, and suppliers. Historically, the different MRO segments would sit on their own isolated maintenance information, which prevents having a single source of truth. “When people don’t want to share data, because they want to hang onto it to get commercial gain out of it, for example, then they struggle,” says Schachtner. “That’s a big problem in the MRO industry and one area where we can start clearing away those hurdles with data orchestration.”

For MRO organizations such as airlines that operate disparate fleets, there are two schools of thought when it comes to data platforms. The first is to create a central data lake to keep the data inside the organization. The other is to create a federated data environment to connect to multiple data sources throughout the ecosystem. The second option is much more in line with the idea of data sharing. Having one platform where all the data is pulled together and information is exchanged securely not only provides a single source of truth around MRO, configuration, and certificate data but also sets a foundation on which organizations can start building smart solutions.

There’s a variety of technologies that could help facilitate the data exchange between the different players, and as a result, help to create a better offering in terms of MRO services. Blockchain is one example of a technology that can help MRO organizations exchange data across companies. SAP Data Hub is another offering that helps to orchestrate and facilitate data models across different business partners and systems. To see an example of analytics-empowered airline operations in action, consider the German federal government-funded research initiative the Ops-TIMAL project. This project, which SAP is part of the consortium working on it, created a prototype of a data orchestration platform, connecting partner systems through SAP Data Hub to optimize operations and using SAP Predictive Maintenance and Service to predict maintenance issues.

Get the Most Out of Your MRO Data

With 86% of enterprises claiming that they are not currently getting the most out of their data, according to “Data 2020: State of Big Data Study,” MRO organizations are motivated to meet customer expectations and infuse intelligent technologies. The path to become an intelligent MRO enterprise starts with revitalizing the core — adopting an end-to-end platform that connects a variety of intelligent technologies — while at the same time innovating with the embedded technologies in a way that makes sense for your MRO organization in your sector of the industry. To learn more about how A&D businesses can maximize MRO data using intelligent technologies, have a look at this white paper, and for more information on the A&D industry in general, visit here.