West Midlands-based AE Aerospace is hitting new heights thanks to a winning formula of strategic investment, business model innovation and a relentless pursuit for customer excellence.
With large swathes of the aviation industry still in a tailspin, it would be easy to assume that the supply chain is equally struggling. For AE Aerospace that is very far from being the case.
For them, the problem isn’t a lack of work, but rather how they’re going to fulfil the orders flooding into the factory – not to mention the plethora of innovative projects they’re hoping to get off the ground.
It’s a far cry from where AE Aerospace was just six years ago when a management buyout, led by turnaround specialist Peter Bruch, rescued the business from closure. In the intervening years, the business has achieved an average CAGR of 25%, driven in large part by a string of investments to boost its capability, capacity, quality and efficiency, including in machinery, systems and staff.
Recognising that more space was needed to accommodate a rapidly growing order book, the business moved to its current state-of-the-art factory at Network Park, Birmingham, at the end of 2018.
The subsequent 12 months were spent scaling up its manufacturing capabilities and getting the workforce used to new workflows, team structures and processes.
Everything was in place for 2020 to be a record year. Indeed, January and February were record order intake months for the business. Then COVID struck and the entire industry entered survival mode.
Fortunately, the impact on AE Aerospace wasn’t as severe as others thanks to the bulk of its work at the time coming from defence – a market which has mostly remained buoyant due to ringfenced state spending.
That’s not to say the going was easy but securing its largest order to date, a three year £3.6m contract to supply complex machined components for the A220 Airbus programme, brought a positive end to a turbulent year.
I sat down with Managing Director and Co-Owner, Peter Bruch, to hear what the future holds.
AE Aerospace will be the first UK SME to deploy a 5G private network, with the aim of dramatically improving your productivity. How did that opportunity arise?
Peter Bruch: The West Midlands 5G programme asked the Midlands Aerospace Alliance to identify companies that were interested in exploring what the technology could deliver, and our name was mentioned.
WM5G approached us last summer and since then, the project has taken on a life of its own. The programme is funded by DCMS through WM5G and we now have three 5G-enabled trials [see boxout below] that will improve our productivity, enable a better quality of customer service and unlock new business models and revenue opportunities.
By working with and leveraging the expertise of WM5G, the Worcestershire 5G Testbed (W5G), BT and Ericsson, AE Aerospace is aiming to set the standard in terms of ‘on time, in full’ delivery.
5G on trial
In trialling 5G, AE Aerospace hopes to attain significant benefits, including the ability to maximise machine time, provide more accurate assurance that parts have been machined to specification with increased speed and efficiency, as well as being able to eliminate the need to re-work or replace damaged components impaired in transit.
1. Machine Time Servitization
This trial will see high-quality wireless 5G and a range of sensors installed across the factory floor to enable wireless connectivity between machines, allowing high volume data capture.
The ability to understand production flows and machine time utilisation is what will enable AE Aerospace to offer machine time to its clients.
Peter explains: “This complements our vision to create a ‘Glass Factory’ where customer can see exactly where their parts are in the manufacturing process. By feeding data directly into the digital dashboard, customers are able to influence and even lead, in some cases, our connected workcells. That enables us to start selling ‘machining by the hour’.
“Additionally, the data stream provides real-time condition monitoring for each machine, meaning we can very accurately project when parts will be finished and where there is available capacity or a bottleneck.”
2. Mobile Asset Location & Calibration Tracking
This trial will allow AE Aerospace to provide 100% assurance that its parts have been machined and measured to specification.
Production units have many surfaces, holes and screw threads that must be measured manually with gauges. By RFID tagging all the gauges, their location can be tracked and identified in real-time over 5G, translating to an increase in speed and accuracy of measurement as a result.
3. Product Quality Assurance
This trial aims to eliminate the need to re-work or replace damaged components. By utilising a private 5G network, real-time ultra-high definition image comparison can take place to ensure product quality assurance prior to AE Aerospace shipping out products to customers.
Peter explains: “We manufacture incredibly high value parts in small batch sizes, so the ability to evidence their condition prior to leaving our site will be a game changer. Some of our parts are too large to bring into the inspection area, so having portable, handheld scanning cameras is another benefit the project has brought.”
Were any of these 5G use cases something you already had in development?
Our concept of a ‘Glass Factory’ and using it as a means to offer machine time servitization was something we had been working on, but we knew there were limitations to what we could achieve by ourselves.
Having access to the technology and expertise through this programme will greatly accelerate our vision for the future.
The project really started moving in January 2021, and already a lot has been achieved in terms of creating the network, installing the hardware and cabling across our site, integrating it with our existing ERP software and connecting our machines.
It’s scheduled to run until March 2022 and by then we hope to have fully embedded the infrastructure across every aspect of our operation, then we can start rolling out its various applications.
The other important aspect to this project is that we want to share our experience and what we’ve gained through the process with other SMEs to help accelerate the adoption of 5G technology within the sector. In doing so, we will help support the region’s economic growth, as well as that of UK plc.
Where did your concept for the Glass Factory come from?
A number of years ago, I received an email from Aston University’s Advanced Services Group which outlined what servitization is and how it could apply to manufacturing companies. It sounded like something that could provide us with a substantial advantage in a crowded, competitive field.
The email planted the seed for us to start looking outwards and talking to our customers, rather than always looking inwards at our business. We attended a couple of ASG workshops and explored the various methodologies, but we struggled to crack the servitization nut.
The breakthrough came when someone described how B&Q don’t sell DIY tools and materials, they sell outcomes – a picture on the wall, a new patio in the garden. That’s what their customers want to achieve.
AE Aerospace sells components, but our IP is how we machine components and the expertise we can draw upon. That thinking started us on a journey from selling finished components to selling the means of manufacturing those components and we quickly arrived at the machining by the hour concept, which morphed into the Glass Factory.
How does your machining by the hour model work?
There are three stages to our Glass Factory. The first is allowing customers to view where their parts are in our manufacturing process via an online portal.
The second is providing customers with a level of influence regarding the order of operation. If their orderbook suddenly changes, for example, they can change which parts are produced first independently of us.
The final stage is where customers are in complete control of “their” cell on our shopfloor; it’s an extension of their own facility, effectively.
Having long-term relationships with customers and knowing how many machining hours they require means we can reduce the price per hour, and therefore the price per components. The customer benefits and we have stability in terms of our cash flow and margins; it’s a win-win.
How many servitized cells are currently in operation?
We have three customer-focused cells, we’ve got one support cell, and we’ve got one cell that is 100% working in this manner. We have a roadmap to achieve the Glass Factory and everything we’ve been doing, the new facility, new machines, new technologies, are all stepping stones to get there.
The 5G project is largely focused on your IT infrastructure. What have you done in terms of improving your systems?
We were one of the first to adopt the AeroDNA manufacturing software, and over the past few years we’ve worked closely with ValueChain to develop that software into something that works for us and hopefully, by extension, the wider aerospace SME community.
Last year, we purchased another CNC CMM inspection system and upgraded the software to the latest PC-DMIS. At the same time, we upgraded to Autodesk’s 3D CAM PowerMILL software.
All these systems talk to each other and to our machines and with the addition of a 5G network, we believe we’ll have finally achieved fully automated production and capacity planning.
Growth from within
AE Aerospace was the first company to be accepted on the BEIS funded Supply Chains 21st Century Competitiveness & Growth (SC21 C&G) improvement programme.
Developed by an ADS and SMMT led consortium, supported by industry primes and OEMs, the two-year programme has been specifically designed to focus on increasing competitiveness and improving organisational capability in the eyes of the customer.
Over the next two years, AE Aerospace will be introduced to a set of processes, tools and techniques that will assess its competitiveness and indicate how the business is performing, as well as highlight areas where improvement can and should be made.
Peter explains: “Training kicked off in September 2020 with a session which discussed and defined the differences between leadership and management. This was followed by a session for team leaders exploring the importance of constructive and motivational feedback.
“The three days of training have already opened our team to new conversations and ways of thinking that we wouldn’t necessarily have had before.
“It’s critical that we continually upskill our workforce, the business is evolving so rapidly that staff need to adapt in learning new skills, training to use new machines and getting to grips with the latest manufacturing techniques.
“Our team value the culture we have developed, where learning is for life and there is always something new to discover. With that mindset, everyone is prepared to journey with us on the next stage of growth.”
More information www.sc21.org.uk
*All images courtesy of AE Aerospace