Accenture optimistic about 2024 as AI use grows
It’s a strange time to be part of the aerospace industry, as Accenture has highlighted in its latest commercial aerospace insight report.
On the one hand, the report is broadly optimistic in its outlook for 2024, revealing that the commercial aerospace industry is set to see revenues surpass pre-2019 levels globally.
It adds this will be driven by a surge in long-term demand for both new aircraft and aftermarket services, as has been seen with the combined net-new orders from Airbus and Boeing in 2023 totalling 3,410 aircraft, a considerable improvement on the 986 ordered in 2021 during peak Covid.
The report adds that the majority of industry executives are also anticipating continued revenue expansion over the next one to two years.
Supply and talent issues
However, the good news comes with a note of caution as a number of issues remain to be resolved especially around supply chains and the recruitment of the necessary talent.
While the report shows that those surveyed are becoming increasingly confident that their supply chains are improving, 79% of those surveyed said they are confident their supply chains can deliver the right-quality product on time over the next six months compared to 72% in August 2023, Accenture global aerospace and defence industry lead John Schmidt said the problem was exposed by the pandemic.
He added: “In Covid we recognised the potential risk of having a single qualified source for just about anything. We recognised the risk of having a global supply chain without local options.”
However, while everyone accepts that things must change, Schmidt said it has taken time for new supply chains to be created or found and bedded in.
“The challenge is for existing programmes as finding qualified sources takes time and that time is an investment, not just in the time but in the people needed to do the qualification.”
While UK and Ireland aerospace and defence industry lead Nick Taylor agrees that the supply chain has been a problem he instead argues that finding and keeping talent is the real difficulty.
He added: “The bigger issue is access to talent … how do we access the right talent and move the talent around to where we need it? That’s really what I am seeing as an issue at the moment.”
Schmidt agreed that finding the correct talent has been an issue, especially as many of those working in the industry now have less experience and knowledge than pre the pandemic.
Citing the example of Airbus, which continued to deliver aircraft during lockdowns, versus Boeing which didn’t, Schmidt said there has been a corresponding brain drain among many US companies which is still being felt.
He added: “The US industries let go of workers like crazy and a lot of those workers found other jobs
“Demand is back … but 42% of the workforce has less than five years of tenure with their current employer and that’s scary stuff compared with what was going on before Covid.”
A software saviour
One tool he expects to be used to rectify this situation is AI, which is finally making itself felt in the commercial aviation industry and particularly on the factory floors of the many companies that support and supply it.
Schmidt said AI has already been successfully used in the supply chain for a number of years and is growing in popularity as companies use it to keep not only on top of day-to-day operations but also to ensure they understand future implications for their businesses.
He added the increasing popularity of Gen AI, where you can generate content including copy and images, will make it even more accessible.
Schmidt said: “Gen AI is making it even easier to get access [to the data], you are changing that interface into something that is speaking and diving into it rather than have a machine doing it all off a dashboard.
“We’re also using AI in engineering. We’re getting around 80% of the first draft done before a human then goes in a finish it up.”
Taylor agreed that AI is set to be big news this year and added much of the delay in its use can be attributed to the amount of time it has taken companies to collect the data to create the AI tools that they are now benefitting from.
Schmidt added that the anticipated rise in AI can also help solve the problem of staff inexperience by giving them more support in their roles as companies increasingly focus on manufacturing quality.
He added: “Manufacturing quality is a huge topic in the industry right now and it’s always been a place where we do a lot of our work.
“For years we’ve been trying to work out with clients how to employ technology better and there’s a much keener interest in those advanced technologies and how they can help.”
Taylor added companies are also increasingly focusing on the speed of their manufacturing lines and are looking beyond the world of commercial aerospace to find new ideas.
He said: “They’ll source ideas from wherever they can.”
This is why they both remain positive about the future of the commercial aerospace industry despite some of the issues facing it and will be bringing this optimism to FIA 2024.
