The global Aerospace & Defence landscape has changed over recent years and US / European companies must have an India strategy to remain competitive. Global OEMs and Primes have been selling to the Indian Ministry of Defence and growing Commercial Airlines for many years but the procurement policies have now changed from a ‘buy’ strategy to a ‘buy and make’ strategy i.e. Western OEMs must have a strategy to develop supply chain infrastructure and deploy new technologies into the Indian supply chain if they are to continue selling into India.
This change in market conditions will have a major impact on Western supply chains over the next decade but also offers a significant opportunity for growth if companies react now. Over the past 40 years Western OEMs have moved from large vertically integrated companies by subcontracting manufacturing processes into their supply chains. However as the OEMs now start to transfer order book to India they must overcome multiple barriers as many of the technologies and tacit knowledge no longer resides in their organisations but in their supply chains.
This is the opportunity for US / European Aerospace & Defence companies – identifying constraint processes in the Indian supply chain and finding an entrepreneurial Indian partner that has a strategic fit, cultural alignment, funds to invest, local connectivity and respects the challenges of operating in the stringently controlled Aerospace & Defence sectors.
AeroDNA supports US / European companies to locate potential partners and provides a turnkey service from initial engagement, Joint Venture Agreement and Technology Transfer license through to Industrialisation, OEM approval and Business Development.
Some of the many opportunities for US / European companies to work with AeroDNA are as follows:
- Outsource non-core activity to Indian partner and create new capacity for high margin orders without new cap-ex investment whilst still making a margin on the work outsourced to India.
Secure & Grow Customer Order Book
- If you don’t do this then your competitors will and it will become increasingly challenging to retain existing customer order books as OEMs are defining their strategic supply chain designs now – if you don’t have a strategy for India then you may not be part of your customers’ future plans.
- However a clearly defined route map for India will serve as a catalyst for growth. You will secure opportunities from new and existing global customers that are looking for reliable Western partners that will support their goal of transferring knowhow and order book to the Indian supply chain.
Improve Competitiveness & Differentiation
- Western companies can increase competitiveness on all areas of its business by outsourcing back office and manufacturing processes to its strategic Indian partner – offering low cost scalability which will overcome internal bottlenecks such as CNC programming, tooling design and new product introduction.
Reduce Business Risk
- The Aerospace & Defence sectors are cyclical and therefore US / European companies must mitigate their risk by reducing exposure to a small number of major customers and move its fixed overhead to variable costing. Developing a strategy for India can help with both of these strategies - accessing new global customers focused on India and outsourcing back office / manufacturing operations to offer scalable capacity when required.
Generate Recurring Revenues from Knowledge Capital
- Your knowhow, experience and market knowledge has an inherent value that can generate recurring revenues without significant impact on your day-to-day operations and resources. AeroDNA facilitates technology transfer partnerships between US / European and Indian companies by capturing the skills, standard operating procedures & systems and replicating at an Indian partner organisation. By supporting the process with on-the-job training and technology transfer mentoring US / European companies can generate recurring revenues from technology licenses that are linked to revenue growth of the Indian partner. Alternatively US / European companies can make an equity investment, attribute a value against their technology/ knowhow and develop a successful joint venture with an Indian partner.
For more information please contact Jim Walters at [email protected] or download our ADAPT brochure (Aerospace & Defence Acceleration Programme & Technologies) here to learn how to get started and how we work.