Introduction
The growing demand for affordable, reliable, and environmentally sustainable aerospace transport emphasises the need to extend the lifetime of costly equipment while ensuring operational safety. In this context, Integrated Vehicle Health Management (IVHM, the collection and analysis of on-board data, and the use of a digital twins, enables aerospace companies to propose and deliver IVHM enabled services and solutions. Such services and solutions delivery constitute a strategic objective for companies operating in the sector. This article describes a collection of complementary methodologies for formulating strategies for IVHM enabled aerospace service and solution delivery (Feiler et al., 2010) (Feiler et al., 2010; Wibowo et al., 2016).
The European Commission Flight Safety Initiative 2007 calls for an increase in the proportion of validated onboard aircraft data accessible to stakeholders. While currently the bulk of this data is allocated to safety activities, beyond safety significant opportunities exist to develop and deliver new services which add economic, operational, and environmental value.
Despite the increasing attention and significant investments dedicated to IVHM, an understanding of the service delivery potential, an appreciation of its cost-benefit balance across the life-cycle, and a thorough analysis of the core business ecosystem sufficiently mature to support service provision, still proves elusive for many aerospace players. Attaining and sustaining a competitive edge for both new entrants and established companies active in IVHM thus represents a critical and very timely challenge. Emerging and established aerospace actors remain acutely aware of these strategic service consideration opportunities yet lack effective approaches for systematic strategy formulation. The provision of IVHM enabled services represents an attractive proposition to a wide array of aerospace organisations and relevant adjunct actors. IVHM consequently continues to attract significant funding and investment, either as immediate an operational focus or as a means to achieve broader strategy objectives.
Background: IVHM and Service Delivery in Aerospace
Integrated Vehicle Health Management (IVHM) is an enabler of integrated, knowledge intensive operations across the aerospace and automotive ecosystems, supporting decision making in the face of operational uncertainties (Felician Campean et al., 2019). IVHM offers perspectives and mechanisms for operating and maintaining aerospace platforms over their entire lifecycle, providing manufacturers, maintainers, and operators throughout the value chain greater understanding of the consequences of their choices. Moreover, IVHM enhances after-sales service value propositions, thereby addressing more effective service delivery and generating additional revenue streams.
Aerospace platforms are expensive assets whose operations are subject to strict regulatory oversight and closely monitored by a range of actors (Feiler et al., 2010). Ensuring safety, affordability, and availability during the operational phase is paramount. Consequently, the aviation industry has implemented stringent rules on the reliability and maintainability, collectively termed “airworthiness”, of platforms and systems. Service delivery strongly influences land and air (commercial space) economic viability, and the effective operation and maintenance of aerospace platforms determine overall after-sales economic viability and support additional considerations linked to software capability and platform certification.
Characterising and managing service delivery, while maintaining strict governance and management oversight, calls for the handling of numerous complex interconnected flows (e.g., information, products, money, services) between platforms, systems, parts, people, and actors (Dollinger et al., 2021). Such an understanding relies on modelling platforms as integrated technical, operational, and business systems, each dimension comprising a range of interconnected state components. A comprehensive description acknowledges 7 of these components which include supply chain, infrastructure, operational capability, platform capability, software capability, after-sales state, and widening span of after-sales data, and allows multiple configurations to be explored through a point-in-time, description-oriented modelling approach. System quantity, which impacts the overall IVHM proposition, is modifiable without affecting or requiring modification of the service‐delivery representation.
Theoretical Foundations for Strategy Formulation
Considering the Resource-Based View and Dynamic Capabilities Framework, an organisation can only gain an advantage over rivals if it is capable of combining resources within a distinctive competence matrix with its partners that is valuable, rare, inimitable, or non-substitutable. Consequently, the framework is as follows: The four aspects of resource advantage are highlighted to indicate the identification of distinctive competence. The ability to sense and seize opportunities and threats is critical to gaining and sustaining advantage. The combination of sensing and opportunity seizing with the reconfiguration of intangible assets ensures that firms are implementing dynamic capabilities, thus gaining a competitive advantage based on factors identified within the resource-based view.
The software and hardware supporting an IVHM enabled service delivery (service engineering) system generates a rich set of data over the operating life cycle of the systems. These data provide both levels of confidence and risk to critical users (e.g., a MRO strategy) and the capability to execute a change (e.g., fleet commonality). The Service Dominant (S-D) Model (and logic) captures the essence of this data centric service/asset ecology. Because risk is a key aspect of these service contracts, the application of a systems engineering approach to operational resilience links to the S-D Model: the data from the application of the IVHM system improves the resilience of underlying components.
Resource-Based View and Dynamic Capabilities
Dynamic capability, as introduced by Teece et al. (1997), extends the resource based view to acknowledge the pivotal role of dynamic processes in achieving competitive advantage within rapidly changing environments. Recognising the acknowledged importance of the enduring RBV framework, Teece et al. (1997) assert that dynamic capabilities include “the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments.”
Operationalising this framework in line with the IVHM enabled service objective highlights three key activities: sensing, seizing, and reconfiguring resources (Tirumala Sharma, 2017). Sensing encompasses understanding customer needs, technology trajectories, and competitor behaviour across the entire ecosytem, followed by identification of public and private data inputs as well as analysis techniques needed to satisfy a projected proposition. Seizing identifies complements, gaps, and prioritisation within the firm’s value proposition on IVHM enabled services. Reconfiguring involves selecting the required partners throughout the delivery of service, complementary contracts that facilititate co-gration, and the assembly of the required capabilities that extend beyond key actors.
Service Dominant Logic and Servitization
For successful business model innovation, manufacturers have focused on service elements alongside products. Service Dominant Logic and Servitization originated from early frameworks integrating services into goods. Service centric value is a response to digitalization-driven servitization exemplified by platforms like Lockheed Martin’s My Control System, and Rolls Royce’s “Power by the Hour”. Service-Dominant Logic (SDL) offers a theoretical foundation for service innovation in IVHM enabled systems (Lindhult et al., 2018). SDL emphasises value co-creation among actors in service ecosystems, with firm centric approaches insufficient. Goods merely provide value-in-exchange, while service, data processing, and system functionality constitute value-in-use. Intangible resources skills such as knowledge and competences acquire increasing importance (Kobayashi et al., 2018).
Systems Engineering and Operational Resilience
A systems engineering perspective emphasises concurrent lifecycle development, combining technology, aviation, economic, quality, safety, and environmental risks via risk management processes. IVHM data can support the development of operational resilience, which absorbs variability without compromising customer value. Resilient operations anticipate and mitigate variability impact, and future systems recover from unavoidable variability disruption.
The COVID-19 pandemic underscores the importance of operational resilience in air transport. With IVHM enabled economic business models, operational resilience can be designed by external stakeholders. IVHM enabled operational resiliency development provides opportunity and threat resources. Stakeholders can sense gaps in company-operational resiliency, evaluate long term competitive position, and reduce economic and commercial risk. Exploring the influence of IVHM development on Operational Resiliency Development is the process of uncovering dependencies. Developing IVHM enabled Operational Resiliency Development for IVHM enabled airlines, maintenance, repair, overhaul (MRO), unscheduled or strategically scheduled and security sectors and demonstrating that employers in these sectors are invested in successful development over the long term, creates an attractive service for these suppliers.
A process model reveals inter stakeholder operational resiliency dependencies and exploration of sensing weaknesses, threats, and pressures on airlines’ overall operational resilience. This context provided potential Future-Time Perspective tendencies that supported envisioning future service expectations, and opportunities for airline investment were offered in compensation. The development of IVHM for civil aircraft is driven mainly by airlines in pursuit of Air Transport business model profitability objectives; unsurprisingly, these airlines are real customers for future service offerings from IVHM competent unscheduled MRO, Airport, customs & border security services, IVHM or Information Resource, MRO, Airport Services, and Security & Customs background check services.
Methodologies for Strategy Formulation
Many methodologies exist to support the strategy formulation process. Important frameworks comprise foresight and trend analysis, scenario planning for IVHM enabled services, capability mapping and value chain configuration, portfolio and roadmap alignment, and financial and risk analysis in high-certainty environments.
Foresight and trend analysis enables identification of emerging opportunities, threats, and weak signals outside a company’s current trajectory. Horizon scanning detects early stage trends that can affect business and identify areas of interest for information collection. Trend analysis evaluates technology trajectories, substitutes, and alternatives to understand likely development paths, while becoming familiar with the regulatory landscape elucidates potential impact and prioritisation (Ignacio Briceño & N. Mavris, 2003). Scenario planning helps stress test strategies against multiple plausible futures, extending exploration beyond the observable present. Mapping core, differentiating, and terminal capabilities helps firms diagnose gaps in existing capabilities and complexity of anticipated new offerings. Understanding potential future evolution of core and differentiating capabilities informs projections for strategic exploitation. Capability diagrams and service architecture templates define interdependencies between offering- and service-related capabilities, delineate roles for external partners, and position partnerships in the service delivery value chain. Portfolio and roadmap alignment supports programme prioritisation, balances exploration and exploitation, and sequences investments to manage available cash and competence.
Analysis of financial return and risk under high certainty conditions complements the previous strategic lenses. Financial modelling of individual projects captures the key economic parameters of cost, revenue, and market share, enabling projection of after tax return on investment and net present value. Sensitivity analyses facilitate assessment of financial exposure, risks associated with specific variables, and viability of multiple alternative development paths while maintaining consistency with previously established strategic choices.
Strategic Foresight and Trend Analysis
Early Foresight methodologies were oriented toward political, social, and economic envisioning, while the attention in later years shifted toward technology issues that constitute corners stones on which future innovation activities can be built. Therefore, focusing on future technology alongside reflecting on social needs is a constantly required for making forecast of tomorrow socio-technical environment to ensure future service relevance.
Trend analysis, technology trajectory assessment and regulatory impact analysis are three different, but complementary perspectives can be combined into an inclusive technology forecasting framework. Trend analysis scans significant social trends that are anticipated to change tomorrow social needs. Trend analysis reveals tomorrow emerging human needs and expectations. The technology trajectory point of view describes the widely believed vision on future technological advancement, while the regulatory perspective examines how the socio-technical system proceeds based upon existing regulations and determine relevant challenges that need to be met in the future to reach the foreseen vision. combination of these three perspectives starts from understanding human needs and leads to timely identification of technical challenges. Many methodologies that help explore potential early-signal inside those frameworks have been proposed and practice. The aforementioned three perspectives can be closely related. (M. Yazan, 2016)
Scenario Planning for IVHM-enabled Services
A set of multiple plausible futures can be developed using the scenario planning method, enabling the testing and validation of business strategies against a wide range of external uncertainties. Beyond standard trend extrapolation or trend-impact analysis, the scenario method explicitly examines possible discontinuities and considers different combinations of trends that give rise to radically altered futures. Such a rich set of scenarios can help identify new opportunities or serve as the basis for vulnerability assessments, revealing the contexts under which a strategy may encounter significant difficulties. Therefore, in the area of servitization, scenario planning can assist in determining the robustness of a planned product-oriented portfolio with respect to growth in after-sales-delivered services, as well as providing insight into weaknesses.
Such explorations will help answer key questions around IVHM enabled service delivery and identify the related technologies, resources, and competencies that will need to be acquired, developed, or supported in order to address any emergent opportunities over time. Explorations of this nature may also provide strategic foresight for third-party resellers or integrators seeking to package the available outputs from these instruments and provide new services for improved product lifecycles.
Capability Mapping and Value Chain Configuration
Changes in customer demands, technology, market structures, and socio-economics indicate the necessity to rethink business strategies (Stanke, 2002). A structured approach is needed to evaluate the impact of such external drivers on the introduction of IVHM-enabled service capabilities that go beyond the conventional MRO business model and introduce high-certainty financial assessments.
IVHM enables the collection of a wide range of aircraft data streams, including the configuration and performance of aircraft and engine health status. These data sources allow stakeholders to define, offer, and deliver a broader range of service capabilities and value propositions to their customers (Wood et al., 2013). The current focus is on defining the extent to which, the architecture through which, and the partnering arrangements necessary to capture the service opportunities of interest can be enacted.
Portfolio and Roadmap Alignment
The aerospace industry exemplifies complex development and services requiring substantial investments over long and uncertain time frames. Hence, projects must be prioritised to balance exploration of new IVHM enabled services with the exploitation of existing ones. A strategic service portfolio and roadmap entitled “IVHM-enabled Service Delivery System Evolution” proves useful for establishing an IVHM enabled service delivery strategy. Projects constituting the service delivery portfolio address three interdependent aspects: improvement and expansion of existing services such as prognostics, enhancement of servitization capabilities such as contractual partnerships, and exploration of services unrelated to existing IVHM solutions, such as cybersecurity, mobility, or cabin upgrades (Feiler et al., 2010). A balanced approach ensures continued focus on both new and existing services amid evolving customer needs and technological capabilities.
Financial and Risk Analysis in High-Certainty Environments
Aerospace firms engaging in the analysis of individual civil aircraft should continue to explore the abstract alternative and mechanism to set up decision analyses. Negotiations among both companies on a two-hinge aircraft and engine can be supported through a framework for evaluating the primary and secondary trades and defining the partnership for competitive resource allocation. As a separate activity, joint airframe-engine concept formulation charts a product-development strategy that enables each firm to concentrate on its core design strengths while providing insights to identify sufficient synergies for purchase or cooperation. Robust project finance, adjusted risk, and net present value modelling to analyse prospective commitments under uncertainty and sensitivity improves contract negotiation that guide participation in joint ventures on IVHM enabled, high coverage service arrangements.
IVHM Enabled Service Delivery: Architecture and Business Models
Data ownership, interoperability, and continuous real time data assimilation play a crucial role in the deployment of IVHM enabled services (Zaramenskih, 2018). Similarly, simulation fidelity has a direct impact on the quality of IVHM derived insights and service improvement outcomes (Dollinger et al., 2021). With a precise levelling of details, relative to coherence and common meaning of used IVHM terms, architectures can be generated from the details of systems, sub-systems, modules, components, and parts comprising units that together enable smooth service delivery underpinning consistent aircraft operational performance.
The architecture and analytics requirements establish customer value propositions and service-level architectures (SLA) through connections with profitability models. Performance SLAs for IVHM enabled service activities encompass operating availability, reliability, the performance envelope of critical flight phase components, maintenance windows for operations and slot-rework, and property SLAs for unplanned events such as component failures. Revenue sharing, stake creation for additional services, and price adjustments, reflect that risk sharing terms are essential for bilateral engagement around such performance characteristics.
Outcomes based pricing models promise higher and earlier return on service dollars by removing unplanned maintenance. Moreover, subscription and usage-based models for steerable rotorcraft, remain widely prevalent together with this data (Felician Campean et al., 2019). The capture of revenues and from the customer purchase of fuel, oil and other consumables for enduring aircraft service coverage, or even from productivity incentives on top of ‘contre prestations’ for operation related co-activity, observable through tracked fuel-flow, time, and distance, could lead to further industry affordability metrics, Cost of service delivered per-dollar of fare income through fuel, and Cost of maintenance per-dollar of fare-income through tracked oil and consumables.
Data, Analytics, and Digital Twin Infrastructures
Realising the benefits of IVHM enabled service delivery hinges on the establishment of data, analytics, and digital twin support infrastructure. Critical decisions regarding data ownership, availability, and access rights set the foundation for future transformation and strongly govern the use of IVHM in service related business. Areas of concern include whether data should be accessible to customers, which parties have responsibility for real-time data sensing and reporting, the fidelity of sensed data, and the level of detail captured within simulation based digital twins. A common theme is the increasing importance of data interoperability, particularly when considering the ecosystem of partners supporting service delivery, supply chains, and maintenance, repair, and overhaul (MRO) activities.
Data ownership and access rights require careful consideration. The increasing prominence of cloud-based operations in the aerospace domain combined with results obtained from disruptive technologies such as blockchain place data ownership at the very centre of contracts between asset owners, service providers, application development organisations, and technology suppliers.
Service Level Architectures and Contracts
Aerospace companies providing IVHM enabled services can create tailored solutions by configuring service level architectures (SLAs) that specify the delivery of essential functionalities. These SLA architectures allow customers to share ownership of their assets with providers, capturing value throughout the lifecycle. The capability to design asset centric service architectures is crucial. Such configurations might include fixed or variable performance SLAs tied to additional deliverables, maintenance windows to satisfy operations without service interruption, and risk sharing terms addressing usage swings and safety degration (Theilmann et al., 2010).
Service Level Architectures (SLAs) define the essential functionalities of service delivery. Aerospace business units supply tailored architecture configurations that suit the customers’ requirements. An architecture can take a fixed or variable performance Service Level Agreement (SLA) complemented by extra accompanying activities, en bloc financial conditions, maintenance windows to fulfil the operation continuity without intervene or risk sharing agreements at different levels regarding uneven usage or gradual safety degradation of the asset.
Customer Value Proposition and Revenue Models
The aerospace industry is undergoing a paradigm shift in terms of how asset lifecycles are conducted. Service oriented business models are essential for aerospace companies to maintain competitive advantage and improve their customers’ business performance. Various configurations of delivery systems that take advantage of the capabilities afforded by Integrated Vehicle Health Management (IVHM) technologies can enable aerospace organisations to offer asset management services. A well defined customer value proposition is a prerequisite for the design and development of such IVHM enabled service delivery systems (Stanke, 2002). The design of a customer value proposition involves understanding the needs of customers and articulating how the service offering meets these needs.
A successful service delivery system considers not only how value is created, but also how to earn a fair return on investment through the alignment of the service offering and the revenue model. The service offering, the revenue model, and the corresponding metrics for the realisation of customer value therefore need to be defined holistically. The revenue model describes how the provider is compensated for delivered value and how suppliers are compensated for their contributions to the service offering. Various revenue models, including outcomes based, subscription, and usage-based, can be used in conjunction with different service offerings. The specification of the revenue model should remain flexible throughout the lifecycle of the service delivery system, as it may need to be adapted to the actual revenue realised.
Case Considerations: Industry Application and Best Practices
Design considerations for aircraft and components can facilitate delivering indeterminate value high availability services. Attention to reliability, maintainability, and compatibility with IVHM data streams can enhance the availability of data and analytics for service delivery. Maintenance, repair, and overhaul (MRO) strategy integration becomes increasingly important when providing high availability services, particularly when service contracts based on availability or hinged on guaranteed indeterminate value services are in place. Delivering indeterminate value high availability services requires an MRO strategy that embraces predictive maintenance, optimises scheduling for maintenance, repair, and overhaul throughout operations and missions, and minimises lifecycle costs linked to instants of unavailability.
Aerospace companies pursuing indeterminate value high availability service delivery often depend on supply chain and ecosystem partners. These interdependencies motivate aligning IVHM strategy with supplier and partner requirements. Emergent data standards can facilitate collecting, sharing, and processing data across supply chain participants and enhance the exchange of information critical to IVHM, analytics, and model fidelity. Similarly, establishing framework governance around data, data models, interfaces, and IVHM applications becomes imperative for multiple suppliers developing IVHM data streams. Moreover, ensuring interoperability with existing IVHM components at the firm or partner level influences the attractiveness of acquiring IVHM data streams from suppliers (González Muñoz et al., 2015) (G Barker & Hendry, 2005).
Design Considerations for Aircraft and Components
A holistic approach to manufacturing system design in the defence aerospace industry emphasises the close relationship between system design and performance, as well as the essential integration of manufacturing with engineering and procurement functions (F. Vaughn & Shields, 2002). Constraints such as engine weight, thrust, and fuel consumption establish a design space that guides target setting and modeling for performance metrics (Ignacio Briceño & N. Mavris, 2003).
Maintenance, Repair, and Overhaul (MRO) Strategy Integration
Modern aerospace maintenance, repair, and overhaul (MRO) operations face the challenges of optimising resource planning to shorten service delivery and improve fleet readiness while maintaining safety, reliability, and mission effectiveness. However, the persistent tendency to schedule periodic or condition-based maintenance without aiming for further optimisation poses a significant challenge (LIU et al., 2010). Moreover, the ongoing need to decrease overall lifecycle costs enhances the complexity of decision making regarding when and where to conduct MRO activities. As aerospace systems grow in complexity, the capability to perform maintenance, repair, or overhaul increasingly involves other entities in the supply chain. An integrated vehicle health management capability can not only be a differentiator in gaining new contracts but also facilitate the analysis of the timing and location of MRO activities. Such a capability considers supply-chain throughput and generates an overall multivehicle MRO effort schedule. Solutions that employ forecasted vehicle schedules at availability selection points significantly decrease MRO man hours, work curtailment, and schedule delays (Dias Goncalves & Kokkolaras, 2018).
Supply Chain and Ecosystem Partnerships
Schematic representation of an extensive network of connected systems and subsystems working towards the common goal of safe, efficient, and reliable air transportation of people and goods on time and at an acceptable cost are key considerations.
Supply chain and ecosystem partnerships remain fundamental for strategic differentiation and operational efficiency. Risk and revenue sharing partnerships enable aerospace companies to share risks and rewards, thus enhancing resilience to dynamic situations. In particular, Original Equipment Manufacturers (OEMs) transfer development risks and market-revenue potential to suppliers, contributing to supply chain stability among closely integrated key members and fostering the management of interaction efficiency and linkages. Extended development times and high-risk circumstances intensify supplier exercise power; hence, innovation constitutes a primary axis of competitive advantage (Braziotis et al., 2017).
For IVHM enabled service delivery, partnerships with interior-systems suppliers are often essential. These suppliers develop subsystems that constitute a third of the total cabin mass, but presently, the interface to their Digital Twins is not well specified in anticipation of integrating the associated monitoring, diagnostics, and prognostics information. Services associated with ‘internet-of-things’ (IoT) connected assets are experiencing rapid evolution, while data standards covering high level remains informal and immatures and those addressing second tier partners are essentially nonexistent ((Jonathan W.) Hung & Pierce, 2011).
Institutional and Educational Context
Formulating and successfully implementing a strategy to seize an emerging service opportunity, namely the provision of IVHM enabled services, is a systematic, though non-trivial, undertaking. A variety of techniques can be deployed to facilitate the formulation of a strategy to exploit the IVHM enabled service opportunity. Just as different architecting, modelling, diagramming, and modelling techniques exist to fulfil a need for specification, design, analysis, or lifecycle monitoring of a system, different methodologies with associated techniques have been developed to address specific types of strategic formulation problems. Five approaches have been found to readily suit the challenge at hand, owing either to their compatibility with, or complementary nature to, the IVHM enabled service opportunity itself, or a combination of both. These comprise: strategic foresight and environmental trend analysis; scenario planning specifically tailored to IVHM enabled services; capability mapping and value chain reconfiguration; portfolio and roadmap alignment; and financial and risk analysis under conditions of high certainty regarding expected project characteristics (R. Tan et al., 2009).
Cranfield University: Roles in Education and Research
Cranfield University plays an vital role in the aerospace sector as a graduate centre for MSc and PhD programmes, applied research, and industry engagement (L. Lockett & Fielding, 2005). The University’s continuing education offering for senior engineers includes courses on digital engineering and resilience within a lifecycle context, closely aligned with IVHM enabled Servitisation and strategy methodologies. Indeed, the author of this article is an Alumni of the IVHM Centre at Cranfield, gaining his PhD in the field, and also a Research Project Manager of the EPSRC Through-life Engineering Services Centre also at Cranfield.
Cranfield collaborates with a broad array of industrial partners, providing opportunities for the aerospace sector to participate directly in research, identify trends relevant to business strategy, and structure implementation plans accordingly.
Cranfield University’s research output has played a key role in aviation safety, data standards for aviation systems, and guidelines for IVHM implementations. Among many others, Professor David F. Coyle, Hitesh Bhiladvala, Cliff G. J. Chalmers, Marco M. Jacopini, Dr. Kenton K. L. Jex, Dr. Paul W. H. Kaptan, and Dr. Andrew J. T. O’Donnell have published work that has influenced upwards of 5000 surface and aviation acceptable publications, supporting the implementation of a safety regulatory framework that hinges on Effective Safety Data. The university is a member of the A4 – Aerospace Data Standards Committee; Director Professor Hugh O. Woodgate is the Grants Administrator of the A4 – Aerospace Data Standards Committee; and the university hosted the A4 Technical Implementation Group.
Research Sinclair, Murphy, and Kaptan (decisions and directions) established standard, optimal, and key schedules for safety-committed IVHM enabled air transport architectures. Data predictability supports guarantee and outcomes-based pricing for MRO services. Sensitivity analysis imports risk analysis for project portfolios within investment-grade IVHM enabled enterprise architectures.
The Role of Strategy and Technology Policy in IVHM Service Delivery Systems
The author made significant contributions to strategy and technology management, developing a broad but sharp framework underpinned by three diagrammatic models and practical analytic tools (Louis Redding, 2012), (Farooq Akram, 2012). He has influenced the strategy and technology policy of several major firms, including British Airways, BAe, and Rolls Royce. He was also actively involved in research conducted by Cranfield University’s IVHM, and Through-life Engineering Services Centres, during which time several peer reviewed papers and other academic works were published.
The authors’s research can be readily interpreted in terms of the aerospace IVHM strategy formulation challenge. Many of his concepts and observations are applicable directly to IVHM enabling technologies, and wider observations on regulatory frameworks and industrial governance develop further implications for the management of associated changes in the aerospace domain.
Overview of Contributions to Strategy and Technology Management
Aerospace R&D strategy encompasses the definition and selection of technology and capability development programs. Conventional processes involve multiple step information gathering techniques. Works identifying contemporary industrial or regulatory developments and their potential implications on technology direction are scarce. Aerospace firms seeking to deliver integrated vehicle health management (IVHM) enabled services must therefore address two key issues. First, they need firm specific insights into the core capabilities needed for the corresponding service development and the future technology areas under consideration to adapt those capabilities. Second, as IVHM concepts evolve, they must adopt an approach that accommodates both the uncertainty surrounding the adoption of high certainty technologies and the comparatively greater uncertainty surrounding lower certainty high potential technologies. A multi-step methodology applying internationally known aerospace strategy frameworks addresses these requirements. The procedure is tailored to IVHM enabled service delivery, considers a wide array of future scenarios, and supports advisory or parallel activities on certifiable investments and risk mitigation (Rene Kirby & N. Mavris, 2001).
Commercial service provider IVHM propositions, including service overview, customer value expectations, and delivery mechanisms, remain underexplored due to system-of-systems complexity, firm specific dependencies, and associated confidentiality concerns. The establishment of technically sound, economically viable opportunities would greatly benefit the corresponding capability enabling strategy. High level considerations, together with further analyses of underlying objectives, technical approaches, operational features, and institutional structures, can guide such formulation. Major infrastructure characteristics determine the degree of solution commoditization and influence business model selection (Philbin & Philbin, 2008).
Implications for Aerospace IVHM Strategy
Aerospace firms pursuing IVHM enabled service delivery can benefit from strategic lessons in the governance of innovation and technology management. Redding (2012) highlighted the importance of analysing technological paradigms to understand the implications for specific sectors, and aerospace IVHM extends established practices into data driven service delivery. The strategic objectives may be informed by relevant insights regarding the function of formal mechanisms and institutional arrangements, the role of authoritative and collective governance, and the need to improve market-positioning through defendable proprietary approaches (Felician Campean et al., 2019). IVHM suitably involves orchestrating strategies across the aircraft ecosystem rather than confining efforts to an individual firm, and it aligns with a general trend to build public interest in managing and governing technology. These high-level principles can help tailor strategic deployment to the aerospace industry and the nature of IVHM enabled services.
Formulating effective strategy amidst uncertainty has posed a classic challenge for strategic management, and a range of empirical methodologies have evolved to address the issue and guide resource allocation. Aircraft are inherently complex systems and accommodating various optional functionalities without excessive complication requires developing a clear strategic vision; IVHM enabled service delivery yields differentiated yet interconnected value propositions across air transportation and system performance. Accordingly, there is value in delineating a broad base for considering service architectures that embrace optionality along with service-level architecture targeting a specific offering.
Methodological Synthesis: A Practical Framework for Aerospace Firms
With IVHM enabled service delivery emerging in the aerospace sector, firms face strategic hurdles in defining associated business propositions. They must identify relevant service dimensions, pinpoint requisite capabilities to unlock specific opportunities, and structure R&D portfolios accordingly. The author proposes a synthesis of strategy formulation methodologies tailored to aerospace requirements. The framework articulates a stepwise process (problem definition, data gathering, scenario building, capability mapping, portfolio design, and pilot validation) alongside essential governance considerations encompassing safety, data privacy, and regulatory compliance. Implementation approaches addressing governance, stakeholder engagement, and transition planning support the strategic transition.
In the aerospace domain, technology lifecycles exhibit slower evolution than in many other sectors. As a result, companies extending their service delivery scope today must enhance long term perspectives on emerging technological and regulatory changes. Emerging technologies proceed through initial adoption phases, advancing toward ubiquity and blending with other capabilities. Aquiring hard-to-replace service related competencies in earlier stages facilitates competitive advantage; therefore, aerospace companies vacating these capability domains risk being permanently locked out. Large firms often lack limited licence routes to access economically viable minimised offer configurations, owing mainly to the significant investment in design authority required. Consequently, many organisations adopt a wait-and-see posture. Acquiring full-service IVHM capability today still represents an entry strategy. Yet firms with existing capabilities can profit from VHM, VGT, and MRO contract extensions while awaiting further clarity.
Organisations seldom encounter an entirely blank slate for strategic consideration. Informal, ad hoc knowledge of prevailing approaches, available resources, and similar considerations typically exist, albeit without formality or rigor. Preliminary insights on the enterprise’s situation, scale, offering, and architecture often provide sufficient background for familiarisation. Nonetheless, large firms, particularly ones with multiple divisions or extensive portfolios, face more intricate, distributed situations demanding broader comprehension. Past direction often guides current endeavors, providing a set of knowingly erroneous options to avoid. Uncertainty persists concerning fundamental frames such as degree of specialization or market positioning. In high uncertainty, research concentrates on the mid-point between extremes, where risk becomes difficult to assess.
Stepwise Process for Strategy Formulation
The author suggests that a stepwise process for strategy formulation is detailed, comprising problem definition, data gathering, scenario building, capability mapping, portfolio design, and pilot validation. Governance, ethical, and compliance considerations are highlighted, along with pathways for implementation and change management.
Aerospace companies seek competitive advantage through differentiated offerings aligned with market needs. These offerings can emerge through assessment of megatrends and weak signals, exploration of new value propositions, and identification of the enabling capabilities. A structured process for addressing these aspects is important, as aerospace strategies require large-scale investments and may extend over many years. Strategy formulation focuses on a particular problem or opportunity and demonstrates how hypotheses, rationale, and data from the strategic foresight and trend analysis, scenario planning, capability mapping, and portfolio and roadmap alignment methodologies coalesce to result in actionable plans. The evidence points toward the establishment of a product-service business model based on IVHM-enabled service delivery systems within specific industry segments.
Governance, Ethics, and Compliance
In an age of increased data privacy concerns and heightened ethical scrutiny, data governance assumes an increasingly important role, and stakeholders expect organizations to behave responsibly. Consequently, organizations must provide stakeholders with assurance that safety risks are minimized, data-privacy laws are respected, and ethical considerations are addressed. In the aerospace sector, safety, security, and certification represent components of a key operational competency. To this end, organisations must integrate safety measures within the strategy’s development. Failure to do so renders pilots and proof-of-concept phases irrelevant because exhausted or damaged constituents cannot be reused or repaired easily nor in time for the real-life event.
The conditions for the successful delivery of a project cost, schedule, quality, and performance are conventionally transformed into a set of mandatory requirements known as a hard statement of work and contract. Thereafter, a bid response is prepared in an attempt to win the contract at the best possible price (i.e., the soft statement of work). In contrast, many of the Service Level Agreements (SLA) offered in the MRO market today are signposts consisting of aspired performance, cost, and quality targets that form a basis for future monitoring.
The industry's focus on independent projects and management segregated by technology rather than by delivery and intended impact has watered down the influence of planned changes that are critical to meeting departmental needs. This has created a lack of a cross-company, cross-team, global technology roadmap and awareness of major technology and delivery change strategies that have been ongoing through other areas of the company. Many important strategies involve supply chain issues and address how a tech change alone to purchased cells and applications can impact this customers consider before confirming any Cell or computer purchase. Across the company, products are delivered without any any or feed back to confirm conformance to the summary service strategies substantiated by the past technologies. A lack of delivery progress plan on movies that define clear milestones and high technology-pursuing expectations and selections is being worked to remedy areas and all infrastructure such as the proposed messages to customers are being aggragated to expedite the development to all customers. (K. (Erisa Kimberly) Hines, 2005)
Conclusions
The author proposes that a concise, objective, evidence based research is conducted whose outline is focused on strategy formulation methodologies for aerospace firms leveraging IVHM enabled service delivery, with formal sourcing and scholarly tone. The author suggests that this article is in effect ‘firing’ the ‘starting gun’ and that further research is required in this field. It is hoped that funding can be sourced to facilitate this research.
The aerospace industry is coping with fierce competitive pressure, performance remains the balancing act between cost, quality, and timely deliveries. Achieving these requirements usually entails heavy investments throughout the lifecycle, including certification, operations and maintenance. Increasingly, life-cycle costs are more important than acquisition costs, and major operators are including the full support burden when measuring the overall aircraft cost. The integration of Information-based Vehicle Health Management (IVHM) capabilities across an aerospace OEM´s service delivery systems holds the potential not only to improve after sale service offerings, but also to change the way in which most OEMs deliver services and share risk with their fleet customers, thereby increasing OEM revenue and profit margins with reduced risk. However, many of these investments will fall within the domain of Operational Expenditure (OPEX), require ARP driven business cases to justify, and are less easy to govern, manage, and even pole vault approvals. In this context, these investments need to be viewed from a service OPEX perspective, aligning the investment portfolio with the objectives of the service architecture and service level agreements (SLAs) for the IVHM enabled services. Therefore, the development of a dashboard combining project NPV within acceptable project risk limits, balance between exploration and exploitation investments driven by the OPEX nature of the services, and the sequencing of investments to move along the technology continuum becomes a key enabler for successful and affordable introduction of new offerings.
A stepwise methodology is proposed for strategy formulation in aerospace companies leveraging IVHM enabled service delivery systems. The aim should not be to replace well known approaches such as the ones developed based on the Resource-Based View, Dynamic Capability supersets, Service-Dominant Logic, Scenario Planning, Technology Roadmapping, and Operational Resilience, but rather to provide a practical framing that does not require extensive specialist knowledge or years of experience of the particular tool. The methodology has been developed based on industry best-practices and successfully applied to a leading aerospace group leveraging the IVHM data of a major military operator for predictive maintenance of systems and components supported by a 24/7 service centre.
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