At the IFS World Conference in Boston, USA, Nick Ward, Head of Product Management for Digital Services, Civil Aerospace at Rolls-Royce described how the aerospace company servitized its business 20 years ago to sell ‘power by the hour'. He also explained how it now links engine field data with ‘return on experience' insights to optimize fleet management, supply chain and maintenance, repair & overhaul (MRO) service delivery.
This presentation took place before the Covid-19 pandemic began. As the airline industry recovers from this period of unprecedented uncertainty and change, it will be even more important to maximize the efficiency and availability of aircraft, and to optimize maintenance to suit changing operating schedules. Data, digital technology and collaboration will be vital to achieve the best outcomes.
If you've ever flown internationally on a wide-bodied aircraft, perhaps on something iconic like a Boeing 747, Boeing 787, an Airbus A380 or A350, there's a strong possibility you were flown by a Rolls-Royce engine.
We have around 13,000 engines out there in the market. Twenty years ago, Rolls-Royce pioneered a new relationship between original equipment manufacturers (OEM) and airlines under the TotalCare trademark. TotalCare works by offering a flat dollar-per-flying-hour rate to the airline that covers all the engine maintenance costs. Fundamentally, it transfers cost uncertainty from the airline to Rolls-Royce.
This was revolutionary because, for the first time, both the operators and the OEMs were incentivized by exactly the same thing — keeping the aircraft flying and earning revenue — and it was incredibly successful. 20 years ago, we had around 5% of the wide body aircraft market. Today, if we take our firm orders into account, we have over 50%. We had to embrace digital, because the way that we manage that risk, is to get very good at forecasting it.
Today, we're moving onto a new, digital-centric generation of TotalCare. We call it the IntelligentEngine. The IntelligentEngine is a form of cyber-physical services where the physical engine, the services that surround that digital engine and our digital capability are indivisible. The IntelligentEngine is connected by data. It is contextually aware of its own operating conditions, the environment it's flying through, the rest of the fleet and it is comprehending in a way that it can make smart decisions to maximize availability while minimizing maintenance costs and disruption.
The way this comes together is through a program that we created about three years ago, called the ‘Blue Data Thread'. Imagine a thin blue thread connecting every Rolls-Royce powered aircraft, every airline operation, every maintenance shop and every factory. That thread is humming with data. Information flows in both directions making the whole operating chain smarter. It starts at the aircraft and it starts at the airline too as a seamless automated plugin to airline operations. It's an airline back office if you like with ‘TotalCare inside'.
Performance and engineering information is exchanged with Rolls-Royce and used within our digital twins. But the airline is in control of that data, because they own it, they decide how they share it and whom they share it with. We use that data to model at the engine, the fleet and the network level. We identify engine health and component lifecycle drivers, we forecast maintenance requirements many years in advance, and ensure that our repair network and factories have the right capability and capacity to meet the needs of our customers.. But above all it's about creating a step change in delivering TotalCare to airline operators. This means more availability, less disruption and fewer maintenance interventions. All of this is free within TotalCare.
It would be unreasonable to ask airlines to share information with us and not reciprocate by sharing information about their fleet back to them. The Blue Data Thread program is about an exchange — a two-way movement of data. We do this using a new suite of applications we call ‘Intelligent Insights' that provides a window to the reliability, health, the remaining life of and the efficiency of engines. Airlines can retrieve that data from within the applications for use in their own digital ecosystem.
We couldn't build this data exchange on our own. We're working with many industrial partners to make sure that airlines stay in control of their data.
When I talk to CEOs and CIOs, they're commonly worried about how to get into the business of digital operations and how they develop the capacity to enter that ecosystem. At this point in time, companies are facing a digital imperative like never before. But you need the data backbone to make that happen. For us, it's IFS software that drives this Blue Data Thread data exchange with our airline customers who are using IFS Maintenix software to manage engineering, maintenance, and supply-chain activities. The Blue Data Thread program identifies significant efficiencies for the airlines through accurate maintenance scheduling and minimized aircraft ‘downtime'. It was a further collaboration with the IFS team that resulted in the IFS Maintenix plug-in through which the maintenance and engineering data could flow. Now a commercial module in its own right, the software is already in use by a number of our customer airlines and we plan to expand this footprint.
Digitalization and servitization are certainly changing our business. Yet, the IntelligentEngine program was not driven by our traditional IT buyers or procurement people. After all, it was not a standard technology or change program. It was about collaborating more closely with our customers and their ecosystems. I looked to build a small number of partnerships with companies that both have a vision in our industry and are expanding their own networks. We all want to make our industry a collaborative data space and for our vibrant ecosystems to flourish.