Digital Transformation Strategies for Aerospace and Defense Manufacturing

Author photo: Greg Gorbach and Dick Slansky
By Greg Gorbach and Dick Slansky
ARC Report Abstract


Traditionally, the aerospace and defense (A&D) sector has been a perennial leader in innovation and the adoption of emerging technologies.  Today, the sector is experiencing a constantly evolving digital transformation.  Among the first industries to digitize the design and manufacturing processes, A&D continues to advance the digital transformation across the entire design/build/support lifecycle.

As manufacturers of products that are critical to maintaining global transportation infrastructure, A&D companies have to constantly reinvent business processes and relationships with their expansive global supply chain and customer base and repurpose their legacy IT systems into digital transformation AandD.jpgbusiness and engineering ecosystems.  The digital transformation for A&D is an ongoing exercise in the adoption of the latest technologies, developing innovative products, and making the transition to the next generation of air transport. 

The A&D sector includes both the commercial and general aircraft industry, and the defense sector.  After a year of subdued growth in 2017, ARC Advisory Group expects the commercial sector to strengthen in 2018 and into 2019. Recovery in global GDP growth, stable commodity prices for crude oil (fuel being the single largest overhead cost for carriers), and growth in passenger travel demand will drive this growth.  On the defense side, heightened global security threats, recovery in US defense budgets, and higher defense spending from other major regional powers such as China, India, and Japan will drive the defense sector revenue growth.

Most major companies in A&D, especially in the commercial business, maintain very large order backlogs that extend well into the next decade.  ARC expects revenue growth to remain stable for the long term, and capital expenditures to continue for both product development for next-generation airframes and for the adoption of emerging technologies to support digital transformation.  For decades, A&D companies have been early adopters of advanced technologies such as composite materials, digital mockups, advanced manufacturing processes, and automated production and assembly systems using robotics. Much of this innovation was driven by the need to meet customer (airline carriers) demand for products (airplanes), that represented the latest in technology, while providing the best experience for the flying passenger.


  • Introduction
  • Critical Digital Transformation Initiatives
    • IT Systems:  Business Systems and Cloud Infrastructure
    • ET Systems:  Product Design, Simulation, Engineering
    • OT Systems:  Drive Performance throughout Production Operations
    • Additive Manufacturing
    • Artificial Intelligence and Machine Learning
    • Cybersecurity
    • Workforce Considerations
  • Recommendations


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