Blockchain Solutions & Smart Contracts in Aviation - May 2024 Recap
Welcome to the May 2024 edition of Aero NextGen's newsletter.
Dive into this month's newsletter for a recap on: Blockchain Solutions & Smart Contracts in Aviation.
Revolutionize your MRO operations with Blockchain solutions, utilizing Smart Contracts for enhanced transparency, security, and efficiency.
Did You Know?
Blockchain facilitates better tracking of aircraft parts, leading to improved inventory management and a reduction in AOG (Aircraft on Ground) incidents.
Blockchain technology is setting a new standard in aviation maintenance. Ensuring that every part is traceable in real-time, providing unmatched transparency and efficiency.
About Blockchain Solutions
This month’s Tech Tuesday, we dove into the fundamentals of blockchain and its groundbreaking impact on the aviation industry. Blockchain isn't just a buzzword—it's a robust database technology that is reshaping how we handle transactions and data security.
Here’s how it works:
Blockchain Structure: Comprised of individual blocks of data linked in a chronological chain.
Distributed Ledger: Each block is copied across a network of computers (nodes), enhancing transparency and security.
Verification Process: Nodes verify the legitimacy of transactions, ensuring data integrity and preventing fraud.
For aviation MRO, blockchain offers unparalleled traceability of parts, secure maintenance records, and a streamlined approach to operational decision-making. Embrace the future of aviation with blockchain's promise of enhanced security and efficiency across the ecosystem.
Pain Point and Solutions Spotlight: Blockchain Solutions in Aviation
This month we tackled two pervasive IT challenges in the MRO industry:
Limited Supplier Performance Tracking and Contract Adherence
Technician Allocation Based on Experience Over Skill Optimization
MROs lack effective mechanisms to track supplier performance and enforce penalties. The absence of robust tracking results in long lead times and inconsistent quality from suppliers, impacting the overall operational efficiency of MROs. The inability to track supplier performance to contract terms can hinder the costing process, affecting cost control efforts and limiting the MRO's ability to make informed supplier-related decisions.
Implement a Supplier Relationship Management system that allows MROs to track supplier performance, monitor adherence to contract terms, and automate penalty enforcement when necessary. Additionally, establish clear Key Performance Indicators (KPIs) for suppliers and regularly review their performance against these metrics.
MROs often allocate work to technicians based on their experience with specific part numbers. This approach leads to the suboptimal utilization of skills and manpower. It can create dependencies on certain individuals and their tribal knowledge while limiting opportunities for others to be trained and gain qualifications, affecting workforce development and overall operational efficiency.
To optimize technician allocation based on skill rather than experience, MROs can develop a skill-based resource management system that matches technicians' skills and certifications with specific tasks and projects. Implement cross-training programs to broaden the skillsets of technicians and reduce dependencies on specific individuals. Create individual development plans for technicians to guide their career growth and skill enhancement. Maintain a centralized database of technician skills, certifications, and qualifications to facilitate efficient allocation and ensure dynamic prioritization optimizing the end-to-end workflow of the MRO.
The basis of these pain points can be solved with a blockchain that homes every aspect of the airframe manufacturer, part suppliers, production lines, and maintenance records, combined with supplier and customer contracts to design a gamified approach to meeting supply, demand, and performance.
For more insights on how Blockchain is revolutionizing the Aviation sector, speak to our experts at Aero NextGen.
Community Insights
Thank you to everyone who participated in our latest poll on how blockchain technology can enhance aviation MRO security and traceability. The results are clear: 50% of you believe that the greatest benefit of blockchain in aviation MRO lies in the Traceability of Parts.
This top-voted feature highlights blockchain's ability to provide a transparent, immutable record of every part's history and transactions, significantly enhancing the accuracy and security of parts management. This capability is crucial for ensuring compliance, optimizing maintenance schedules, and reducing the risk of using counterfeit parts.
Stay tuned for more insights and discussions as we continue to explore the transformative impact of blockchain in the aviation industry.
Customer Success Story: Aero NextGen Partners with Top Aces
We are thrilled to announce a partnership between Aero NextGen and Top Aces, a leader in advanced aerial training solutions. This collaboration focuses on leveraging the power of Maxa, our advanced Business Intelligence platform partner, to transform financial consolidation and optimize the direct maintenance costs of flight operations.
Together, Aero NextGen and Top Aces are setting new standards in aviation efficiency:
Enhanced Financial Oversight: Streamlining financial processes for better transparency and control.
Reduced Maintenance Costs: Utilizing data-driven insights to lower direct maintenance costs, improving operational efficiency.
Stay tuned as we embark on this journey to redefine the standards of operational excellence in the aviation industry.
Founder’s Thoughts on Blockchain Solutions
“Blockchain technology has the potential to streamline many industries. Aerospace is a good example due to heavy compliance, specialized knowledge, and manual intervention, which often lead to high turnaround time, cost, low reliability, and inefficient supply chains.
In a world where all stakeholders can reach an agreement on data sharing and all data is held in a single blockchain from the airframer to the part manufacturer, maintenance provider, and airline, the potential to create a truly predictive maintenance machine is unmatched. Leveraging the power of back-to-birth records trailed by artificial intelligence and machine learning, the entire ecosystem can work together to drive optimal efficiency across the board.
With more data comes more accuracy; if the entire active fleet were pushing data into a centralized mechanism, it would be able to predict when a part needs to be removed based on its flight cycle, landings, age, environmental factors, component behavior, and more.
The maintenance provider would know the level of manpower required to fulfill incoming demand and have the right inventory on hand, avoiding roadblocks in the workflow while waiting for parts. They would also have better visibility into future work inflow, allowing them to better plan for cross-training and ensure technicians will have the right qualifications to increase capacity where the demand is. They would also increase operational efficiencies by predicting tasks required to return the part to serviceable condition with insights into work done in the part’s history and data into no faults found records of similar components.
The part manufacturer will be aware of the number of parts needed by the aviation ecosystem to prevent a surplus of parts and an inactive inventory pool, which would cannibalize the part’s value on the market. As a result, the airline will suffer fewer AOG (aircraft-on-ground) events, which are extremely costly, as the aircraft is prevented from flying until a part is replaced.
Beyond predictive analytics and supply chain optimization, the entire workflow from airframer to airline can be streamlined, as many functions can rely on process automation. For instance, if a maintenance provider has visibility into the volume of work coming into the shop and can derive from predictive analytics the type of workscope, tasks, and bill of material to order, purchase orders can be automatically generated based on the supplier’s lead time, working back from the time of expected arrival of the component into the shop. The manufacturer, in turn, can also automatically adjust levels of inventory for production tied to supply and demand on the market. Airlines, too, can place auto-repair orders when predictive analytics triggers the need for part replacements, reducing unnecessary shop visits.
Blockchain technology can help streamline workflow processes but also unlock the concept of fair market value with data on a part’s unique behavior, thus eliminating the need for brokers and aggressive price cuts. Furthermore, parts can retain their intrinsic value, making the entire ecosystem much more cost-effective. Smart contracts, meanwhile, can be used to create customer loyalty programs, enabling customers to be rewarded for meeting timeframes on quote approvals, for example, or to penalize suppliers that breach contract lead times. This can lead to improved performance management and customer satisfaction.
I envision a time when the concept of requests for proposals becomes obsolete, and the entire parts management ecosystem is done automatically based on triggers like the best-performing repair shop, proximity, manpower availability, quality, etc., and cost-by-the-hour programs are fully managed via smart contracts on a blockchain. Creating tokenization and gamification to reward good behavior and penalize bad. All of which require heavy overhead, administrative burden, and a level of transparency that does not exist today.”
Aero NextGen Joins Aero Montreal!
Aero NextGen is now a proud member of Aero Montreal, a strategic alliance of leaders in the Quebec aerospace sector.
This partnership marks a significant milestone in our journey to further enhance our connections and influence within the aerospace industry.
As part of Aero Montreal, Aero NextGen will collaborate with other key players to drive innovation, share knowledge, and contribute to the development of the aerospace sector in Quebec and beyond. Our membership with Aero Montreal aligns perfectly with our mission to bring advanced MRO solutions and digital transformation to the aviation industry.
Stay tuned for updates on our collaborative projects and initiatives that aim to elevate aerospace technology and operations.