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Case Studies

Ready for Takeoff

Japan’s leading jet-engine maintenance company launched an ambitious modernization strategy to stay ahead in a growing and fast-moving market.

by Alan Joch

November 2015

Keeping the engines that power commercial and military aircraft in top form is a far cry from tuning up the family car. Most obviously, jet engines are an order of magnitude more complex than typical car motors. For example, modern turbo-fan engines in jetliners can contain tens of thousands of parts, ranging from turbine blades and valves to compressors and other components that must perform in temperatures exceeding 1,000 degrees Fahrenheit. And because safety overshadows all other maintenance considerations, service technicians must be particularly vigilant about spotting, fixing, and documenting the slightest mechanical problems.

Snapshot

IHI Corporation

    Location: Tokyo, Japan

    Industry: Civilian and military aerospace and heavy equipment manufacturing, servicing, and repair

    Employees: 27,562

    Revenue: ¥1,455,844 million in FY 2014

    Oracle products: Oracle Complex Maintenance, Repair, and Overhaul; Oracle E-Business Suite

Masa Yamashita

    Director, Maintenance Division, Aero Engine and Space Operations

    Length of tenure: 27 years

    Education: Master’s degree in mechanical engineering, University of Tokyo

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It’s no surprise, then, that companies with highly skilled technical talent carve out profitable niches in the aerospace sector. An industry leader is Japan’s IHI Corporation, which provides engine repair services for operators in more than 20 different countries.

IHI Corporation

Launch the Slideshow

But competitive advantages can be fleeting in an industry constantly disrupted by new technologies. By 2020, most aviation maintenance, repair, and overhaul (MRO) companies will adopt new technology “in a way that fundamentally changes how the industry works,” notes the 2015 MRO survey by Oliver Wyman, a management consulting firm. One upshot: new competitors will enter the market, the report says.

Such forecasts help explain why IHI is modernizing the IT systems that manage its complex maintenance operations and related regulatory reporting requirements. IHI is implementing Oracle Complex Maintenance, Repair, and Overhaul, an aircraft maintenance service application that is part of Oracle E-Business Suite. IHI’s leaders chose the Oracle application for a number of reasons, including its capabilities for improving end-user experiences by making it easier to access information essential to their jobs.

When IHI completes the rollout of the application in 2016, its highly skilled technicians will more efficiently manage the process of evaluating the maintenance needs of engines that arrive for service and document the work performed on them. In addition, the software will give IHI’s team sophisticated data analytics and tools for sharing information more effectively with original equipment manufacturers (OEMs) to heighten engine reliability and generate higher profits, says Masa Yamashita, director of IHI’s Maintenance Division, Aero Engine and Space Operations.

In close partnerships with engine OEMs, the IHI technicians do more than just fix engines. IHI participates in international cooperative development programs for jet engines, such as the GE90, GEnx, V2500, and CF34, and the future engines GE9 and PW1100G. In this capacity IHI contributes to design and development activities. “This valuable information is vital for helping engineers improve future engines designs,” Yamashita says. “In return, we gain a unique understanding of the engines we service.”

1,000 degrees Fahrenheit

Temperature at which some jet-engine components must operate safely


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IHI has a similarly close partnership with the Japanese Ministry of Defense, which oversees manufacturing of military engines that have even higher performance requirements than those of civilian aircraft. “This gives us a knowledgebase and advantages that enable us to develop higher performance and reliability,” Yamashita says. “We understand what it takes to create jet engines for extreme conditions.”

In addition to maintaining the highest levels of safety and performance in the engines it services, IHI faces management challenges associated with the MRO process. Technicians must work with parts suppliers to ensure that replacements are delivered on time, and regularly update customers on changes to work orders if the need for additional repairs becomes evident once an engine is disassembled.

IHI managers must also keep a close eye on the bottom line. After all, if the schedules of IHI’s highly trained personnel aren’t managed closely, the company incurs unnecessary costs. Similarly, if the engines coming in for service aren’t returned to duty as quickly as safety considerations allow, airline company customers can’t use those expensive units. “Finding the best ways to increase customer satisfaction is one of the most important aspects of engine maintenance,” Yamashita says.

Soaring Revenues

IHI’s modernization project is playing out in a global jet-engine MRO market that is forecast to grow from about US$28 billion in 2015 to US$37 billion in 2020 and to nearly US$47 billion by 2025, according to CAVOK’s 2015 Global Engine Fleet and Market Forecast.

Before the system modernization, IHI coordinated its maintenance workflow processes using proprietary and highly customized applications. Those included modules for creating and tracking work orders, monitoring service bulletins and airworthiness directives, and managing inventory. “We have an excellent IT team, so our homegrown IT system was very well designed,” says Tsuyoshi Tagaya, general manager of IHI’s Civil Aero Engine Business Strategy Group, Aero Engine and Space Operations. “However, our staff couldn’t use it to easily collect data from related systems. That means we couldn’t get a clear view of our entire MRO process.”

So IHI leaders formed a project team to identify all the gaps in the legacy systems and then evaluate commercial applications with the goal of consolidating everything under a centralized IT system. After evaluating a handful of candidates, the IHI executives chose Oracle Complex Maintenance, Repair, and Overhaul.

“Aircraft engine maintenance is a very complex business, and Oracle is the only one we found that offers an application for addressing all the various stages of the jet-engine maintenance and management process,” says Yoshinobu Ohgaki, manager of the Maintenance Engineering Group within Aero Engine and Space Operations. “Also important in our decision was our meetings with the Oracle Complex Maintenance, Repair, and Overhaul development team and understanding the team’s roadmap for next-generation MRO capabilities.”

One early benefit of Oracle Complex Maintenance, Repair, and Overhaul will be better management of information and more-accurate record-keeping, thanks to functionality that allows for recording, consolidating, and maintaining data from multiple work areas.

For example, at the end of each workday the IHI staff reviews any new data that it collected to check for possible errors or conflicts with existing information. Appropriate stakeholders are then contacted if potential problems are flagged. In the legacy system, isolating the information, performing error analyses, and resolving problems was a largely manual process that typically took from two days to a week to complete.

Finding the best ways to increase customer satisfaction is one of the most important aspects of engine maintenance.”–Masa Yamashita, Director, Maintenance Division, Aero Engine and Space Operations, IHI

“Our goal was to correct problems without these time lags, and Oracle Complex Maintenance, Repair, and Overhaul helps us do that,” Tagaya says. “Now if there’s an exception, we’ll know in a few minutes whether we need to make an adjustment. That is very important for a business where quality is the number one goal.”

Yamashita adds that he also pulls data about business operations and financial results from Oracle Complex Maintenance, Repair, and Overhaul for the monthly reports he compiles for senior management.

In the future, the integrated Oracle platform will enable IHI to do more-extensive analysis of data from the company’s multiple divisions to help executives spot emerging business trends and identify opportunities for workflow improvements.

A Steady Approach

Because the modernization project is so extensive, and maintaining the quality requirements of customers can’t waver, IHI leaders created a methodical, multiphased implementation strategy.

The first step didn’t even focus on the Oracle Complex Maintenance, Repair, and Overhaul technology. Instead, staffers worked with Oracle consultants to investigate workflow best practices at global companies in a variety of industry sectors. “A phased approach means we can spend the time we need to apply world-class best practices to ensure success,” Tagaya says. “As we improve our processes, we will then incorporate them within the Oracle Complex Maintenance, Repair, and Overhaul system. Oracle Complex Maintenance, Repair, and Overhaul gives us flexibility to input our know-how at each step.”

The rollout process started in early 2015, when project managers introduced Oracle Complex Maintenance, Repair, and Overhaul to key members of the technical crew. Formal classroom training helps influencers hone skills for entering part numbers and other information. Once these influencers see the benefits of the software and revised business processes, they encourage other application users to get onboard once the larger rollout happens. “When people actually start using the system, they understand its power, and once that happens, IHI will be able to utilize that power in more and more ways,” says Ohgaki, who is overseeing the rollout.

Ohgaki created a web page where staff members can get details about the Oracle application and view a chart that shows its new workflows, “so people can easily see the whole MRO process,” he explains.

Growth on the Horizon

The IHI executives already are thinking about how the system modernization can support future growth. The company plans to open another facility, perhaps outside of Japan, sometime in the future, Yamashita says.

“Having an integrated IT system, master data, and workflow processes based on global standards will be important when that happens,” he continues. “That will enable us to easily transfer our expertise and technology beyond our current operations.”

Action Items
  • How to Tune a High-Performance Jet Engine
  • Oracle SCM Solutions—Complex Maintenance Repair and Overhaul
  • Photography by Shutterstock