The global aerostructures tooling equipment market

The global aerostructures 

tooling equipment market 

Study summary 

Munich, March 2012 

Areostructures_Tooling_Equipment_FINAL_short.pptx 

1

WHAT IS THE STUDY ABOUT? 

Executive summary 

> Roland Berger conducted a study about the global aerostructures tooling equipment market based on 

extensive desk research and expert interviews as well as bottom-up market modeling along the value chain 

> In 2012, relevant market expected to reach all-time peak of USD 1.4 bn stimulated by A350 and B787 programs 

> However, in 2020, market downturn by 75% to USD ~400 m expected due to lack of new programs 

> Consequently, installed capacity exceeds demand – Shift towards optimization/retrofit of existing equipment 

> Service market share in 2020 of ~60% indicates need for full service offers, e.g. consulting or process optimization 

> In addition, demand for simplified products and turnkey solutions at lower costs from emerging markets 

combined with upcoming local suppliers drive trend towards cost efficient standardization and modularization 

> Overall, aerostructures tooling equipment industry expected to undergo industrialization – Reflected by 

automated processes, flexible production systems or other learnings from already industrialized industries 

> Roland Berger expects that only two business models ensure a sustainable business 

– Turn-key provider – Service-driven business model capitalizing on need for comprehensive turn-key solutions 

– System optimizer – Focusing on in-depth know-how of single systems to optimize existing equipment 

> Roland Berger experts have a proven track record in the aerostructures tooling equipment market and are ready 

to support you in securing your success and preparing for the upcoming future challenges 

Source: Roland Berger 


2

Contents Page 

A. Research approach and market definition 

Market estimation derived from underlying end markets and expert interviews 4 

B. Market for aerostructures tooling equipment 

Volume of USD 1.4 bn in 2012 falling to approx. USD 400 m in 2020 9 

C. Need for action and recommendations 

Shift in market and increase in volume and scope of services 21 

© Roland Berger Strategy Consultants 


3

A. Research approach and market definition 


4

A RESEARCH APPROACH AND MARKET DEFINITION 

Our study analyzes the highly dynamic tooling equipment market for 

the aerostructures industry 

Background, methodology and key findings 

Background Methodology 

KEY FINDINGS 

> OEM (civil and military) and 

aerostructures market has been 

characterized by an increased 

workshare and responsibility of 

suppliers and a shift to new 

markets as well as volatile 

demand in recent years 

> Tooling equipment market faces 

a broad range of challenges in 

line with increasing demand for 

industrialized process and 

process stability/reproducibility 

> Third RB tooling equipment 

study analyzes this key market, 

major trends and success 

factors for the future 


> Interviews along the entire 

value chain of aircraft production 

> Desk research and competitor 

benchmarks 

> Market model for tooling 

equipment is based on a 

detailed modeling of underlying 

customer markets and expert 

interviews 

> Market forecast 2010-2020 

> Trends & developments in the 

tooling equipment market 

> Strategic challenges and 

success factors for different 

business models 

> Key strategic recommendations 

to ensure future business 

success 


5


The global aerostructures tooling equipment market study covers 

nearly all leading industry players and expert sources 

DESK RESEARCH 


Global aerostructures tooling equipment market study 

EQUIPMENT SUPPLIERS 

Global Aerostructures 

Tooling Equipment 

Market 2010-2020 

CUSTOMER INTERVIEWS 

INDUSTRY INTERVIEWS 


6


We followed a unique, detailed approach – Relevant market derived 

from underlying customer markets worldwide 

Study approach and results 

STUDY APPROACH 

Global civil and military 

aircraft market 

Starting point is a forecast 

for the OEM market for 

civil and military aircraft 

and helicopters by model 


Aerostructures 

market 

Based on a detailed 

demand forecast, we 

derive the global 

aerostructures 

market of OEMs and 

Tier 1-3 

Tooling 

equipment market 

Using our insights into 

customer markets, we 

then forecast the 

tooling equipment 

market in detail 

Results 

> Market development (product 

offering, segments and regions) 

> Current and future customer 

requirements along value chain 

> Relationship between market 

drivers for OEMs and the 

aerostructures and equipment 

markets 

> Technology trends in aerospace 

industry and influence on 

equipment manufacturers 

> Current and future success 

factors for tooling equipment 

manufacturers 


7


From a customer perspective, the aerostructures tooling equipment 

market can be clustered into three main segments 

Market definition and scope of the study 

Segment 

I 

II 

II 

DRILLING & 

RIVETING 

POSITION- 

ING 

JIGS, 

HANDLING 

AND 

TRANSPORT 

SYSTEMS 

1) CFRP: carbon fiber reinforced plastics 

Source: Expert interviews, Roland Berger 

Scope of study: aerostructures tooling equipment 

> Automated and semi-automated systems 

and equipment for drilling, riveting and 

welding components/modules 

> Major suppliers: Brötje Automation, 

ElectroImpact, Gemcor, Loxin 2002 

> Systems for high-precision movement and 

positioning of components and modules 

within the assembly process 

> Major suppliers: AIT, Brötje Automation, 

Dürr, ECA, MCE 

> Manual and automated systems for fixing, 

mounting, storage and transportation of 

components and modules 

> Major suppliers: virtually all OEMs, 

aerostructures and equipment suppliers 

Not in scope 

CFRP 1) 

manufacturing 

> Machines for 

manufacturing 

CFRP parts, 

mainly automated 

tape laying 

(ATL) and 

automated fiber 

placement (AFP) 

machines 


8

B. Market for aerostructures tooling equipment 


9

B MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT 

Four drivers characterize automated tooling equipment market – New 

program launch, rate increases, cost pressure & new technology 

Major market drivers – overview 

Start of new programs 

> Launch of new programs requires development 

and installation of customized equipment 

Rate increases in existing programs 

> Significant increases of cadence for existing 

models require higher automation and process 

industrialization and even add-on capacity 

Cost/efficiency pressure 

> Increase in productivity to reduce unit costs 

> Increase in process stability/reproducibility and 

reduction of supply chain risks 

New technology & materials 

> New, more efficient technology and materials 

drive adjustments/replacements of equipment 


I 

PURCHASING NEW 

EQUIPMENT 

> Development and procurement of new, modelspecific 

systems and equipment for 

manufacturing and assembly 

> Investment often within a period of 2-4 years 

II 

INDUSTRIALIZATION 

> Upgrades/updates of equipment & systems 

> Partial or full automation of manual processes 

> Increase of process stability through 

automation, measuring and control technology 

III 

OPTIMIZATION OF EQUIPMENT 

> Process optimization based on existing equipment with 

minimal investment to increase output 

Volatile demand 

mainly driven by 

overall economic 

development 


10


In 2010, the tooling equipment market was worth USD 1.1 bn – 

Largest segment is positioning systems for final assembly 

Global aerostructures automated tooling equipment market 1) , 2010 [USD m] 

TOTAL VOLUME: USD 1,110 

Jigs, 

transport, 

logistics 

(total: 432) 

Positioning 

(total: 423) 

Riveting, drilling, 

robotics 

(total: 115) 

270 

127 

(47%) 

98 

(36%) 

45 

(17%) 

Sub-module 

assembly 

1) Excluding automated carbon fiber equipment (AFP, ATL) 


300 

125 

(42%) 

125 

(42%) 

50 

(17%) 

Module 

assembly 

400 

180 

(45%) 

200 

(50%) 

20 

(5%) 

Final assembly 

140 

Service 

COMMENTS 

> Jigs, transport, logistics and 

positioning systems are the largest 

segments, worth approx. USD 430 m 

in total in 2010 

> Riveting and drilling equipment have 

around a 10% market share – main 

application in sub-module (e.g. 

fuselage shells/hull) and module 

assembly (e.g. fuselage sections) 

> Within final assembly there is limited 

automated riveting and drilling 

equipment demand – large share of 

manual labor supported by jigs and 

positioning systems 

> Demand for jigs and handling 

systems grows with increasing 

component size 


11


Demand will remain at record levels in the short term – Significant 

downturn and shift to service expected from 2013 onwards 

Aerostructures tooling equipment market, 2006-2020e (illustrative) [USD m] 

781 

15% 

85% 

06 

904 

14% 

86% 

07 

Service 

1.119 

12% 

88% 

08 

+83% 

890 

16% 

84% 

09 

Equipment 

Note: USD:EUR exchange rate: 1.35 

1.110 

13% 

87% 

10 


1.290 

11% 

89% 

11e 

1.426 

10% 

90% 

12e 

1.202 

12% 

88% 

13e 

944 

17% 

83% 

14e 

789 

23% 

77% 

15e 

-73% 

636 

31% 

69% 

16e 

425 

52% 

48% 

17e 

As of today no 

new programs 

after 2016 

announced 

364 

63% 

37% 

18e 

380 

63% 

37% 

19e 

385 

62% 

38% 

20e 

COMMENTS 

> A350 (and last phase of B787 tooling) 

drive peaking market in 2011 and 2012 

> Start-up of new programs in China and 

Russia dampens the declining demand 

in medium term from 2013 onward 

> Slump after 2016 due to lack of new 

programs at that stage between EIS of 

A320 NEO/B737 MAX and end of the 

decade on LCA 

> Substantial shift towards optimization 

and retrofit of existing equipment 

causes significantly reduced volume 

> Rate increases covered by optimization 

of existing systems with only low 

investments – significant rate increases 

realized by duplication of existing 

systems including minor adjustments/ 

improvements 


12


The market is indirectly driven by growth in customer markets – 

Primary strategic and operational requirements identified 

Relationship of market drivers in OEM, aerostructures and tooling equipment market 

OEM (aircraft 

manufacturing) 

> Growth of world economy 

> Growth of global trade 

> Liberalization of air space 

> Development of oil/kerosene price 

> Development of wages 

Strategic requirements 

> Consolidation and specialization 

of players 

> Internationalization and expansion 

of footprint for targeting new 


> Taking on development and 

financing risks 


Operational requirements 

> Handling of complete system/module responsibility 

> Industrialization of manufacturing and assembly 

process 

> Integration of new materials 

Aerostructures 

manufacturing 

> Global fleet growth 

> Governmental industrial policy 

> Cost and efficiency pressures 

> Risk reduction by OEMs 

Strategic requirements 

> Global turnkey capabilities for large projects 

> Acting as a problem-solving partner for the 

complete manufacturing and assembly process 

> Local engineering and after-sales expertise 

Operational requirements 

> Suitability for interdisciplinary 

global development partnerships 

> Greatest process stability and 

reproducibility 

> Flexible system design and broad 

areas of application 

Equipment 

manufacturing 

> Start/ramp-up of new programs 

> Increase of production rates 

> Cost/efficiency pressure 

> New technology 


13


Six major trends influencing the tooling equipment market have 

been identified – Varying impact on supplier depending on segment 

TREND 

IMPLI- 

CATIONS 

IMPACT ON SUPPLIER 

Drill & Rivet 

Positioning 

Jigs & transport 

systems 

Low High 


1 Industrialization 

> Transition from 

factory to serial 

production 

> Standardized 

processes, 

automation and 

process flow 

> Transfer of best 

practices from 

other industries 

2 Flexibility 

> One tool for 

multiple models/modules 

> More flexible 

and accessible 

work station capable 

of multiple 

operations 

> Automated, 

software-based 

process control 

3 Cost optimization 

> Standardization 

and modularization 

without quality 

compromises 

> Product cost 

pressure 

through 

emerging 

markets and 

OEMs 

4 Material 

mix 

> Two clusters 

identified (single 

aisle vs. twin 

aisle) – high 

CFRP share for 

twin aisle and 

medium share 

in single aisle 

> Recent CFRP 

boom expected 

to slow down 

5 Risk 

sharing 

> OEMs focus on 

competencies 

"system 

integration" and 

"program 

management" 

> Supplier risk 

management 

and financial 

strength critical 

to fulfill 

requirements 

6 Service 

> Local solution 

competence 

> Necessary 

engineering and 

process knowhow 

> Optimization of 

existing equipment 


14

B I MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – INDUSTRIALIZATION 

Cost efficiency and industrialization are driving the market – 

Automation is only viable in certain programs and regions 

Use of process automation and production cadences by segment and region, 2011-2020 

[no. of A/C per month] 

Type 

REGIONAL 

Embraer ERJ-190, ART 42/72, DHC-8-400 

BUSINESS 

Cessna Citation Mustang, Embraer Phenom 100 

LCA – SINGLE-AISLE 

A318-321, B787-6 to 9 

LCA – TWIN-AISLE 

A330, B777, A380, B767, B787, B747-8 

HELICOPTER 

Eurocopter AS350, Sikorsky UH-60 

2011 2011, relevant size for automation 

2020 

Source: Teal, expert interviews, Roland Berger 

Europe Americas Asia 

Russia 

1-4 0-6 

0.1 

1 

1-2 

30-40 

0-7 

0-14 

1-6 

30-40 

0-6 

0-9 

2-4 

0.5 

0.1 

COMMENTS 

> Production rates for all civil 

aircraft segments will increase to 

meet global demand for new 

aircrafts, plus the start and rampup 

of new programs 

> Increasing production rate 

drives industrialization and automation 

in today's core markets 

> Start of new programs in Asia 

and Russia is shifting markets 

> Evolving aerostructures players in 

Asia and Russia require simpler 

systems at lower costs but with 

same accuracy 

> Players from emerging markets 

strive for turnkey solutions due 

to their lack of expertise in aircraft 

and aerostructures production 


15

B II MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – FLEXIBILITY 

Flexibility in machinery setup and production processes is enabled 

by software machine controlling and automated process monitoring 

Dimensions of flexibility 


Multi-model machinery 

> Similar aircraft models (e.g. A318 and 

A321 on one production line) 

> Regular updates of aerostructures design 

due to product efficiency requirements 

> Supplier's need for lower dependency on 

specific models/components 

Flexible production lines 

> Frequent re-design of processes and 

components with effect on machinery 

systems (configuration management) 

> Supplier's thrive for lower investments 

due to more generic production lines and 

higher integration to reduce risk 

Growing importance of software 

> One system solution for multiple 

models/modules 

> Machinery to be adjusted rather 

than replaced, software controls 

required quality and precision 

Learning from other industries 

> Optimization of existing 

processes to increase efficiency 

> Higher integration and 

connectivity of individual systems 

> Automated process monitoring as 

process enabler 

Flexibility 

throughout 

the aerostructures 

production 

process 


16

B III MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – COST OPTIMIZATION 

Emerging markets and overcapacities in the near future require cost 

optimization through standardization and modularization 

Drivers and impact of cost optimization 

DEMAND FROM EMERGING 

MARKETS 

> Demand shift towards emerging 


> New program launches in 

emerging markets such as 

Russia, China and Latin America 

> Rise of aerostructures production 

in emerging markets with 

different cost structure increases 

price pressure 

> New markets and customers 

require simpler systems and 

turnkey solutions at reduced 

cost 


"NO FRILLS" 

Cost optimization through 

product standardization and 

modularization 

COST AND EFFICIENCY 

PRESSURE 

> Global demand decline compared 

to current peak is expected to 

result in overcapacity 

> OEM cost reduction initiatives 

force Tier-1s to reduce shipset 

prices (e.g. SCOPE, Blue Sky) 

> Strong focus on short ROI for 

new equipment investments 

> Price pressure in all markets 

necessitates production and cost 

efficiency on the same level of 

accuracy 


17

B IV MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – MATERIAL MIX 

Large aircraft currently being developed have a composite share of 

over 50% – No further increase is expected at first 

Material mix development as a share of total weight of aircraft structure [%] 

Boeing Airbus LCA1) Bombar UAC Comac 

-dier 

2020e 

11 

12 13 14 

11 

50 

1 1 1 1 

5 3 

B767 B777 

2 

7 

3 

B747 

B787 

5 

4 3 

B737 

79 79 80 

1967 

1969 

1981 

70 

1994 

1) average material mix Large Commercial Aircrafts (LCA) in 2020 

Source: Teal, expert interviews, Russia & CIS Military Newswire, Roland Berger 

15 

10 

20 

2011 

Other Composite Titanium 

A300/ 

310 

7 

6 

5 

8 

74 

1985 

Steel 

A320 

8 

15 16 22 

5 

6 

8 

5 

5 

66 66 

1987 

A330/ 

340 

1992 

Aluminum 

A380 

7 

5 5 

61 

A350 

7 

52 

14 

7 

20 

2007 ~2014 

C- Series 

30 2) 

46 

24 

~2015 

2) including steel and titanium 

MS-21 

5 

38 

19 

5 

33 

~2019 

C919 

5-10 

20-30 

15-20 

5-10 

30-40 

~2019 

Ø 2020 

5 

25-30 

7 

8 

50-55 

Impact 

> Up to B787 and A350, significant 

increase in composite share 

("CFRP hype") 

> Updates of current single-aisle 

aircrafts (A320neo and B737max) 

are planned without a significant 

increase in the proportion of 

CFRP compared to A320 & B737 

> Material mix (metal vs. carbon 

fuselage) of new ("post-neo") 

single-aisle generation aircraft not 

yet defined, but clear preference 

for metal 

"Composite percentage remains 

frozen at today's level – the new 

A30X will have a metal fuselage" 

– Head of Procurement at Airbus 


18

B V MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – RISK SHARING 

OEM's demand for outsourcing larger workpackages drives ongoing 

consolidation of aerostructures landscape towards "Super Tier 1s" 

Evolution of aerostructures industry 

OEM 

Tier 1 

Tier 2 

Situation today 

Supplier A 

OEMs hand over design and supply chain 

management to tier-1s and require risk-sharing 

partnerships and large upfront investments – 

Some take over value chain management 


Near-term upcoming 

market consolidation 

Airbus (FAL) Airbus (FAL) 

Supplier B 

Specs 

Deliveries 

Supplier C 

Deliveries 

Supplier A 

Supplier B 

Supplier C 

Positioning as "sub-supplier" not 

sustainable – Players will either have to 

invest heavily and actively drive 

consolidation or exit 

Impact 

> OEMs hand over responsibility & 

risk to Super Tier 1s by giving 

them design & supply chain 

responsibility for complete 

workpackages / systems 

> Responsibility for larger 

workpackages together with 

delay of aircraft programs (e.g. 

B787 or A350) demands strong 

financial backbone to ensure 

liquidity – But aerostructures is 

characterized by a fragmented 

industry structure in Europe and 

poor financial performance of 

players 

> Players from emerging markets 

with a strong financial backbone 

drive consolidation in Europe 


19

B VI MARKET FOR AEROSTRUCTURES TOOLING EQUIPMENT – SERVICE 

Decreasing demand in key markets is cushioned by increasing 

service demand – New service models are required 

Evolution of after-sales and service market for tooling equipment 

Service 

scope 

High 2020 

Optimization of existing plants 

> Automation 

> Process optimization 

> Plant layout revision 

> Retrofit of single and complete systems 

> Efficiency increase 

> Cost decrease 

Low 

2010 

Maintenance, 

repair and spare 

parts 


0 100 200 300 

Segment volume [USD m] 

COMMENTS 

> Expected increase in volume and 

scope of service offering in line with 

decline in demand for new 

equipment 

> Key drivers are the reduction of the 

record order backlog by rate 

increases and rising cost pressure 

due to market entry of new (OEM) 

players 

> Significant decline in demand for 

new facilities in today's core markets 

(USA, Europe) but shift to process 

optimization and efficiency plus 

increase in flexibility of existing 

systems 


20

C. Need for action and recommendations 


21

C NEED FOR ACTION AND RECOMMENDATIONS 

Key market trends are driven by changing key customer 

requirements – Starting point for strategic implications 

Key trends and drivers 

KEY MARKET TRENDS 

KEY CUSTOMER 

REQUIREMENTS 

Increased usage of technical 

industrialization and serial production 

Invest in multi-model tools and 

production lines 

Cost and efficiency pressure intensified 

by new entries from emerging markets 

Share of composites remains stable as 

in latest program revisions 

Ongoing consolidation of aerostructures 

landscape towards "Super Tier 1s" 

Market development towards period of 

fewer new equipment purchases 


Simpler, cost 

efficient 

solutions 

Industrialization 

Minimal set up 

time due to 

volatile 

demand 

Flexibility 

"No frills"products 

with 

low cost but 

same quality 

Cost optimization 

Product efficiencyrequirements 

in balance 

with production 

costs 

Material Mix 

Need for 

turnkey 

capabilities and 

risk-taking 

IDENTIFIED TOPICS 

Risk 

Sharing 

Higher demand 

for services, 

shorter 

maintenance 

intervals 

Service 


22


We recommend a clear strategic focus on two business models to 

ensure sustainable business even in turbulent times 

Segmentation of business models in the tooling equipment market 

Emerging 


MARKET 

FOCUS 

Today's 

core 



SYSTEM SPECIALIST 

I II 

> Comprehensive expertise in 

individual systems/specific niches 

> High innovation potential 

> Strong brand and reputation in 

specific system segment 

> Comprehensive understanding of 

manufacturing and assembly 

processes of aircrafts 

> Wide automation and robotics 

know-how 

> High customer focus and flexibility 

III 

Engineering know-how 

COMPETENCE FOCUS 

TURN-KEY PROVIDER 

> Turnkey capability for complex 

new projects/green field projects 

> Financial strength and 

professional risk management 

> Specification capability for 

solution and interfaces 

SYSTEM OPTIMIZER IV SOLUTION PROVIDER 

Sustainable business models in declining markets 

> "One face to the customer" 

> Control of system value chain 

> Strong integration know-how 

> Contract and risk management 

Integration know-how 

COMMENTS 

> Wide range of customer requirements in 

today's core markets (Europe, North 

America) and future emerging markets 

(China, Russia, India) 

> Increased segmentation of the 

equipment market expected 

> Key challenge for small, financially 

instable players: building a clear 

USP/competency area for differentiation 

> Key challenge for large, financially 

strong players: building a global network 

capacity to manage and control the 

value chain 


23


Key question for industry CEOs: How well are you prepared for the 

future challenges? 

KEY QUESTIONS TO THE CEO 

1 

2 

BUSINESS MODEL 

• Does your strategy conform to or at least come 

close to one of our future business models? 

• If not, do you have a clear idea of what makes 

your business and company special? 

MARKET PRESENCE 

• Does your company have a delivery capability 

in tomorrow's markets (e.g. Russia, China)? 

• Are you prepared to benefit from future growth 

opportunities in these markets? 

COMPETENCE PORTFOLIO 

3 6 

• Do you have the right people, processes and • Does your service portfolio cover all relevant and 

procedures in place for turnkey solutions? 

required services for your customers? 

• Is your company able to manage suppliers on 

different continents along your value chain? 


COST FLEXIBILITY 

• Is your company's cost structure flexible enough 

to survive a market downturn of up to 70%? 

• Is your financial position strong enough to survive 

a temporary drop in new equipment business? 

RISK MANAGEMENT 

• Is your organization able to monitor, quantify and 

manage project-driven risks and opportunities? 

• Do you have a clear idea how much risk your 

company's financial position can take? 

SERVICE STRATEGY 

• Do you have the right sales and business 

organization to push your service business? 


4 

5 

24

It's character that creates impact 


25

The global aerostructures tooling equipment market

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