Digital Aerospace and Defense Build, Service, and Fly Better Hello. I am here today to show you how a digital transformation will help you to meet the tough challenges we face today in the aerospace and defense industry. Torsten Welte Global VP, Industry Business Unit A&D July 2016

The world’s commercial aircraft fleet will double in size over the next 20 years. One thing that is clear is that the demand for aircraft is stronger than ever and technology is opening up new opportunities for innovation: The world’s commercial aircraft fleet will double in size over the next 20 years. Modern planes can create over 0.5 TB of data for each flight as input for next-generation services. Groundbreaking 3D printing innovations enable OEMs to even better meet service-level agreements and increase uptime. Source: Boeing

The world’s commercial aircraft fleet will double in size over the next 20 years. Modern planes can create more than 0.5 TB of data for each flight as input for next-generation services. One thing that is clear is that the demand for aircraft is stronger than ever and technology is opening up new opportunities for innovation: The world’s commercial aircraft fleet will double in size over the next 20 years. Modern planes can create over 0.5 TB of data for each flight as input for next-generation services. Groundbreaking 3D printing innovations enable OEMs to even better meet SLAs and increase uptime. Source: Boeing

The world’s commercial aircraft fleet will double in size over the next 20 years. Modern planes can create more than 0.5 TB of data for each flight as input for next-generation services. Groundbreaking 3D printing innovations enable OEMs to even better meet service-level agreements and increase uptime. One thing that is clear is that the demand for aircraft is stronger than ever and technology is opening up new opportunities for innovation: The world’s commercial aircraft fleet will double in size over the next 20 years, Modern planes can create over 0.5 TB of data for each flight as input for next-generation services. Groundbreaking 3D printing innovations enable OEMs to even better meet SLAs and increase uptime. Source: Boeing Source: www.pwc.com/us/en/industrialproducts/assets/3d -printing-next_manufacturingchart-pack-pwc.pdf/

Reduce time to market However, in the face of this growing demand, aviation companies also face a number of challenges. They are under pressure to: Reduce the time it takes to develop and deliver new aircraft to the customer Grow their skills base to ensure they can work at full capacity Drive innovation to produce ever-smarter, more-efficient aircraft Manage the complexity that results from these new innovations to ensure they meet the highest quality and safety standards

Reduce time to market Grow the skills base However, in the face of this growing demand, aviation companies also face a number of challenges. They are under pressure to: Reduce the time it takes to develop and deliver new aircraft to the customer Grow their skills base to ensure they can work at full capacity Drive innovation to produce ever-smarter, more-efficient aircraft Manage the complexity that results from these new innovations to ensure they meet the highest quality and safety standards

Reduce time to market Grow the skills base Drive innovation However, in the face of this growing demand, aviation companies also face a number of challenges. They are under pressure to: Reduce the time it takes to develop and deliver new aircraft to the customer Grow their skills base to ensure they can work at full capacity Drive innovation to produce ever-smarter, more-efficient aircraft Manage the complexity that results from these new innovations to ensure they meet the highest quality and safety standards

Reduce time to market Grow the skills base Drive innovation However, in the face of this growing demand, aviation companies also face a number of challenges. They are under pressure to: Reduce the time it takes to develop and deliver new aircraft to the customer Grow their skills base to ensure they can work at full capacity Drive innovation to produce ever-smarter, more-efficient aircraft Manage the complexity that results from these new innovations to ensure they meet the highest quality and safety standards Manage complexity

How do you fulfill growing demand and meet tough customer expectations? So how do you fulfill growing demand while meeting tough customer expectations?

Go digital and reach for the skies! Digital technology is transforming the way aviation companies operate, opening up an exciting new world of possibilities.

Deliver actionable real-time insights Run smarter factories Create new services You can run smarter factories. We’re now seeing digital shop floors with 3D printing, machine-to-machine automation, and artificial intelligence. These enable highly agile production with predictive quality controls, reducing rework. You can create new services. Today’s airplanes are fitted with more than 10,000 digital sensors. This delivers more performance data than ever before, enabling aviation companies to develop advanced analytic and predictive applications that deliver added value to airlines. You can deliver actionable real-time insights. Digital technologies allow you to track thousands of flights per day in 4D – that’s 3D spatial visualization with comprehensive real-time context information. This supports more-effective decision making and enables airlines to manage operations by exception. Deliver actionable real-time insights

Reevaluate To achieve this, you must move away from linear supply chains to a digital network. And you must reevaluate every part of your business – your business models, processes, and the way people work.

Reevaluate Business models To achieve this, you must move away from linear supply chains to a digital network. And you must reevaluate every part of your business – your business models, processes, and the way people work.

Reevaluate Business models Business processes To achieve this, you must move away from linear supply chains to a digital network. And you must reevaluate every part of your business – your business models, processes, and the way people work.

Reevaluate Business models Business processes Work To achieve this, you must move away from linear supply chains to a digital network. And you must reevaluate every part of your business – your business models, processes, and the way people work.

Reimagine

Reimagine $ Business models Total lifecycle ownership Aviation companies need to reimagine business models. Increasingly, we’re seeing total lifecycle ownership where there’s a requirement to provide services across the entire lifecycle of an aircraft. Information as a product is also becoming an important business area, with aviation companies selling not only equipment but analytics data to their customers. OEMs are playing a key role as digital integrators, installing and setting up the digital systems that give airlines so much information. Finally, 3D printing is helping aviation companies to streamline production to cut lead times. Total lifecycle ownership Information as a product OEMs as digital integrators 3D printing

Reimagine $ Business models Business processes We also need to reimagine business processes. Digital transformation enables many new approaches. These include: Programs to measure reliability using the Internet of Things Smarter, connected manufacturing Real-time, responsive supply chains And redesigned customer service Total lifecycle ownership Information as a product OEMs as digital integrators 3D printing Programs to measure reliability using the Internet of Things Smarter, connected manufacturing Real-time, responsive supply chains Redesigned customer service

Reimagine $ Business models Business processes Work Day-to-day working life is changing. We now see: There is increased automation thanks to digital technology. People are working with technology that is predictive and self-learning – so they can act to prevent issues before they occur. Big Data provides insights into operations and the way equipment is performing to support effective decision making. Interactive technologies help us collaborate more effectively with colleagues. Meanwhile, standardized data platforms provide a single source of the truth. Total lifecycle ownership Information as a product OEMs as digital integrators 3D printing Programs to measure reliability using the Internet of Things Smarter, connected manufacturing Real-time, responsive supply chains Redesigned customer service Automation with digital technologies Predictive and self-learning Big Data Interactive technologies Single source of truth

Suppliers & networks Customer experience Workforce engagement loT & big big data Security SAP HANA Platform Digital Core SAP can support your digital transformation by offering a digital framework for the entire value chain. You can: Replatform core business processes and provide a single source of the truth. Create a more effective and better-engaged workforce with easier access to more in-depth information and management by exception. Automate and optimize processes using Internet-of-Things technology. Optimize the entire value stream to meet customer expectations better. Improve collaboration across the organization and beyond to drive business value.

The solution automatically triggers a maintenance demand. Efficiently dispatch field technicians Manage contract profitability Automatically predict component failure Optimize maintenance resources Auto-source spare parts and personnel by searching the business network Purchase parts using a user-friendly Web interface Automatically trigger maintenance demand Route parts to the maintenance location Here’s just one example of how the digital networks can streamline maintenance processes to reduce costs and downtime. Here we can see that aircraft sensors are feeding telemetry data (that includes temperature, vibration, and pressure readings) and fault codes to a central software solution. This data enables the solution to automatically predict the failure of a particular component. The solution automatically triggers a maintenance demand. In response to this, field technicians are efficiently dispatched to resolve the issue. The software automatically sources the correct spare parts and appropriate personnel by searching the company’s business network. In this way, the company optimizes its maintenance resources. The operator purchases the parts through a user-friendly interface. The software routes the spare parts to the maintenance location. And the company manages its contract profitability effectively. Aircraft sensors feed telemetry data and fault codes to a central system

Increased service revenues and improved customer satisfaction Faster response to critical maintenance scenarios Lower maintenance costs and improved service efficiency Reduced aircraft downtimes Increased asset availability and safety Better planes By using digital technology across this process, the aviation company achieves: Increased service revenues and improved customer satisfaction Faster response to critical maintenance scenarios Lower maintenance costs and improved service efficiency Reduced aircraft downtimes Increased asset availability and safety Better planes

Why trust SAP? More than 1,000 aerospace and defense companies run SAP software. 9 out of 10 of the world’s top most-admired aerospace and defense companies are members of the SAP Advisory Council for Aerospace and Defense. So – why trust SAP? Quite simply, we’re the choice of leading aviation companies around the world. Over 1,000 aerospace and defense companies run SAP software. In fact, 9 out of 10 of the world’s top most-admired aerospace and defense companies are members of the SAP Advisory Council for Aerospace and Defense. Source: SAP analysis of Forbes 2000 rankings (May 2013) and SAP customer database as of May 2013