1. Creating Successful New Business Concepts From Old Ideas Jet Parts Engineering, Inc. Steve Johnson

2. Outline Blending Strategies Opportunistic Mixing Recycle the Old
Old to New
Todays PMA
Old Ideas
Implementation – Internal and External
Effect on Industry
PMA Application Old to New
Old Slide Outline
Blending Strategies
Opportunistic Mixing
Recycle the Old
Old Ideas on PMA
Intra-Company and External Company Partnerships

3. Old to New NBA NFL Two 15-minute halves
3 consecutive fouls, opponents receive a point
No 3-point line
No shot clock
NFL
No game clock
Player substitutions were prohibited
No communication from the sideline was allowed
Players from both teams could grab their opponents’ facemasks at will
Old Slide Info
NBA
Two 15-minute halves, with 5 minutes' rest
If either side makes 3 consecutive fouls, opponents receive a point
Out of bounds ball must be thrown into play by the person first touching it
Additional changes to shot clock, 3 point line and hand checking
NFL
No time clocks
Quarterback can’t throw a pass unless he’s at least 5 yards behind the line of scrimmage
Offense begins some plays just a yard from the sideline and is penalized for throwing more than 1 pass during a series of downs
Player substitutions are prohibited
No communication from the sideline is allowed
Players from both teams can grab their opponents’ facemasks at will

4. Old to New - Blending Strategies
Merge the Best of Two Different Business Ideas
Old Slide Info
With a blend strategy we take the best parts of two different business ideas and merge them together to create a new concept that is better than the old concepts were independently.

5. Opportunistic Mixing of Quantitative and Qualitative Information
Takes two opposing beliefs –
Existing ideas are tried and tested through experience
Current methods and data validate existing approach
Adds to the breadth and depth of our conversion of Old ideas to New
Qualitative Approach
Highly experiential with the appearance of lacking in data and detail
Quantitative Approach
Highly analytical but may appear to lack in real life perspective

6. Recycle
Some ideas have been the mainstay of our businesses and strategies but they have become stale, overused or are no longer relevant as they once were
Some of these may need to be recycled just as we do with paper and plastics and metal
Through the recycling process we rebrand the practice or idea and create a new and better product than what we had before
We’ve all heard of his name—the great automobile innovator and entrepreneur, Henry Ford. What a lot of people don’t know is that before he became famous for his automobile and $5 workday, Henry Ford was a debtor who filed bankruptcy twice.
How many times has the idea of the Ford Mustang been “recycled”?

7. PMA Today
2015 PMA Market was about $550 million with a 1.7% penetration
PMA Market last 5 year average of $500+ million
At 40% savings from OEM total savings of $1.67 billion last 5 years
2018 projection of $770 million
Three aspects: logistically (part availability) as well as technically (reliability) and commercially (Warranty improvement – this is a stretch but let’s discuss). What other influences on OEMs other than service level, How did they change their behavior to combat PMAs (Longer term contracts, use their IP to lock in business, others??? Got some of them into MRO business????)
Old Slide Info:
Over last 25 years what has the savings been to the industry?
2012 PMA Market is $460 million
PMA Market last 5 year average of 400 million
At 40% savings from OEM total savings of $800 million last 5 years (I think the math comes out to be 1.33 Billion not 800 million (40 % savings means PMA is 60% of OEM price. OEM price would have been 400/.6= = / year savings *5 = 1.33Billion total))
2018 projection of $770 million – what will the cost savings be then?
Have PMA companies influenced OEM service levels? Three aspects: logistically (part availability) as well as technically (reliability) and commercially (Warranty improvement – this is a stretch but let’s discuss). What other influences on OEMs other than service level, How did they change their behavior to combat PMAs (Longer term contracts, use their IP to lock in business, others??? Got some of them into MRO business????)

8. Old Ideas Related to PMA
PMA parts are bogus or inferior
Airline contracts should exclude PMA
No warranty on PMA
Internal organizational matters
PMA parts cannot be used on leased aircraft
Old Slide Info:
PMA parts are bogus parts
PMA parts cannot be used on leased aircraft
Airline contracts exclude PMA parts from being used
PMA parts are inferior to OEM parts
PMA company warranties are inferior to OEM warranties
History of PMA was negative
Our management prohibits us from using PMA parts
We don’t have the internal processes or infrastructure to approve and accept PMA parts
Our civil aviation authority has restrictions on PMA, DER repairs etc.
Safety and reliability may be in question if we use PMA parts

9. Leasing – Old Concept Lower perceived value
Reduced remarketing opportunity
Financiers push airlines to reject PMA
Leasing community's reluctance towards PMAs
Which brings us back to…
Leads to…
Leasing – Old Concept
Resulting in…
Because…

10. Leasing – New Concept Opportunistic Mixing Blending
Legacy carriers credit improving +
Carriers pushing to allow PMA
Opportunistic Mixing
Quantitative: Leasing companies losing residual value Qualitative: Allowing PMA, increases market size, raising residual value
Lessors incentivized to break the vicious cycle by allowing PMA

11. Leasing – Old Concept Lower perceived value
Reduced remarketing opportunity
Financiers force airlines to reject PMA
Leasing community's reluctance towards PMAs
Which brings us back to…
Leads to…
Leasing – Old Concept
Resulting in…
Because…

12. How Do You Get the Benefit
Change An Old Idea Into Something New:
Establish Partnerships
Intra-company
External
Old Slide Info:
Having Changed An Old Idea Into Something New, How Do You Get the Benefit:
The new idea should be structured with the idea of establishing partnerships whether with a department within your organization or with an external organization outside your company
Intra-company partnerships
External company partnerships

13. Intra-Company Examples
PMA project identification
PMA implementation at airlines
Airline engineers find solutions using PMA or DER repairs
IT & technology
Win/Win relationships workers and departments
Old Slide Intra-Company Partnerships Slide that was deleted
What Are Intra-Company Partnerships?
Partnerships that occur within or take place between branches, departments or employees of a company
These partnerships can be set up as policies, guidelines and practices between groups or individuals
They are meant to hold departments, groups or individuals accountable to support and build better communication channels and agreed upon higher performance levels
These partnerships can be written or unwritten depending on the given situation
The idea is to improve each organization through better departmental and individual performance
Departments are driven by different functions and characteristics like: data, costs, quality, engineering etc.

14. External (B2B) Examples
PMA development contracts
Engineering cooperation between PMA companies and Airlines/MRO
Airline leasing agreements
Long term purchasing contracts
Repair contracts
Joint ventures
Distribution agreements
Gov’t relationships
Civil Aviation Authority agreements and relationships
Manufacturing and technology contracts
Competitor relationships
Old Slide Info:
With new robust ideas internally, company’s can look to refine external relationships including:
PMA development contracts
Engineering cooperation between PMA companies and Airlines/MRO
Airline leasing agreements
Long term purchasing contracts
Repair contracts
Joint ventures
Distribution agreements
Gov’t relationships
Civil Aviation Authority agreements and relationships
Competitor relationships
Manufacturing and technology contracts

15. So what is the end result of “new” ideas!
PMA Industry accelerates growth
OEM’s improve customer service and part availability
OEM’s limit their price increases and “deal” with their operator customers