If you are a manufacturer producing and selling products into the aerospace and defense (A&D) sector, you know full well that today a competitive advantage is not only critical to success, but quite likely essential to survival.
Consider the market for heavy transport passenger aircraft. For many years, this market was dominated by a few US-based companies. McDonald Douglas, Boeing and Lockheed were the major players. There were some others, but the lion’s share of this market was in the pockets of these three.
Airbus comes along and suddenly the market is getting crowded. Lockheed bows out following the L-1011, and Boeing acquired McDonald Douglass. Airbus and Boeing continue to slug it out, while under their noses Canada and Brazil are taking increasingly large bites out of the lower-end regional jet space. Russia, Japan and China are starting to push products into the lower end of the market as well. There is no reason to assume that the new guys will be content to stick with the 100-seat aircraft segment.
This type of consolidation and competitive expansion is not unique to the passenger aircraft segment of A&D. It extends well beyond that into the second and third tiers of the A&D supply chain as well.
If you are participating in this market space, even on the periphery, now is not the time to get comfortable and relax. You had better be thinking in terms of defining and strengthening every competitive advantage you can identify.
I have often looked at Cincom’s customer base and wondered why we have so many successful customers in the aerospace and defense sector. Is there something special about our product? Do we offer some kind of unique feature, benefit or advantage that makes our solution stand out among others offered by larger, more recognizable companies?
In short, I wanted to figure out what our competitive advantage was in this space and how did we leverage that.
What Makes A&D Unique?
First, what is the composition of this market? What are some common characteristics found among participants in A&D?
• Aerospace-oriented products
• Defense/Government-oriented customer base (not exclusively, but frequently)
• Program/Project Manufacturing orientation
• Frequent involvement with government contracting
• Products are typically highly engineered
What else do A&D manufacturers have in common? Most maintain job shops turning out discrete products in a repetitive manner. From the standpoint of inventory, they are more diverse, covering make-, assemble- and engineer-to-order products and some make-to-inventory products as well.
Participants in the segment are disposed to manage costs in a variety of ways including standard methods, average actual, project based and activity-based costing.
Other characteristics include a high level of regulatory compliance, participation in the primary, secondary and tertiary market tiers and mixes of the same.
What Makes Cincom Unique?
When I examine Cincom as a participant in this sector, I see three primary areas where we deliver strength to manufacturers of A&D products and components
1. Technology
The technology we sell is well suited to the business environment described above. Our offerings cover this area from end to end with no gaps. Additionally, since we are a Best-of-Breed solution, our parts are typically not just offering acceptable performance; they tend to offer exemplary performance for the specific tasks they are designed to accomplish.
Best-of-Breed does raise some eyebrows with the natural skepticism around the ability to integrate the disparate technologies into a unified solution. (I won’t use the somewhat trite phrase, seamless integration even though it is entirely appropriate in this instance) Cincom technology includes a powerful facility behind the scenes. Environ ®is almost magical in its ability to interface disparate data, processes, people and systemic communication into a singular image.
2. People
This is indeed a truly unique asset of Cincom. I know that every company says this about their workforce, but Cincomers working this practice are well versed, highly experienced and quite at home in the aerospace and defense sector. Most come from that environment either as former customers, ex-military or as members of the analyst community.
Our people don’t just read a couple articles and subscribe to industry newsletters, they think, live, eat and breathe A&D and have for much of their professional lives. They truly have a passion and love for their work.
3. Business Conduct
Finally, I looked at how Cincom conducts business. In terms of functionality and value delivered our pricing is far below that of our competitors. Additionally, our flexibility in terms of contracting vehicles is without peer. We offer license purchase plans, rentals, subscriptions and leases. We will do everything we can to make it easy for our customers to choose us and to conduct business with us over the long term.
These three elements, technology, people and customer responsiveness are the centerpiece of our own competitive advantage. Combining these three winning advantages allows Cincom to deliver systems that don’t just fix problems or make things work better. Cincom delivers transformational improvements that allow our users to leapfrog their competition and begin defining their markets on their own terms.