Digital Evolution in Singapore’s Aerospace Landscape: Transforming MRO Logistics

thumbnail

By 2025, the implementation of predictive maintenance is expected to result in a noteworthy reduction in expenditures, ranging from 10% to 40%, coupled with an improvement in equipment longevity by 3% to 5%. Additionally, a substantial 50% reduction in equipment downtime is projected, according to a report by McKinsey & Company. The economic impact of predictive maintenance in the manufacturing industries across ASEAN is estimated to range between $38 billion and $91 billion USD by 2025.

In the fast-paced expansion of Singapore’s aerospace industry, the integration of digital technologies is redefining the logistics ecosystem critical to key segments of the Maintenance, Repair, and Overhaul (MRO) sector such as aerospace spare parts/components as well as predictive maintenance. MRO service providers are transitioning from traditional 24/7 availability to a new era where digital equipment maintenance and predictive maintenance services play a pivotal role. The digitalization of spare parts logistics emerges as a key trend, shaping the future of MRO in Singapore.

As Singapore continues its ascent in aerospace logistics, the nation has charted a visionary course through the Industry Transformation Map (ITM) from 2022 to 2025. This strategic blueprint is not merely a roadmap but a bold declaration of intent, signaling Singapore’s commitment to carving out a distinctive position and adding a substantial $4.6 billion market value to the aerospace logistics sector. MRO contributes approximately 15% to the country’s aerospace manufacturing output, a testament to its pivotal role in the overall ecosystem.

Singapore is positioned to take the lead in redefining the benchmarks of excellence in the constantly changing field of aerospace logistics as it navigates the opportunities and challenges that lie ahead. As part of this forward-looking strategy, emerging predictive maintenance, digitization and automation solutions allow companies to fully optimize their current processes, smoothing the transition as they build up Industry 4.0 capabilities. For potential entrants, this convergence of predictive maintenance trends with Singapore’s ITM signifies a pivotal moment to not only align strategies with the city-state’s goals but also to actively contribute to a market set for significant growth.

Figure 1: Smart Industry Readiness Index Framework
Source:  Singapore Economic Development Board

The integration of artificial intelligence (AI) into aircraft maintenance, as demonstrated by initiatives like the Civil Aviation Authority of Singapore’s Smart Automated Aircraft Visual Inspection System (SAAVIS) and ST Engineering’s DroScan program, highlights the city-state’s proactive approach to increase the efficiency and reduce turnaround time of MRO operations. Additionally, drones, robotics, and advanced algorithms help MRO companies conduct more accurate inspections and reduce the repair cost associated with previously undetectable damages. These uses emphasize the critical role of technology in the maintenance process.

Global players providing MRO automation and digital transformation expertise will find opportunities not only in Singapore but across other ASEAN markets, especially as MRO companies in the region look to upgrade and enhance their existing systems. As both passenger and commercial air traffic increases, accurate MRO services will be in demand. In 2022 alone, Changi Airport handled an impressive 1,853 thousand tonnes of air cargo, accompanied by a total of 109,246 aircraft landings. These staggering figures underscore the robustness of the aerospace industry in Singapore and the region, pointing towards an upward trajectory in the demand for MRO services.

Source: Singstats (Department of Statistics Singapore)

Companies such as Hermes Logistics Technologies (HLT) are using automation at Changi Airport to streamlines tasks, from loading to warehousing, enhancing operational efficiency and minimizing errors, with advanced tracking systems provide real-time visibility into cargo movements, utilizing RFID technology for transparency and reliability. Since implementation, the Hermes NG Ecosystem has processed more than 50 million kg of cargo, over 3,000 flights, 20,000-unit load devices, and 50,000 air waybills at the airport. Other players in the industry are following suit, such as dnata Singapore, which has implemented digitalization efforts in close relations with HLT. As a result, Changi Airport stands as a testament to the industry’s commitment to embracing technological advancements for a more efficient and streamlined future.

Adding to the momentum, Singapore Aero Engine Services Private Limited (SAESL), the world’s largest MRO facility for Rolls-Royce Trent engines, is modernizing its digital infrastructure in collaboration with Kyndryl, a global technology services and solutions provider. Kyndryl is set to empower SAESL to modernize its digital infrastructure, which includes the delivery of automated service desk management across multiple channels, facilitating a seamless and responsive user experience. This strategic collaboration positions SAESL at the forefront of digital transformation within the MRO sector, aligning with Singapore’s broader goals of embracing advanced technologies. The incorporation of enhanced cybersecurity measures not only safeguards critical MRO operations but also sets a benchmark for industry best practices. SAESL can access a vast array of easily obtainable automation assets by having complete access to Kyndryl GitHub’s repositories, which enhances the overall effectiveness of MRO operations.

Predictive maintenance solution integration is a strategic route to business growth, not just a technical innovation. Companies entering this space have a unique opportunity to position themselves as integral players in the digital transformation towards sustainable and cost-effective aviation operations. The overarching goal is clear: by aligning with trends in data-driven decision-making, customization, and cost-effective solutions, businesses can not only navigate current challenges but actively contribute to and benefit from the unprecedented growth in the aerospace industry. Predictive maintenance isn’t just about preventing issues; it’s about reshaping industry standards, enhancing safety, and ensuring operational reliability. The tangible benefits extend beyond financial savings to encompass enhanced equipment longevity.

The trends within Singapore’s MRO sector, especially the digital transformation of aerospace logistics cargo for spare parts, present a canvas of opportunities for clients. In the face of a cascading supply chain crisis, escalating fuel and input costs, the aerospace logistics and MRO industry not only navigates acute supply constraints but also manages surges in demand as post-pandemic growth continues globally. There is now an emphasis on embracing technology and digitalization as strategic tools to address supply chain gaps and enhance overall customer service efficiency. Singapore’s commitment to innovation and the integration of advanced technologies creates a conducive environment for new entrants to not only navigate the challenges but also actively contribute to and benefit from the unprecedented growth in the digital era of aerospace logistics.


Authored by

Udai Panicker is Country Manager and Pei Wen Ng is a Senior Research Analyst based in Singapore.


Latest Insights

Cash-Rich MNCs Eye Acquisitions in Southeast Asia and Taiwan in 2024 as Family Business Valuations Ease

Cash-rich multinational corporations (MNCs) are increasingly looking towards Southeast Asia and Taiwan for potential acquisition ...

India’s Medical Device Sector: Market Insights and Opportunities for Foreign Investors

The medical device sector in India is currently experiencing more growth than it has seen in the last decade due to the diversified ...