Challenges for Malaysian Aerospace
Engineering Services Players
This sector is very much a niche market for
a developing country like Malaysia. The local
aerospace industry is less mature compared
to developed countries who have had decades
of aerospace engineering work. As a result,
requests for such services from domestic
players are significantly less. This could change
very quickly in the near future as the prime
manufacturers push down more “design and
build” work package requirements into their
supply chain. Although these requirements
and expectations have yet to filter down the
engineering service supply chain, there is no
doubt they will in the near future.
With limited work potential from local industry
players, increased price competition when
entering the global aerospace outsourcing market
(particularly against large established ESOs in
India) and increasing emphasis on suppliers to
take more ownership of the product lifecycle,
the future of aerospace engineering service in
Malaysia, in its current state and form, looks
uncertain.
Despite the huge potential of aerospace
engineering services, the lack of a supply base of
critical size and fragmented nature of the industry
has stunted the further growth of its existing
players. More efforts and a serious commitment
from Malaysia’s business and political leadership
must be made to make Malaysia an attractive
investment proposition to global aerospace
players to set up a base here, and grow their
investments in the long run. Without closer links
and a larger supply base of more aerospace
players, it would be very difficult for aerospace
engineering service companies to succeed or even
sustain operations let alone compete in the global
markets. Gaps in the nation’s human resource
skills, infrastructure development and funding
incentives must be identified and efforts to close
and improve them must be made in short order as
not to be left behind by other regional players who
are also aiming for the piece of the global cake.
In retrospect, engineering service companies
will need to adapt quickly in order to remain
viable in the future. They will need to select the
right innovations and technologies that suit
their business case. As disruptive technologies
enter the engineering domain, the business of
outsourcing work will continue to evolve and
develop but in more sophisticated ways. The term
“Innovate or Die” seems to give a sense of what is
to come, not only for the engineering service sector
but for every business sector as we approach the
beginning of the fourth Industrial Revolution.
REFERENCE
1. “Aerospace Engineering Services Outsourcing
Market Size, Share & Trends Analysis
Report By Service (Design & Engineering,
Manufacturing Suppor t, Securit y &
Certification, After-marketServices)”,https://
www.grandviewresearch.com/industr y-
analysis/aerospace-engineering-services-
outsourcing-market, 2019.
2. Occupational Framework Aerospace Industry,
Department of Skills Development, Ministry
of Human Resources Malaysia, 2017.
3. “Globalization of Engineering Services: The
Next Frontier for India”, Booz Allen Hamilton,
(National Association of Software and Service
Companies), NASSCOM, 2006.
4. “Is outsourcing to blame for Boeing’s 787
Dreamliner woes?” Washington Post, 2013.
5. Engineering Services in Aerospace and
Defence Survey, Accenture, 2010.
6. Airbus in India, https://www.airbus.com/
company/worldwide-presence/india.html
7. “Innovation In Engineering Ser vices
Outsourcing: The Need, Challenges and the
Way Forward”, Dr. T.C.Ramesh, QuEST Global,
2014.
8. “Exponential Technologies in Manufacturing”,
Deloitte, 2018.
9. Airbus Global Market Forecast 2019-2038,
Airbus, 2019.
10. Boeing Commercial Market Outlook 2019-
2038, Boeing, 2019.
11. “A350 XWB outsourcing to be model of new
Airbus production philosophy”, Air Transport
World, 2007.
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