View transcript - Rolls-Royce
View transcript - Rolls-Royce
View transcript - Rolls-Royce
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We’re also spending a lot of time developing the services opportunities for<br />
the markets, as they’re evolving. Some customers are moving more towards<br />
a long term service model. Some are trying to figure out what the approach.<br />
The one dynamic that’s of interest in this<br />
market, to me, particularly, is that, as budgets get constrained, and as<br />
people run into budgetary issues, they actually tend to look more and more<br />
at the “TotalCare” model, the long term service models, because they’re<br />
actually usually more cost efficient than their own approach.<br />
Because we get to spread the cost, we get to take the efficiencies across that<br />
broad portfolio.<br />
I mentioned the breadth and depth of customers we have around the world.<br />
When we can leverage the spares pipeline and we can leverage the<br />
infrastructure we have in our logistics train, and make sure that we are<br />
servicing all of our customers, we can do it a lot more cost effectively. So,<br />
they’re all looking at availability contracts, just as Mark described in civil.<br />
We can guarantee that mission criticality – that they will have the engine<br />
when they need it for their mission, anywhere around the world, 24/7. And<br />
they can have it to produce the capability that they need. It’s all well and<br />
good to have a large pipeline of spares, but if they don’t have the right<br />
engine at the right time and the aircraft isn’t able to eventually perform the<br />
mission – so it turns into reliability of the product as well with guaranteed<br />
reliability in the defence market, we can provide that kind of service.<br />
Again, it gives our customer the confidence so they can complete their<br />
mission. To do that, we continue to invest in our own capabilities, One of<br />
the nice things about the high level of integration across the <strong>Rolls</strong> <strong>Royce</strong><br />
group, is that we get to leverage each other’s strengths. So, actually the first<br />
operation centre started up in Derby in the civil business. We now have an<br />
operation centre in defence in Bristol that’s running 24 hours a day, 7 days<br />
a week that’s monitoring numerous customers around the world and all<br />
their products.<br />
And, as we learn things about the defence business, we get to feed that right<br />
back into Mark’s business as we learn things and how to run our operation<br />
centre more efficiently. So, we improving that, we’re improving our<br />
response times, we’re broadening our capabilities, we’re putting more<br />
engine types into that kind of Total Care solution, and that’s helping all of<br />
our customers.<br />
So, this is just a glimpse of the current portfolio today, inside of defence. It<br />
shows how we break out. You can see two key numbers very quickly –<br />
52% of the defence portfolio is service, and also, 52% is in the transport<br />
segment. So, you can see transport and ISR are two very strong market