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87 percent of aerospace suppliers show
weaknesses in internationalizing their business
European study about internationalization and
competitiveness of aerospace suppliers published by
management consultancy h&z under the patronage of
BDLI, the German Aerospace Industries Association
Munich, 11 September 2012 – Global business provides a number of
pitfalls for aerospace suppliers. 87 percent of them lack skills and
knowledge necessary to sustain their position in international
competition. This is one of the results of a study by the management
consultancy h&z. “In the medium term, only 70 percent of the supplier
companies will remain in the aerospace industry”, says Michael Santo,
Managing Partner of h&z. The patron of the study is Arndt
Schoenemann, Vice President Equipment and Materials of the German
Aerospace Industries Association (BDLI).
Main strengths and weaknesses of the supplier industry
As airplanes are increasingly being developed and built in global supply
chains, suppliers have to be capable of internationalization to be successful
in this business. The results of the study show: whereas almost all of the
large suppliers surveyed already meet customer expectations to a large
extent, this only applies to 51 percent of the small and medium-sized
enterprises (SMEs). The other half of them exhibits substantial weaknesses
in internationalization. Michael Santo of h&z takes a look into the future: “It
will take up to ten years and substantial investments until the smaller
suppliers will have developed all necessary skills.” This means that the
aerospace supplier industry has to get ready for a major transformation
process, as SMEs make up more than 80 percent of the suppliers. “Their
internationalization capability is the central success factor for future aircraft
programs”, Michael Santo says.

In former times suppliers used to convince customers with their technological
niche competence in development and manufacturing – but today that is not
enough. The study reveals that now a much more diversified portfolio of skills
and know-how is necessary to be part of international aerospace business.
On the basis of 22 criteria h&z investigated to which degree companies
already have these competences. The criteria focus on skills and knowledge
concerning product and service offer, customers and markets, and relevant
internal processes concerning for example contractual matters and
international financing.
• The main weaknesses: Especially small suppliers lack the skills and
competences that are needed to support international business, e.g. risk
management, sub-supplier management, financing know-how, as well as
knowledge of export and import procedures.
• The main strengths: The suppliers score with their technological expertise
and their flexibility with regard to customer wishes. Additionally, they provide
the most important aerospace certifications and can rely on qualified
personnel with good English skills.
On the road to international business
As individual efforts alone will not be sufficient, they will have to be
complemented by joint actions along the whole aerospace supply chain. In
addition to aircraft manufacturers (OEMs), government authorities,
chambers, and associations have to support the companies with tailored
offers. These organizations already provide a broad portfolio of support
measures, which covers a company’s requirements in the internationalization
process to a large degree. But there are major obstacles: on the one hand,
many of these measures are not suited to the needs of the aerospace
industry, and on the other hand, really suitable measures are not broadly
known to suppliers. To change this, support organizations have to cooperate
and make their offers more transparent. The supplier companies surveyed
wish for more support from government authorities, chambers, and
associations, especially with regard to project financing (61 percent).

Additionally, they would appreciate the provision of market and industry
analyses (46 percent) as well as support in establishing contacts to potential
customers (44 percent).
Study design and methodology
135 European aerospace suppliers took part in the study and completed an
online questionnaire. 79 percent of the participants were SMEs. In addition,
12 interviews with aerospace OEMs and large Tier-1 system suppliers were
conducted to examine whether and to which degree their capabilities meet
customer expectations. The study’s aims are to systematically analyze the
European aerospace suppliers’ internationalization capability, to assess the
role of government authorities, chambers, and associations in the
companies’ internationalization process, and to find starting points for the
improvement of competitiveness.

About h&z Unternehmensberatung AG:
h&z is one of Europe’s leading consultancy firms for business transformation, specializing in
procurement, production, sales, and service. The company has offices in Munich, Düsseldorf,
Dubai, Paris, Vienna, and Zurich. For 15 years, large corporations and renowned medium-
sized enterprises from all industries have relied on the expertise and experience of h&z. True
to the motto “Consulting with head, heart, and hand”, more than 100 employees create
innovative solutions and implement them consistently. 98 percent of clients are repeat clients.
In 2011 h&z was awarded the Great Place to Work® seal of approval as part of the nationwide
“Germany’s Best Employer 2011” competition in recognition of its quality and attractiveness as
an employer. In 2012 the company received the Hidden Champion Award in the category
“Business Excellence” from the Wissenschaftliche Gesellschaft für Management und Beratung
(WGMB; Scientific Society for Management and Consulting) in cooperation with the business
magazine Capital and the Financial Times Deutschland. You can find out more about the
company at www.huz.de.
General Press contact:
h&z Unternehmensberatung AG
Dr. Detlef Tietze
Phone: +49. 89. 24 29 69 62
Fax: +49. 89. 24 29 69 99
E-mail: presse@huz.de
For any inquiries relating to the contents of the study please contact:
h&z Unternehmensberatung AG
Michael Santo
Email: michael.santo@huz.de
h&z Unternehmensberatung AG
Munich • Düsseldorf • Dubai • Paris • Vienna • Zurich
Executive Board: Stefan Aichbauer, Rainer Hoffmann, Michael Santo, Dr. Thomas Zachau
Chairman of the Supervisory Board: Dr. Erich Hautz
Commercial register: Munich HRB No.: 132013
Company headquarters: Munich
www.huz.de