Industries · Industrials and mobility
Industrial manufacturing, machinery and aerospace
How makers of machines, equipment and aircraft earn money over decades: the first sale, then the aftermarket from a growing installed base. Covers backlog and book-to-bill, overall equipment effectiveness (OEE), make or buy decisions, the tiered supply chain, and the aerospace ramp-up.
Key takeaways
- An industrial company earns money twice: once when it sells a machine, and then for many years from spare parts, service, upgrades and software for that machine.
- In industrial companies, a small share of revenue from services can earn a large share of profit, and a factory usually loses output in three places: stops, slow running and defects.
- Industrial cases usually ask how to grow services, raise factory output, cut cost, or decide where to build.
- Explain why aftermarket services often earn more profit than new equipment
- Read backlog, order intake and book-to-bill, and say what they mean for the future
- Calculate OEE and use it to find where a factory loses output
- Make a make-or-buy decision using relevant costs, not allocated costs
- Crack typical industrial and aerospace cases, starting with the right driver
Lessons
How industrial companies make money: equipment, aftermarket and backlog
What industrial and aerospace companies sell, to whom, why the installed base matters, and the metrics used to track orders and service.
Industrial economics and operations: installed base, OEE and make or buy
Why services can earn most of the profit, how to measure a factory with OEE, how to decide whether to make or buy a part, and how the tiered supply chain works.
Industrial and aerospace players, trends 2024 to 2026, and how to crack the cases
Who the players are, the aerospace ramp-up, other trends, regulation basics, typical prompts, traps and drills.
Worked cases in this module
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Key terms