By Building Next-Gen Jets in Record Time, Brazil's Embraer Soared to New Heights
BY SARAH FISTER GALE
PORTRAITS BY CLAUS LEHMANN
PHOTO COURTESY OF EMBRAER
From left, Leandro Laia, Fernando Antonio Oliveira, Luís Carlos Affonso and Mauricio Almeida
Like any leading aerospace company, Embraer is driven by a mission to aim higher. The company ranks as one of the world's largest commercial jet manufacturers, but with newer, more fuel-efficient engines threatening to make its top-selling aircraft obsolete, Embraer launched a project to roll out a new family of airplanes—and fast.
Started in 2013, the US$1.7 billion E2 program was designed to reimagine the company's signature E-Jets, delivering a next-gen jet for regional airlines around the world. Compared to the existing E1 series, the new jets would have more powerful engines, more aerodynamic wing architecture, state-of-the-art flight controls and improved interiors with a focus on delivering a benchmark customer experience.
But the team had to deliver the new jets in record time. Embraer project leaders set an ambitious goal to hand over the first model, the E190-E2, to its launch customer in just five years—at least two years faster than any other jet of its generation. If the team could pull it off, the E2 program promised to help regional airlines around the world increase their margins by spending less on fuel costs and attract more passengers. But there were massive risks for Embraer.
“It needed to be ready on time, because, imagine that when you are late by one year, nobody would want the previous generation,” says Luís Carlos Affonso, senior vice president, strategy and innovation, Embraer, São José dos Campos, Brazil. “For a year we would not have 50 percent of our revenue, so it would be a huge impact.”
—Luís Carlos Affonso, Embraer, São José dos Campos, Brazil
June 2013: Embraer board of directors approves E2 business plan.
October 2014: Manufacturing of first E2 prototype part begins at Embraer's Évora plant in Portugal.
February 2016: First completed prototype is rolled out in São José dos Campos, Brazil.
May 2016: The E190-E2 completes its test flight, with three first-flight world records.
July 2016: Embraer unveils the E2 at the Farnborough International Airshow in England.
February 2018: The E2 is certified by regulatory agencies in Brazil, Europe and the United States, and becomes the first jet to earn triple certification in one day.
April 2018: Embraer delivers the E2 to its first customer. Norway's Widerøe Airlines completes the jet's first revenue-generating flight less than three weeks later.
PHOTO COURTESY OF EMBRAER
Embraer employees celebrate the delivery of E190-E2 jets.
To build the dream machines, Embraer assembled a core team represented by different areas of the company and led by program management. This strong matrix organization went directly to the source, meeting with customer groups before the program launch and then following up with update sessions. For example, one project steering group captured more than 1,000 suggestions by showing engineers, mechanics and other stakeholders pictures of the aircraft and asking them to tell the company what they liked and didn't like via sticky notes. Those likes and dislikes revealed that customers wanted a jet with a more spacious cabin to improve the passenger experience, more powerful and fuel-efficient engines, and highly reliable technology that would cut maintenance time. The jets also needed to deliver an intuitive flying experience that allowed pilots to transition from the E1 jets to the E2 jets within a very short training period.
By asking its customers what they really needed in a new jet, Embraer identified more than 18,000 requirements that would define the scope. Above all, the research showed that customers needed an aircraft that would deliver immediate value by being as robust, mature and reliable as their existing airplanes on day one.
Embraer responded with a slew of new innovations. One change: incorporating fly-by-wire control systems to help reduce aircraft movement during turbulence and thereby improve passenger comfort. The technology helped contribute to a 20 percent lower trip cost compared to similar planes and 10 percent lower operating costs versus competitors’ planes. By reducing operating costs, airlines can explore new markets, expand access to flights and lower ticket prices.
“We didn't just ask them what would be good for us to develop; we asked what would really add value on their business,” says Leandro Laia, vice president, programs, commercial aviation, Embraer. “Business value was the most important thing. It's a complex product with a complex value proposition.”
—Leandro Laia, Embraer
SUPPLIERS AND DEMAND
Before a single part had been engineered, the program had accumulated 365 orders, with hundreds more secured before the first jet's delivery in April 2018. To ensure it could procure the materials, sensors and parts used in the new design, Embraer bolstered its supply chain, drawing in partners from around the globe, including the United States, Canada, Europe, Brazil, Mexico, South Korea, the Philippines and India.
Expansive collaboration required a clear and shared vision. So project managers prioritized the critical path and adopted an agile approach to problem-solving. For example, when the testing of a particular flight technology didn't go as planned, one project leader started hosting weekly meetings with the supplier's CEO and added human resources and innovation workshops with the supplier team. Because Embraer had built a more agile culture, there wasn't the typical red tape around reshuffling resources, and it wasn't an issue to bring on additional help to solve the problem, says Mr. Affonso.
The team also kept the lines of communication flowing, pressing vendors for steady updates on tasks and ongoing feedback. This was a particular need for building relationships and clear expectations with new suppliers to keep everyone on the same page.
“When you're adding a new supply chain, that's usually where the programs get delays and cost overruns,” says Marcelo Tocci Moreira, new programs—program management office and deputy program director, commercial aviation, Embraer.
By almost any measure, the Embraer E2 program delivered impressive numbers:
Reduction in maintenance cost per seat compared to the previous model
Number of Embraer employees who worked on the program
Number of high-income jobs created in Brazil
Amount in exports the E2 program will drive over the next 15 years
Proportion of company revenues generated by the E2 jet program
Delivering highly complex jets on an aggressive timeline required the team stay on top of risks. Rather than waiting for a project to fall into the red zone, executives and suppliers were trained to recognize and respond to early warning indicators—and get ahead of issues that could cause delays.
“We needed to bring in innovation, but we also needed to have a very solid project management process to guarantee that things are well done,” says Fernando Antonio Oliveira, E-Jets E2 program director, commercial aviation, Embraer. “It was about how to make things happen faster without jeopardizing the beauty of a solid and safe process.”
—Fernando Antonio Oliveira, Embraer
Managing up helped channel expectations and define roles executives could play in accelerating project outcomes. For instance, project leaders held a weekly progress review meeting with C-suite stake-holders, where decisions that required escalation could be addressed. And when problems arose, the core team also helped executives focus on facts rather than playing the blame game.
“We were saying it doesn't matter if it's an Embraer issue or if it's a supplier issue, everyone should help that work package recover,” Mr. Oliveira says.
For example, at one point a piece of electronic equipment shipped from the United States got stuck in customs for several days when agents found termites in the box. The discovery held up the entire program, but because team members shared a mindset of always pushing to get ahead, they had enough buffer in their schedule to ensure the project stayed on track.
PHOTO COURTESY OF EMBRAER
Embraer delivered the first E2 jet almost 20 percent under budget and two months ahead of schedule. Moreover, the team completed delivery up to 30 percent faster than any competitor has with similar aircraft. But airlines didn't have to wait for the project completion to see the jet's value in action: In May 2016, the E2 broke first-flight world records for speed and altitude—all while having flight controls with full automation. Those records proved to customers “that we were developing a mature product,” says Mauricio Almeida, vice president of engineering for commercial aviation, Embraer. “They could be confident that…they would have an airplane that would succeed the current family and perform as good as the current airplanes.”
—Mauricio Almeida, Embraer
Embraer broke the mold to exceed customer expectations. The new jets have only 25 percent in common with their predecessors. Embraer introduced new wing and systems architecture, new engine designs, and state-of-the-art sensors and monitoring technology, among other innovations. The new design also resulted in a significant reduction in fuel consumption, reduced carbon dioxide emissions, quieter engines and increased cabin room for passengers. Plus, pilot training can be completed in two and a half days—compared to the industry standard of 25.
The E2 program unleashed economic benefits, too. It will replace roughly two-thirds of the company's revenues and, over the next 15 years, will be responsible for more than US$25 billion in exports. It's also opened doors to new partnerships across the aerospace sector, including a new deal with Boeing. And it will continue to support local and global supply chain communities with hundreds of thousands of jobs as well as funding most of Embraer's social development initiatives. Throughout the program life cycle, more than 120,000 high-income jobs will be created in Brazil, plus hundreds of thousands more new jobs across the global supply chain. Embraer estimates 11 new indirect jobs in its local community were created for every new job at Embraer.
Delivering value to Embraer's constellation of stakeholders put the company “in a different level in terms of how we are seen as program managers and the ability to execute complex programs,” Mr. Affonso says.
Mr. Laia says the program is a true game-changer. “From my point of view, E2 is something that will really contribute to future programs—and to the overall aviation industry.” PM
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