Project Management Institute

Connecting Flights

Malaysia's New Role in the Aerospace Manufacturing Sector Requires Teams to Sharpen their Project Management Chops

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Megat Shahrul Azmir, UMW Corp. Sdn. Bhd., Shah Alam, Malaysia

BY SARAH FISTER GALE

PORTRAITS BY RICHARD HUMPRIES

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ISTOCKPHOTO

Air travel in Asia Pacific is taking off.

More than half of all new global passengers between 2017 and 2036 will originate in the region, according to the International Air Transport Association. Routes to, from and within Asia Pacific will see an additional 2.1 billion people each year by 2036. Malaysia's government saw this seismic shift coming years ago. With more planes needed in Asia, the country is stepping up with new projects and initiatives to help build them—and to elevate its role in the commercial aerospace sector.

The government's Malaysian Aerospace Industry Blueprint 2030, created in 2015, aims to make Malaysia a hub for aircraft component design and manufacturing projects by the end of the next decade. The underlying goal is to spur steady economic growth. It seems to be working: The value of exported aerospace products rose more than 50 percent from 2016 to 2017, and the sector's growth will exceed 8 percent annually for the next 20 years, according to a November 2017 Frost & Sullivan report. Major global players including Rolls-Royce, Airbus and Spirit AeroSystems have ramped up their presence in the country in recent years, establishing supply-chain relationships with teams at locally owned organizations.

“Several factors are driving the industry's shift to Malaysia,” says Nishant Dey, consultant, Frost & Sullivan, Kuala Lumpur, Malaysia. One of them is government support of aerospace industrial park projects, which has helped the industry mature and ensure local organizations benefit, he says. “The government has played an important role in building the industry up.”

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—Nishant Dey, Frost & Sullivan, Kuala Lumpur, Malaysia

Recent government-backed projects include the MYR1.7 billion Asia Aerospace City in Kuala Lumpur. The facility provides engineering and R&D facilities for equipment manufacturers. Construction has begun on the government-backed Subang Aerotech Park project in Kuala Lumpur, which will deliver a 179,000-square-foot (16,630-square-meter) facility to support aerospace manufacturing projects. The first phase will be completed later this year.

This government-driven approach to developing aerospace industrial parks has allowed fledgling firms to take advantage of “built-to-suit” facilities. But teams also have encountered project management challenges. “Typically in Malaysia, project management in the infrastructure industry hasn't been great,” Mr. Dey says. The biggest obstacle is delays in disbursement of funds and inadequate financing, which impacts procurement. Bureaucratic red tape also creates delays. Mr. Dey estimates that the schedules of at least half of all recent major infrastructure projects in Malaysia—across all sectors, not only the aerospace sector—had to be extended by at least 10 percent because of red tape and missed deadlines.

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UVM plant in Serendah, Malaysia

PHOTO COURTESY OF ROLLS-ROYCE

KNOWLEDGE UPGRADE

The greatest challenge facing Malaysia's aerospace sector, however, is its talent gap. The fast-growing market requires more mature talent to manage design and development projects, but there aren't enough trained engineers and project managers to fill every role. Most foreign organizations that have set up facilities in Malaysia are sending project professionals there to head up projects and train local talent, Mr. Dey says. Along with teaching local teams how to design and build complex aircraft components, the experienced talent shares project management expertise, including how to set milestones, manage risk and meet critical project goals.

“These expats invest time in knowledge transfer to get local talent up to speed,” he says.

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A rendering of the Asia Aerospace City project in Kuala Lumpur, Malaysia

But expatriates alone can't close the talent gap. Once again, the government is playing a key role in maturing the sector. It is working with local colleges and international institutes to develop courses that meet industry needs—including project management training and certification, says Shamsul Kamar Abu Samah, Kuala Lumpur, Malaysia. He leads the National Aerospace Industry Coordinating Office (NAICO), a new unit of Malaysia's Ministry of International Trade and Industry (MITI). “We are creating a talent ecosystem that can grow with the industry,” Mr. Shamsul says.

For example, NAICO also is working with the University of Kuala Lumpur's Malaysian Institute of Aviation Technology to develop a master's degree in aviation management. The degree program's curriculum aims to equip aerospace project executives and managers with advanced project management and supply chain management skills.

Mr. Shamsul believes all of these investments are giving local companies and global aerospace firms in Malaysia the confidence to take on bigger projects. “Aerospace is a very complex industry,” he says. “We need trained program and project managers to ensure we are doing it right.”

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—Shamsul Kamar Abu Samah, National Aerospace Industry Coordinating Office, Kuala Lumpur, Malaysia

CASE STUDY

Taking a New Route

A Malaysian manufacturer collaborated closely with a global powerhouse to complete its first aerospace project.

UMW Corp. is one of Malaysia's oldest and largest industrial conglomerates. With a long history in the automotive and equipment sectors, the 100-year-old company needed help to ensure a smooth takeoff when it expanded into aerospace in 2015. That year, the UMW M&E signed an agreement with Rolls-Royce to build a MYR750 million, 275,000-square-foot (25,548-square-meter) plant on undeveloped land north of Kuala Lumpur. The project team had to design and construct a facility that would manufacture fan cases for the Rolls-Royce Trent 1000 and Trent 7000 aero engines, which power the Boeing 787 Dreamliner and Airbus A330neo aircrafts, respectively. And the team had to do it in 27 months.

This was a new project challenge. While the company had plenty of experience producing low-value automotive parts, for the first time its teams were tasked with producing high-value aerospace parts that are highly complex and highly regulated, says Megat Shahrul Azmir, president, manufacturing and engineering division, UMW Corp. Sdn. Bhd., Shah Alam, Malaysia. The move was fraught with risk.

“We knew we were out of our depth. We had to unlearn everything we thought we knew and start with a clean slate,” Mr. Azmir says.

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—Megat Shahrul Azmir, UMW Corp. Sdn. Bhd., Shah Alam, Malaysia

ISTOCKPHOTO

Although UMW had standardized project management practices, the team was faced with a new level of complexity. In the aerospace sector, Gantt charts can have thousands of line items and hundreds of milestones that need to be tracked daily, Mr. Azmir says.

To soften the learning curve and help the UMW team understand an unfamiliar risk landscape, Rolls-Royce sent a team from the United Kingdom to Malaysia to transfer project management best practices. The team also shared many project management tools, including a formal reporting process and S-curve milestone tracking. The UMW team solicited feedback on its integrated project plan and risk management template.

“The governance structure and measures were jointly discussed and established, taking into account both companies’ operating rhythm and business interests,” Mr. Azmir says.

The visiting team also helped the UMW team build a high-performance culture focused on a common set of values prioritizing safety, deliverables, teamwork and accountability. “The adoption of a common vocabulary helped to facilitate team bonding in a positive way,” he says.

Mr. Azmir hosted weekly meetings throughout the project to reinforce the importance of hitting milestones. During those meetings, teams shared progress reports and goals for the coming week. “It was important that I had very clear, on-the-ground information about what was happening,” he says.

READY FOR REVIEW

It was also important that his commitment to the project was highly visible to UMW team members. Mr. Azmir wanted the team to be comfortable turning to him for support when unexpected challenges occurred—and they did. Most notably, these challenges stemmed from external audits and regulatory reviews to ensure UMW was meeting global standards for safety, quality and reliability.

“Safety is such an important issue in the aerospace sector that everything has to be over-engineered and redundant,” Mr. Azmir says.

Because commercial aircraft operate in global markets, the team expected to be audited by regulatory agencies from other countries, including the United States Federal Aviation Administration and China's civil aviation administration. But because it was UMW's first aerospace plant, regulators required additional audits—each of which added between 15 and 30 days to the project's timeline. “This is a major reason aerospace projects tend to come in late,” he says.

Aware that regulators would have the project on their radar, Mr. Azmir took steps to mitigate the impact of audits on the schedule. He brought on additional human resources to deliver portions of the project in parallel so other portions held up by outside reviewers didn't bring all work to a halt. “It cost us more, but the timeline was more important,” he says.

The strategy worked. The UMW facility was completed one day early in October 2017, and UMW delivered its first fan case to Rolls-Royce the following month. The successful completion of the project makes UMW the first tier 1 aerospace engine component manufacturer for Rolls-Royce in Malaysia, Mr. Azmir says. (Tier 1 suppliers send components directly to the equipment manufacturer that created the overall supply chain.) “Our relentless commitment to project management helped us get there.”

He believes the successful collaboration between Rolls-Royce and UMW will provide a roadmap for other aerospace companies looking to build advanced components in Malaysia.

“It was like a marriage. It took a lot of blood, sweat and tears, but we got it done, and we are happy to share the lessons we learned.” PM

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Changi Airport, Singapore

Eastward Shift

Asia Pacific will be the lead driver of global air travel in the coming years. As airlines look to grow fleets in the region, aerospace giants’ supply chains are shifting toward growth areas—sparking lots of aircraft component project action.

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GLOBAL BREAKDOWN

Air passenger growth rates expected around the world between 2017 and 2036.

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Source: 20-Year Passenger Forecast, International Air Transport Association, 2017

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

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