Aerospace & Defense

Aftermarket & Services

Helping clients capture the aftermarket potential—the largest source of untapped value in aerospace and defense—by assessing the installed base opportunity, improving pricing, and optimizing operations

 

What does it take to win in the aftermarket? The landscape here is much different from new-equipment sales, but many aerospace and defense (A&D) companies have not yet refined their approach for identifying opportunities, targeting customers, pricing spare parts, upselling, or expanding into new geographies.

We have helped clients worldwide capture more value from the aftermarket and recognize the unique challenges in this space. Our global expertise, combined with our proprietary tools, allows us to craft strategies that help clients develop a thriving aftermarket business.

What We Do

Commercial strategy
Our insights can help with sales planning, account management, value pricing, market penetration, and creation of aftermarket-service offering.
Operations
We work with clients to improve all operational areas, including sourcing management, general operations, supply-chain performance, and cost optimization for spare parts by applying design-to-value and standardization technique.
Organizational processes and systems
In addition to examining organizational structure, we help clients forecast their talent needs, improve performance management, and develop strong incentives to motivate talented staff.
New growth levers
We help find the best growth opportunities within the aftermarket by looking at all potential sources, including M&A, the provision of new or digitized services, and the creation of new contracts and service models.

Examples of our work

Identifying and capturing opportunities
A defense company was consistently performing below potential for aftermarket service orders because it focused on selling new systems. With our assistance, the client developed digital solutions to identify aftermarket opportunities. It also instituted capability-building programs to improve the aftermarket salesforce, created better commercial campaigns, and optimized inventory and procurement operations for spare parts. To monitor progress, we helped update tracking processes for all commercial opportunities. Our solutions helped increase the client’s aftermarket service orders by more than 40 percent.
Market analysis and insights
An aerospace player wanted to become the top aftermarket services provider in its sector but knew little about the installed base. The company also relied on a “cost-plus” pricing strategy, rather than looking at the perceived value of parts and services to clients. To help the company improve, we developed an analytical model that estimated the size of the aftermarket opportunity. We also helped identify upselling opportunities, optimize spared-parts pricing, and explore geographic expansion. Our recommendations increased aftermarket service revenues for the commercial fleet by over 10 percent within two years, and additional gains are expected.

Featured Capability

Periscope by McKinsey

Periscope

Periscope is the technology backbone of McKinsey’s Marketing & Sales Practice. It combines world-leading Intellectual Property, prescriptive analytics and cloud-based tools, with expert support and training. This unique combination drives revenue growth – now, and in the future.

McKinsey Service Benchmark

Featured Experts

Joanne Braganza
Leads McKinsey’s Maintenance, Repair, and Overhaul (MRO) service line and advises clients across strategy, digital, and operational topics in aerospace and beyond
Markus Forsgren
Advises and serves primarily industrial clients across Europe, with a focus on growth and services business building.
Vik Krishnan
Advises companies in the aviation, travel, and aerospace sectors on operational-performance improvement, digital transformation, and growth
Hugues Lavandier
Advises energy, mining, and OEM companies on growth and portfolio strategies and evaluates corporate-finance opportunities; supports investors and private-equity groups in the commodities and industrials sector
Simone Vesco
Leads the advanced industries sector in the Mediterranean office and our industrial services work in Europe, the Middle East, and Africa (EMEA), serving clients on strategy, marketing and sales, operations, working capital, and aftermarket and services transformations

Featured Insights

A U.S. Air Force F-15E Strike Eagle aircraft waits to take part in a training mission at Seymour Johnson Air Force Base, North Carolina.
Article
Improving military aircraft sustainment to strengthen Europe’s defense
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With European NATO countries seeking to rapidly expand their defense capabilities, we explore how maintenance, repair, and overhaul providers could improve operations to enhance mission readiness.
An engineer working on the engine of a commercial airliner in a large, airy hanger.
Article
What does the future hold for commercial-aviation maintenance?
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Demand for maintenance, repair, and overhaul services is trending up in commercial aviation, but the factors responsible for that increase will shift over the next decade.
Engineers working with jet engine turbine blade in aircraft maintenance factory
Report
Why aftermarket and service are vital to OEMs—and how to excel
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A comprehensive approach, supported by a strong enabling organization, can help B2B industrial manufacturers tap into the value of aftermarket and service.

How We Help Clients

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