Reduction of Development Payments for the PW1100 Engine of the Airbus A320
Company:
MTU AeroEngines AG, Munich, Germany.
Situation:
Under the international “Risk and Revenue Share” agreement with Pratt & Whitney (USA) and JAEC (Japan), development cost payments have significantly increased.
Objective:
The goal is to gain acceptance for a payment methodology and reduce payments within the consortium.
Measures:
Development of an evaluation methodology for development efforts.
Ensuring acceptance of cost evaluation.
Implementation of a regular evaluation process, acceptance of results, and approval of payment instructions.
Definition of Key Performance Indicators (KPIs) and reporting to respective C-level/Boards.
Regular review of the methodology.
Results:
Application of the methodology and cost evaluation is implemented.
Management reporting structures are established.
Fine-tuning of processes and continuous improvement of evaluation are implemented.
Savings for the client through process optimization: A high double-digit million US-Dollar amount as an annual “cash-out” saving.