TransDigm: The Hidden Giant and the Potential of 3D Printing
When it comes to the aerospace industry, there is one company that stands out from the rest: TransDigm. Despite being relatively unknown to the public, TransDigm has achieved remarkable success thanks to its unique value-pricing model and its relentless pursuit of excellence. Unlike its competitors, TransDigm doesn’t settle for “good” – it goes after “great.” This mindset, coupled with its ability to recognize the value of spare parts in the airline industry, has allowed TransDigm to achieve profit margins nearing 50%, a feat unheard of in any industry.
Founded in 1993, TransDigm went public in 2006 and began acquiring various aerospace businesses. Some of these acquisitions were successful, while others were not. However, TransDigm’s ability to turn these businesses into cost-effective, money-making machines is truly remarkable. In fact, TransDigm has spent over half a billion dollars on research and development in the past five years alone, as shown in the table above.
One of TransDigm’s most notable acquisitions was that of Extant in 2018. Extant Aerospace, as it is now known, specialized in acquiring intellectual property rights to antiquated lines of aircraft parts that airlines would no longer need in the coming years. This acquisition perfectly reflects TransDigm’s ideology of not leaving any money on the table. While these aircraft may still be operational, without the necessary parts, they would become nonoperational. However, with the IP rights acquired by TransDigm, airlines can now use 3D printing technology to fabricate these parts using new materials, at lower costs, and with faster lead times.
TransDigm’s competitors, such as Honeywell and GE Aviation, have also begun integrating 3D printing technology into their operations. This technology allows for generative design, which reduces the number of parts needed in an aircraft component. Furthermore, the implementation of 3D printing can make a company eligible for the Research and Development (R&D) Tax Credit. Wages for technical employees involved in 3D printing activities, as well as the costs of materials consumed during the development process, can be recovered through this tax credit. Therefore, implementing 3D printing technology not only improves efficiency but can also have financial benefits.
While we were already aware that various exterior aircraft parts could be 3D printed, TransDigm’s keen insight has revealed that there are numerous opportunities for 3D printing in creating interior parts as well. With its strategic business tactics, TransDigm is poised to conquer the airplane interior parts market through the use of 3D printing technology.
In conclusion, TransDigm’s success in the aerospace industry is no accident. Its value-pricing model, commitment to excellence, and recognition of the value of spare parts have propelled it to new heights. Now, with the integration of 3D printing technology, TransDigm is ready to take on new challenges and solidify its position as an industry giant. The potential of 3D printing in the aerospace industry is vast, and TransDigm is at the forefront of this innovative revolution.
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