Naveen Poonian is the President and CEO of iBase-t, a global leader in digital manufacturing, quality, and sustainment software for A&D.
Global manufacturing is at a crossroads. Macroeconomic pressures, shifting trade dynamics, workforce shortages and geopolitical uncertainty are reshaping the landscape. While order books remain strong, growth is moderating and capacity is stretched. For executives, the challenge has shifted. It is no longer simply about winning new business; it is about delivering on what has already been promised with speed, quality and efficiency.
Nowhere is this more evident than in aerospace and defense (A&D) manufacturing. Orders remain at historic levels, but so does backlog. RTX recently reported a backlog of more than $200 billion across commercial and defense programs. Industry analysts highlight that suppliers ended 2024 with record order books and are still carrying strong backlog into 2025. This level of demand is both an opportunity and a risk. Without greater efficiency and capacity, delivery schedules slip, margins compress and penalties or reputational damage become real threats.
For years, A&D leaders focused on building capacity to keep up with demand. That imperative remains, but the conversation is shifting. In discussions with my industry peers, the priority is increasingly about executing with precision, reducing waste and running lean operations that can protect profitability while ensuring contracts are met on time. Capacity is still critical, but how you manage your capacity with efficiency is equally decisive.
Sustainment As A Strategic Priority
The same challenge extends beyond new production into sustainment. Aircraft and defense platforms are designed for decades of service, requiring continuous maintenance, upgrades and overhauls (MRO).
When buyers defer new equipment, reliance on these assets only grows. Failures in sustainment don’t just cause downtime; they trigger cascading risks in the form of missed deadlines, increased costs and reputational impact.
The cost of downtime is significant. Frost & Sullivan estimates that aircraft on ground (AOG) can cost airlines $10,000 to $20,000 per hour, and up to $100,000 in lost revenue and additional expenses in extreme cases. For defense equipment, the costs and mission risks are even higher. These figures underscore why MRO efficiency is no longer an afterthought; it is a core part of competitive advantage.
• Downtime drains profitability: every grounded aircraft erodes margin.
• Reputational risks compound: missed deadlines can cost future contracts.
• Operational penalties escalate: compliance issues add financial and legal exposure.
The scale of the industry makes this even more urgent. According to the Aerospace Industries Association, the U.S. aerospace and defense sector generated $955 billion in sales in 2023 and supports over 2.2 million jobs. That kind of economic and strategic weight means customers, regulators and governments expect flawless performance. The cost of failure is simply too high.
From Legacy To Digital Execution
Yet many A&D operations remain stuck with paper-based processes and legacy systems. These create bottlenecks, slow down audits and increase compliance risk. They also make it harder for leaders to get the visibility and control they need to make confident, timely decisions. The industry is already grappling with labor shortages; it cannot afford inefficiency in how it deploys the resources it has.
The solution requires both technology and leadership. Digitally integrated operations allow executives to improve throughput, reduce rework and accelerate compliance. But digital alone is not enough. Leaders must also drive a cultural shift that prioritizes clarity, coordination and control at every level of the organization. Only then can technology deliver its full value.
This is the first in a series of columns that will explore how manufacturing executives can transform operational execution into a competitive advantage. Future pieces will examine practical strategies for building leaner, more resilient operations—particularly in MRO operations.
The bottom line: capacity and backlog remain defining challenges for the industry. Organizations that harness digital execution and lean practices will not only deliver on today’s commitments; they will also strengthen their position to lead when demand accelerates again.
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