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.