Global Leaders Series

A conversation with Michel Tellier - VP Aerospace & Defense, Dassault Systèmes

For the last 17 years, Michel J. Tellier, vice president, Aerospace & Defense, Dassault Systèmes, has been helping Aerospace &Defense companies of all sizes grow their businesses and be more responsive to their customers’ needs. A mechanical engineer by training, Tellier launched his career with Bombardier Aerospace where he led the Canadian company’s transition to a 3D digital design-based aircraft-develoment process. He has extensive experience in the implementation of Product Lifecycle Management and global supply chain collaboration. Tellier recently sat down with former Aviation Week & Space Technology Editor-in-Chief Tony Velocci to discuss the state of the A&D industry, including the challenges and opportunities.

Extract

Aviation Week & Space Technology’s recent Top-Performing Companies study revealed that U.S. companies are investing relatively little of their own resources in independent research and development, as a percentage of total revenues, compared with European A&D companies. Is there still a place for such investment, given the current emphasis on affordability and industry’s increased aversion to risk?

There are different ways to measure the value of a company. One measure is the value of its human capital. Engineers like to innovate and create new products. If you are not doing things to attract and maintain the best talent, that is a poor testament to where your business will end up. There is an argument to be made for investing more, rather than less on Independent Research & Development (IR&D) to create a culture of excellence.

Also, innovative, top-performing companies are not defined by their products as much as they are defined by their people. And if you are not providing an environment for them to innovate, you will not attract the best engineers. Google and some other companies are going to great lengths to attract the best and brightest. The aerospace industry is struggling to attract top engineering and technical people in critical areas.

Attracting the best people is the first step toward building the foundation to achieve operational excellence. Second is investing in science and technology. If you underinvest in R&D, you will not create the next generation of products that allow you to differentiate yourself from your competitors and grow your business. Winning more business is not about what you did in the past; it’s about what kind of new innovation and technology you can bring to the future. That is true differentiation. You are not going to differentiate your business by simply repackaging what you did yesterday. I believe companies that are not aggressively investing [their own resources] in R&D eventually will have trouble surviving.

What lessons, if any, do you think A&D companies could glean from businesses in other industry sectors?

There are lessons in the automotive sector. Their ability to capture the imagination of customers is what drives their success or failure. The difference, of course, is that they market and sell products produced in vast quantities, and A&D is just the opposite.

What is the missing ingredient that generally characterizes under-performing companies in Aerospace & Defense?

I’ll answer the reverse: top performing companies usually have a focus on the future and focus their investment in new areas of technology. This process—letting go of previous-generation products and creating the next generation—is essential to remaining relevant and ensuring your long term future.

We use Product Lifecycle Management (PLM) software to help our customers feel more at ease outside their comfort zones. We just invested several billion dollars to create what we call the 3DEXPERIENCE platform, which is the next generation PLM software aimed at optimizing product creation. We believe it represents the state of the art, and we are now deploying it to customers in multiple industries, including A&D.


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Our goal is to help our customers to be as efficient as possible in creating new products and getting as much mileage out of their R&D investment as possible.

Michel Tellier VP Aerospace & Defense, Dassault Systèmes