Today’s global backlog of unfilled aircraft orders has reached over 17,000 jets—the highest ever recorded. Similarly, missile systems and shipbuilding manufacturers are also facing backlogs near all-time highs. Demand has far outpaced the industry’s current production capacity, and new orders are being placed faster than old ones are being delivered. While a full slate of orders signals market confidence, the inability to deliver on time and convert those orders into revenue creates substantial financial and reputational risks. And with competitors rapidly adopting new methods and technologies to accelerate production, organizations that rely on legacy systems and processes are operating at a distinct disadvantage.
Backlogs: Signal of demand or symptom of delay?
Backlogs—while daunting—are not inherently problems for organizations; they are indicators of strong market demand. However, their value is only realized when orders are fulfilled and converted into revenue. The challenge lies in execution. When supply chain disruptions, workforce shortages, and disconnected legacy systems mean typical timelines can stretch for years, a backlog of hundreds of orders represents immense potential revenue locked away—negatively impacting cash flow and hindering further innovation.
If organizations can shorten that fulfillment cycle and increase production rates, they not only generate revenue faster, but also create the capacity to accept more orders and deliver more products.
The true cost of inaction
Delaying the modernization of production processes is not a cost-saving measure. It is an active choice that carries a steep price, impacting organizations from the balance sheet to the factory floor. The consequences of inaction extend far beyond simple production delays—in fact, challenges such as poor quality, a lack of agility, and lower margins are so far-reaching that their downstream impacts can be felt for decades to come.
Quality issues
Persistent backlogs and missed deadlines don’t just impact the bottom line—they erode trust. In an industry where reliability and precision are paramount, delays and quality issues can quickly tarnish an organization’s reputation. Over time, this reputational damage can make it harder to manage increasing product complexity, ramp up production, and ultimately win new business. In a competitive landscape, reputation is as valuable as revenue—and just as vulnerable to the consequences of inaction.
Backlogs prevent revenue realization
The most direct impact of inaction is financial. A backlog represents committed future revenue, but until an aircraft or defense system is delivered, that revenue is theoretical. In a capital-intensive industry like aerospace and defense (A&D), slow cash flow can stifle innovation, limit strategic investments, and weaken financial positioning. Efficiently converting backlogs into revenue is fundamental to sustaining healthy operating margins and satisfying shareholder expectations.
Lost contracts and cancelled orders
When backlogs grow and fulfillment timelines slip, organizations risk more than delayed revenue—they risk losing business altogether. In A&D, contracts often include strict delivery schedules and performance milestones. Failure to meet these commitments can trigger penalties, contract renegotiations, or outright cancellations. Customers, especially government agencies and large commercial buyers, may turn to competitors who demonstrate greater reliability and agility. Each cancelled order not only represents lost revenue but also diminishes future opportunities, as buyers seek partners who can deliver on time and at scale.
New methods for accelerating production
To navigate this complex environment, A&D manufacturers must embrace enterprise solutions that connect disparate teams and streamline complex processes. The key to accelerating production lies in building a cohesive digital foundation that enhances collaboration, improves data continuity, and enables a more agile approach to manufacturing.
Enabling seamless collaboration and change management
Supply chain disruptions, workforce shortages, and disconnects between engineering and manufacturing teams are often cited as the most significant barriers to production speed. A robust, open product lifecycle management (PLM) system breaks down these silos by providing users across the enterprise with a single, authoritative source of truth for all product data. It enables seamless collaboration by allowing teams to work concurrently rather than sequentially—meaning engineering changes can be managed efficiently, production and supplier issues can be resolved faster, and the entire development process becomes more synchronized.
Designing for manufacturability
The foundation of efficient production starts in the design phase. Core technologies like CAD and PLM are essential for enabling a "design for manufacturability" approach. This involves integrating manufacturing considerations early in the design process to avoid nonconformances and ensure products are designed right the first time. By integrating advanced simulation and modeling tools with PLM, engineers can validate designs for manufacturing readiness, identify potential risks, and reduce the likelihood of costly errors and rework downstream. An essential part of this process is the transformation of engineering bills of materials (eBOMs) into manufacturing bills of materials (mBOMs), which ensures that product definitions are aligned across design and production teams—reducing manual rework, improving collaboration, and streamlining the transition from concept to shop floor. This proactive approach is critical to shortening development cycles and accelerating time to market.
Integrating data across the enterprise for a holistic view
While PLM is a core functionality, it is part of a larger puzzle that includes includes enterprise resource planning (ERP) and manufacturing execution systems (MES). Integrating these enterprise systems is essential for A&D organizations seeking a holistic view of their operations. By connecting engineering, manufacturing, and business processes through a secure digital thread, companies can break down silos, improve data continuity, and enable real-time collaboration across the enterprise. This seamless integration ensures that product data, resource planning, and production status are always aligned, reducing errors and accelerating time to market.
The aerospace and defense industry is moving faster by the day. The risks associated with maintaining the status quo—lost revenue, damaged reputation, and diminished market share—are too high to ignore. By embracing a PLM-centric approach, manufacturers can foster collaboration, enhance data continuity, and modernize production processes to burn down backlogs and meet market demand. PTC’s PLM solutions empower both technical and non-technical users to access critical information, make informed decisions, and respond quickly to market demands—ultimately driving efficiency, quality, and a lasting competitive advantage. The question is no longer if you should transform, but whether your organization can afford to wait any longer.
Your organization can’t afford to wait.
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