KEEP CALM & CARRY ON
Keeping calm and carrying on has certainly been the theme for oil & fuel markets in the U.S. and abroad. As consumers around the globe appreciate lower, fuel prices and ride the tail end of a bull market, it’s hard to tell where the price of crude oil will be in 2020 both globally and domestically.


The U.S. Energy Information Administration (EIA) expects domestic crude production to increase 1 million barrels a day in 2020. Some other independent market consultants feel that may be too bullish considering the steep drop in drilling activity and tight, financial discipline seen in the U.S. oil industry this year. “Many shale producers continue to have a difficult time breaking even under today’s oil prices, and investors have become fed up with capital destruction in the sector. Oil service companies have taken significant steps to improve razor-thin margins, laying off workers, reducing drilling and fracking capacity and of course re-thinking their business models”, says analysts from Forbes. Some drillers and fracking companies have seen their credit lines reduced, limited access to fresh capital and this curtailment in lending is at the expense of shareholders and investors. Twice a year in the spring and fall, banks re-access their credit lines to shale drillers and decide how much they’ll authorize companies to borrow. This will be the first time in almost 3 years that lenders have tighten their preverbal belts. As a result, drillers have been forced to optimize margins, profits and dividends at the expense of capital growth to avoid a complete nose dive in stock prices.


To give some perspective, OPEC crude oil production in 2019 was roughly 29.9 mb/d expected to decrease to 28.9 mb/d in 2020. On the flip, non-OPEC crude oil producers output is expected to grow to  2.3mb/d in 2020, an increase 500K b/d. So, with decreases in OPEC production growth added with stagnant or uncertain U.S. drilling growth and continued sanctions on Iran, Lybia and Venezuala, the new year could bring a slight rise in oil prices, but most likely we’ll see price levels similar to 2019.


The IEA World Energy Outlook 2019 published this week highlights the increasing disparity between calm oil markets of today and heightened geopolitical tensions. The calmness is supported by a well-supplied market with high inventories. (PADD 4 in the Rocky Mountain region has experienced, despite some swings of inventories, a relatively uneventful market due to declining demand.) Given the cyclical nature of refining, oil producers have oversupplied the market in past years and decisions at the recent OPEC meetings in December 2019 are to cut production and clear the product globally. The U.S. will again lead the way in supply growth in the new year along with Brazil, Norway and barrels from new producer, Guyana.  However, oil demand globally is still relatively unchanged @ 1-1.2 mb/d and the health of the global economy remains a bit uncertain given the US-China trade dispute.


A ramp up in refinery activity sets the stage for smooth IMO 2020 implementation of new bunker regulations in January 2020. Port, ship owners and refiners and hubs in Rotterdam, Fujairah, and Singapore have stepped up their preparations. (In the case of Singapore, one of the top 2 Ultra Large Crude Carriers in the world is being used to store low sulphur fuel oil and marine gasoil offshore.) As a result of these implementations, some negative consequences may occur: the cost of high sulphur fuels will likely plummet and compliant suppliers may not be available in sufficient quantities in smaller ports and for smaller ships certainly creating dislocations and lack of needed supply driving prices up.


Continued production and now an oversupply since 2018 has led to abundant inventories and the forward, price futures’ curve into contango (where price futures are higher than the spot price, although signifying a rise over time). As demand expectations and sector sentiment grow and OPEC+ maintains discipline over production levels, we may see market fundamentals resulting in average prices in the US60-70/bbl range until 2020. After 2020, prices are estimated to remain closer to USD60/bbl driven by increasing and sluggish demand and the continued growth of shale oil in North America as operators lean toward shorter-lead, higher margin projects. (Unfortunately, credit markets won’t allow producers to go all in on capital investments or longer-term projects due to lending scrutiny) In the scenario where the global economy slows down even more, prices could continue to fall if OPEC chooses not to intervene and make the cuts necessary to keep prices higher. On the contrary, prices could balloon and reach USD80-90/bbl with supply disruptions from a shipping industry that may not be fully prepared for their low sulphur fuel transition. Additionally, drops in production from Iran and Venezuela and OPEC’s spare capacity tightening could send prices higher as well.


Again, the theme still suggests all of us to remain calm and carry on. Despite the US/China trade war, the readiness of the global shipping industry, and decreasing global growth, we’re still unsure how this affects our business at home. The Rocky Mountain region is subject to terminal functionalities and capabilities, supply accessibility in the region, competitive suppliers in the market and a host of other factors (like weather) that will affect your fuel in 2020. The western U.S. still continues to see growth in the Front Range of Denver, Salt Lake and other smaller markets like Boise, Idaho. With that growth comes demand for goods, services, and homes which drives construction and infrastructure improvements. Transportation companies and construction contractors will experience a growth in demand for all sorts of fuel and petrochemicals to run and maintain fleets and equipment across the region as this trend continues across the region.
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World Kinect Energy Services continues to be at the forefront of fuel management, supply and delivery services across the region and U.S. No matter what the market conditions, we continue to have advantageous supply positions, will provide the best prices and exemplary services helping customers benefit from a prosperous New Year.

As I travel around and speak to many customers who operate heavy equipment and Class 8 vehicles, my goal is to determine how much fuel they burn annually and provide the best price and service based on those estimates. 

I'm always curious on how much fuel is burned or consumed on an annual basis by all sorts of contractors and transportation companies. This information is obviously helpful in my work, however it brings me back to the cockpit of an airplane or helicopter where fuel burn is a crucial element in flight. Burn rates are critical in calculating flight performance and range. So, I wanted to find out how much these industrial machines burn and what contributes to the amount of fuel, operating under various conditions, these Class 8 vehicles actually consume. 

The two factors affecting the average annual fuel use of a vehicle are the average miles per year and the fuel economy of the vehicle. Transit buses or Refuse trucks for instance are relatively inefficient due to their stop-and-go drive cycles and heavy loads, consume more fuel on average than any other vehicle type. Class 8 trucks, which typically travel long distances carrying heavy loads use less fuel, naturally. And, lastly, To give it some perspective, the vehicles you and I use  use a fraction of the fuel used by fleet-based vehicles, on a per-vehicle basis. However, many additional factors like type of use, wear and tear and other humanely-induced usage can affect the vehicles burn rate. 

Similar to aircraft traveling through the air, trucks also travel through the air (relatively speaking)  with additional force acting upon it. The main force that affects fuel economy with larger, Class 8 vehicles is drag. (And let me tell you, it's a drag). In some studies, research has shown that Class 8 vehicles can burn up to 13,000 gallons per year. Not to mention the cost the business' investment in fuel annually, but emissions and environmental regulations, operators have now started to seriously consider how to manage these costs and run cleaner.

With the onset of fleet technologies and tractor-trailer "sculpting", operators are finding creative ways to eliminate drag as did the aircraft industry. Forces on the tractor trailer moving down the road are again similar to the (4) forces of flight (lift, thrust, drag and gravity) experienced in an aircraft. You can see from the picture below that there are a number of trouble spots that add to the drag and inefficiency of the vehicle.

Nothing has transformed the ability of on-highway Class 8 tractors to get better fuel economy more than the use of aerodynamics to sculpt and guide the flow of air around the truck and trailer in order to cut through the air more efficiently. But because airflow is invisible, aerodynamics can be frustrating for many fleet managers.

A full suite of aerodynamic devices have been adopted on vehicles including FlowBelow’s undercarriage system, wheel covers, Fleet Engineers AeroSaver Classic side skirts that cover the landing gear, Stemco TrailerTail, a nose cone, Fleet Engineers AeroFlap mudflaps, and cross-member shields. Some operators also are finding solutions of their own from taking a power saw to a set of mud flaps sticking too far into the slipstream around the truck. Some truck features include relocated and recessed license plate, or even rain gutters that are plated over to smooth out airflow. Other trucks and trailers with application-specific aerodynamics, including aerodynamic skirts on regional haul trailers reduce wind drag under the rear tandems of the trailer. Concept trucks like the Super-Walmart transport vehicle below are those designs that will re-invent manufacturing process to eliminate drag and provide a great deal of fuel efficiency for transport vehicles. 

World Fuel Services provides direct delivery & tankwagon fuel deliveries to remote construction sites as well as Fleet Fueling services that saves $$ at the pump and most importantly time for drivers to fuel up!

​Crude oil prices today remain subdued, continuing to recede for the second day following their sustained upward streak. WTI (West Texas Intermediate) crude forward prices opened at $50.78/b today, down by $0.95 (1.84%) from yesterday’s opening price of $51.73/b. Last week, crude oil reclaimed highs of $52-$53/b, but prices began to subside on Friday. Gasoline and diesel forward prices also opened with losses today. Crude and product prices are trading up and down today, awaiting guidance. Markets are mixed, with the U.S. government shutdown muddying the market outlook.

The U.S. federal government is in day 25 of shutdown, and U.S. President Donald Trump says he will not sign any measures for stopgap funding unless they include funds for his border wall. Historically, a short shutdown can have implications that are relatively minor. But a long shutdown gets exponentially worse, causing social, economic and environmental problems that grow increasingly severe. Delta Airlines, for example, reports that the shutdown will cost it $25 million this month, and that spotty security allowed a passenger to get through security with a gun. National parks are overflowing with garbage and human waste, and vandals have even killed some iconic Joshua trees in the Joshua Tree National Park.
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The overall picture is of a U.S. so badly led that global markets are looking elsewhere for positive signals today. China, for example, is responding quickly to a major slowdown in its imports and exports. The Chinese government pledged to keep monetary policy flexible and to improve access to financing for businesses. Economic advisors believe that Chinese tax cuts will stimulate GDP growth. Chinese company shares rose on the announcement, and also on hopes that the Chinese leadership will work harder to resolve trade disputes with the U.S. later this month. Markets also await news from the American Petroleum Institute on U.S. oil stockpiles, which are expected to show a drawdown from crude inventories and a build in product inventories.

Oil prices remain strong today, though the upward momentum has slowed. WTI (West Texas Intermediate) crude forward prices opened at $48.30/b today, an increase of $1.40 (2.99%) from Friday’s opening price of $46.90/b. Gasoline and diesel forward prices also opened higher today. All are working to hold their gains this morning. Market optimism is strong today, with renewed talks between the U.S. and China on the trade war. The first day of negotiation looks promising, with the surprise appearance of Chinese Vice Premier Liu He heading what was expected to be a lower-ranking delegation.

Global stock markets are shaken today by news that Apple cut its forecast of revenues, citing poor demand in China. This is seen as evidence that the U.S.-China trade war and slowing growth in China’s economy is having a larger-than-expected impact on Apple’s corporate profits. It is the first time in 15 years that Apple has cut its quarterly revenue forecast. Apple stock is a member of all three major Wall Street indices. This news is expected to diminish the recent recovery in equities and increase safe-haven investments. It may also stall today’s rally in oil prices. As of the time of this writing, the Dow Jones Industrial Average has just opened down by 320 points.

Pricing across the global energy markets will face headwinds in 2019, with a weaker and more uncertain macroeconomic framework deflating price formation in general, according to two special reports just issued by S&P Global Platts Analytics. Such headwinds will require the industry and portfolio managers to take a big-picture approach.
Particularly blustery head winds are in store for markets where prices finished 2018 at elevated levels, and well above costs, such as North American natural gas and global coal. However, if the supply side can adjust to the reality of slowing demand growth, energy prices can find support. For natural gas liquids (NGLs), the ongoing logistical constraints at the US Gulf Coast are likely to manifest on continued price volatility, particularly for ethane and liquid petroleum gas (LPG), over the next year despite strong global demand.

Access the full S&P Global Platts Analytics Top Factors to Look Out For in 2019 for Energy here.
Among the 22 key take-away themes:

• NGL supply growth will strain the North American energy system
• Saudi Arabia will need to be nimble to balance 2019 oil supply
• US oil supply limited by pipelines
• Oil demand slowing: trade war, industrial slump
• 2019 LNG supply additions largest since the Qatari mega-trains
• US gas supply growth to exceed demand growth even with LNG exports
• Shipping disruption looming – IMO 2020
• New Russian gas pipeline advantage over Ukraine
• US coal demand to decline again in 2019
• Growth in new refineries and complex capacity likely to weigh on refinery margins especially in Asia

Information gathered with help from Fuel Market Reports and S&P Global Platts Analytics

WTI closed higher today in spite of another large week of builds as market focused on the draw down in refined product stocks with refineries increasing output and imports falling for products. Oil complex was not in tandem with stocks today when it has been for some time, so that is an interesting move we will watch to see if pattern persists. Geopolitical fairly unchanged, economic news was mostly bullish, and weather seems to be leaning towards a colder than normal winter for much of the nation.

Refinery utilizations were up 0.4% at 89.2% this week. Imports were up for crude, but down for gasoline and distillates. Apparent demand for gasoline fell this week, while distillate demand rose.

Key Price Drivers
GEOPOLITICAL – Saudi Crown Prince has vowed to bring justice to Khashoggi’s killers after a phone call with Turkish President Erdogan. EU leaders say they are willing to extend the transition period for Brexit to allow for a smoother exit of the UK from the bloc. Communal clashes in Nigeria have forced officials to impose a 24-hour curfew hoping to gain control of the situation. Afghanistan parliamentary elections were extended one day (Sunday) to allow voters sufficient time to cast votes due to security threats and logistical issues. Other regions of the country will be voting later, but signs are promising that vast majority are willing to stand up for democracy.
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ECONOMIC – Fed remains committed to pulling back on stimulus and increasing interest rates slowly to prevent an overheated economy. Jobless rate remains around 3.7 percent which is considerably below what is considered full employment. Market still anticipates another rate increase in December with three more in 2019 and possibly two in 2020. Consumer sentiment supports a growing economy and major retail CEO’s are seeing that reflected in their business. New home sales have fallen in September blamed on higher interest rates and possible lower inventory particularly in Southeast due to hurricane impact.
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For more information, contact - Gates L. Scott - gascott@wfscorp.com - 303.358.2977

World Fuel Services provides an advanced, diesel-fuel additive and tank cleaning program for those long, winter months. Water has always been a problem in diesel fuel. But today’s cleaner-burning fuels have dramatically reduced sulfur content and are more prone to water separation, contamination and are inherently unstable. A proper fuel-polishing formula along with cold flow technologies will keep your fleet moving in sub-zero temperatures by removing water and slime, dispersing fuel contaminants and stabilizing fuel during winter storage. So, if you’ve neglected cleaning or maintaining your fuel tanks, now’s the time to call!

Benefits from WFS’ Tank Cleaning & Additive Program:
-Reduces Maintenance and Filter Costs for Heavy Equipment
-Protects Against Tank Corrosion
-Disperses Diesel Fuel Contaminants
-Effective with Ultra Low Sulfur, Biodiesels and Blends
 
Visual Fuel Analysis: World Fuel and its suppliers can collect and analyze fuel samples from tank to determine water and particulate content prior to and after the cleaning process. Process will be considered complete when particulates are less than five microns.
 
• Fuel Polishing and Tank Sweeping: World Fuel and its suppliers will cycle fuel from each tank through our self-contained step-down filtration unit until the fuel meet ASTM 975 and ISO standards. This process is done utilizing a high-volume return of fuel to agitate the tank bottom debris and water to suspend and be filtered out of tank. Restoring a cleaner fuel and tank to meet standards.
 
• Disposal: water and solids from the fuel and tank polishing process will be containerize and properly disposed of.
 
• Insurance & Certification: World Fuel and its suppliers have all appropriate environmental coverage and liability coverage to meet all needs. All cleaning and polishing techs are fully trained and certified.
 
TO RECEIVE INFORMATION ON ADDITIVE & CLEANING PLEASE CONTACT:
GATES L. SCOTT (303) 358.2977 or gascott@wfscorp.co

The much larger than anticipated draw in US crude stocks (although a large portion of this was on the West Coast) helped ease concerns of oversupply for now and allowed crude to close higher on the day. Week on week values still have WTI futures falling, however, the rest of the energy complex continues to rise. Unrest in the Middle East will continue to keep a floor on prices as the fear premium remains for now. Global economic growth and potential impacts from ongoing US trade disputes with a number of nations could become a factor for the energy sector. Tropical weather has not been a factor thus far this hurricane season, but it is still early yet not too late to enter hedges if you need to cover that potential risk.

​Key Price Drivers
 
GEOPOLITICAL –. Ceasefire was restored in Gaza on Friday following a violent exchange along the fence that separates Israel and Gaza that killed an Israeli soldier during protests. Yesterday, Israeli military shot down a Syrian fighter jet after it entered Israel’s airspace. Syria’s story differs and reports the jet was conducting an anti-terrorist operation. ISIS is claiming responsibility for deaths of 166 in Syria from targeted suicide bombings in Suwayada. ISIS is also taking responsibility for suicide bombing in Afghanistan that targeted the exiled Afghan vice president who was returning from Turkey. Another suicide bombing at a mosque in Nigeria occurred on Monday and Boko Haram is suspected.
 
ECONOMIC – US GDP report will be out on Friday. New home sales dropped to lowest level since October 2017. Treasury yields fell after home sales data was released. Market still following trade disputes with a number of nations and what those actions might have on the overall economy. Some attribute recent US growth to companies taking action ahead of tariff changes. Some analysts are seeing signs of a recession and want to see Fed focus on keeping inflation in check. President Trump’s pressure on Fed to review rate increase plans has met with mixed results in market. Some support his comments; others say Fed should stay the course.

As the “Industrial Internet” and The Internet of Things (IOT) go beyond the buzz-words of the board room, aerospace manufacturers and industrial leaders have started to implement some of the latest technology to make their manufacturing processes more efficient with reduced errors, deliver products to market more rapidly and finally leverage big data within their own organization. Augmented Reality (AR) and Virtual Reality (VR) are both mediums at which the industries are looking at to make work instructions easier and training more adaptive; these applications can provide “green” talent with contemporary tools and improve the production process. Augmented and Virtual Reality experiences have been created for the entertainment and gaming industries and for various marketing and brand awareness campaigns, nonetheless they still a way to go to influence the aerospace community.  

So, with early adoption and various use cases testing the productivity gains within the enterprise, how has Augmented Reality impacted the aerospace shop floor, and what technologies are necessary for its adoption to accelerate?

Industry giants like Lockheed Martin, Boeing and Applied Materials have invested in the development of both AR hardware and software solutions and have side projects and secretive labs dabbling with head-mounted wearables, light projections, telepresence or remote assist and SDKs to improve costs, time of task and error reductions on the shop-floor. The good news is that AR hardware and software are improving at a tremendous rate with the help of these use cases and investments. The capability of smart-glasses, smartphones and tablets are making astonishing strides in computational, graphical and sensory power with clearer, higher resolution displays and improvements to battery life enabling easier ways to consume and create AR and VR content. Some limiting factors that developers are dealing with is the amount of available memory and battery power on portable devices. Network latency also requires careful consideration when system architecture dictates whether this content should be stored on the device or a remote content server.

The future of Augmented Reality (AR) in the Enterprise however is a bit clearer today as the result of the recent DMDII/AREA Requirements Workshop in Chicago. At first glance, the two-day event promised to be a worthwhile exchange among parties with shared interests. On one side was the Digital Manufacturing and Design Innovation Institute (DMDII), which had invested considerable time and effort into creating a detailed set of requirements for enterprise AR with the assistance of American industry heavyweights Lockheed Martin, Procter & Gamble, and Caterpillar. On the other side was the AREA, the organization leading global efforts to drive adoption of AR in the enterprise. The AREA is to take over responsibility for the requirements document and its future.
But when the parties gathered in Chicago in the beginning of March, the event proved to be more significant than anyone could have expected. Here’s why:

• It demonstrated the burgeoning interest in enterprise AR throughout the developing ecosystem. The event attracted 90 attendees from 45 companies – all deeply committed to AR and eager to share their thoughts with one another.
• It provided an unprecedented opportunity for AR hardware and software providers to engage directly with enterprise AR users. With the detailed requirements to refer to, participants were able to engage with each other substantively and specifically.
• It signified the beginning of a global effort to make the process of implementing AR projects simpler and more orderly. With a set of requirements that will grow, become more defined and use case-specific over time under the aegis of the AREA, enterprises will have the power to define their AR solution needs clearly and confidently. Our goal at the AREA is to make the requirements accessible and usable to the wider AR ecosystem.
• It gives AR solutions providers a vital resource for developing their product development roadmaps. The direct feedback of the user community made it clear to hardware and software providers where they need to invest their R&D budgets in the near and medium term.
• It created the basis for a more open, vibrant, and participatory AR ecosystem. As the AREA makes the requirements a “living document” to which all organizations can contribute, they will become an increasingly useful resource to a wider range of organizations and will accelerate the adoption of successful AR projects in the enterprise.
• Many aerospace component manufacturers will soon be mandated to adopt XML and S1000D publishing standards for all of their various component or airframe maintenance manuals in order to not only comply with airframer requirements but to exploit the re-usability properties of the markup language for content re-use. Aircraft maintenance technicians must obtain new levels of job skill and knowledge to effectively work with modern computer-based avionics and advanced composite materials. Traditional methods of training, such as on-the-job training, may not have potential to fulfill the training requirements to meet the future needs of aviation maintenance. With a standardized, XML-based (or ARML 2.0), now aircraft maintenance technicians are getting even closer to an augmented training environment. An AR system coupled with the reusable properties of XML could enable job task training and job task guidance for the novice technician in a real world environment. It could reduce the cost of training and retraining of aircraft maintenance technicians by contemplating human information processing and assisting with performance of job tasks. Considering that these “live” industry standards and requirements for Augmented Reality content creation (software / hardware) have commenced in the space, enterprise now has a framework in which to govern these new tools, their usage and a way to work in parallel with their specific, industry compliance and regulatory structure. Organizations like AREA (Augmented Reality Enterprise Alliance) are working with industry leaders and executives to formalize and standardize the AR implementation process. Content creation, privacy, protection of intellectual property and industry applicability are all items at the top of the list for groups like AREA and their enterprise counterparts to consider when trying to create a baseline of governance to AR creation and usage.
• In order to deploy new technologies, all industry needs to build strong business cases to get upper management to approve budgets and prove that these new tools will provide a significant return on investment, improve the manufacturing process, and improve safety on the shop floor. Aerospace manufacturers need to keep their technicians on-task and keep them “ship-side”. As soon as the technician has to leave his or her work space to retrieve a part or refer to a colleague for advice or assistance, productivity is lost. AR tools can significantly reduce the time to complete tasks and can provide remote assistance that keep the technician in his or her workspace longer and promotes better efficiency. However, there are still parts of the puzzle like tracking and visualization that need some more development and only with properly initiated use cases will aerospace enterprise be able to reap the benefits of this emerging technology.
   
   
  

Today, leading organizations around the globe are making major commitments to the process of business transformation. The goal of the reshaping effort is to minimize risk, and achieve greater efficiency, profitability and agility – all vital ingredients for original equipment manufacturers (OEM) in a number of verticals.  Engineering Services Outsourcing (ESO) is an end-to-end solution and a strong business case can be built to an outsourcing partner with the expertise, experience, technology and customer focus to deliver benchmark capabilities based on industry’s best practices. Major aspects have channelized a new trend in ESO; the sheer diversity of engineering services, the outlook that most outsourcing will turn toward an engineering Knowledge Process Outsourcing (KPO) offering and the pressing need for cost control in yet to be stabilized global markets that are still running on budget austerity efforts.

Many of the largest OEMs in North America and Western Europe have considered ESO as an extension of their engineering organization. According to data collected in 2014, India-based providers have accounted for nearly a quarter of the overall engineering services market, which is worth approximately $80 billion a year. The Indian ESO industry has been made up of Global Engineering Centers (GECs) and engineering services providers (ESPs). Half of the top research and development (R&D) spenders operate in India through these GECs.

Recent advances in sensor technology, wireless communications, distributed computing and big-data capabilities are enabling the Internet of Things (IoT) to rapidly transform the technology landscape. IT and embedded electronics are permeating the product and service engineering process, and consumers’ expectations and requirements are increasing just as rapidly. Organizations in all industries must now deal with a profusion of data and devices. This new challenge is creating unique opportunities for ESO providers to create intelligent engineering applications to customize and monitor the entire product experience; ideas like the connected car, real-time and continuous healthcare and remote monitoring of smart homes.

Engineering and designers are creating products that capture their own usage data and establish a continuous feedback loop. This way they can make their products more intelligent, and OEMs can increasingly deliver their products as-a-service and use software applications to define the customer experience and product evolution. Companies typically outsource their engineering and design when they have sporadic engineering needs, need to load balance the work and may have trouble getting to those important projects. Manufacturers reasons to outsource are: (1) They can’t justify having their own engineering team for every design project, (2) they have an internal team with capability and capacity but need to manage spiking demand or they require specialized expertise.

ESO will be characterized by the “integration of manufacturing” as a required field of expertise. As the industrial internet becomes more secure, industrial automation, robotics and 3D printing will enable a new dynamic and a new knowledge and talent base. As an example with GE Aviation and Honeywell, the resource landscape is changing. Half of their workforce consists of Chemical / Electronic / Mechanical engineers, the other half are software engineers. This integration requires a newly defined skill set and expertise consistent to with the digital approach to manufacturing.   
A wave of engineering services should present itself in two phases in the coming years:

1. The evolution of the “digital-shop floor” will integrate previously siloed information across an enterprise with systems like Enterprise Resource Planning (ERP), Product Lifecycle Management (PLM), and Manufacturing Execution Systems (MES) resulting in increased productivity, optimized operational costs, enhance asset uptime utility and improved safety.
   
   
2. The design-to-print concepts of additive and 3D manufacturing will impact product maintenance and repair requirements. Imagine a washing machine or a predictive maintenance system that provides 24/7 monitoring of the production of expensive infrastructure equipment that can trigger the printing of a spare part at a local provider in a fraction of the time and cost.
   

To realize the full potential of these growth opportunities over the next five years, the ESO delivery model must change. GECs that are entirely focused on engineering products must address the challenges of IT-enabled engineering by broadening their scope and enhancing their investments in new processes and technology. They must also leverage the higher level of experience, exposure and investments of ESO providers in a collaborative model.

Managed, Shared or BPO Services contracts will move away from the traditional engagement models to demand more value and tighter service integration including pricing aligned with client business metrics, stringent service-level agreements and key performance indicators. This way the business model will shift toward greater sharing of risk and reward between the customer and the service provider.

There seems to be a universal agreement in recent years that the worldwide eLearning market will show fast growth in the coming years. The worldwide market for Self-Paced eLearning practices reached $35.6 billion at the end of 2011 and the annual worldwide growth rate was nearly 7.9 % (Ambient Insights 2016) since then. Self-Paced eLearning is education in which learners study at their own pace with no fixed starting date in common with other students enrolled in the program. However, there’s certainly a fixed overall completion timeframe. Therefore, employees whether in front office or on the shop floor, not only do they have the devices to consume training in real time, but it’s accessed at the time of need.  With the proliferation of easy-to-use, easy-to-publish content authoring and learning platforms linked with a number of mobile applications and the fact that everyone has a device (BYOD - Bring Your Own Device) the learner can be engaged quickly and efficiently. With these various tools and a properly deployed eLearning strategy, an organization can:

• Personalize the learning experience – your employees are better able to learn when they have resources that are tailored to their specific needs
• Efficiently author content – your instructional designers and subject-matter experts (SMEs) need to be able to share their knowledge effortlessly and easily
• Be more agile – at the very least your learning content needs to change as the business does, assisting your employee prepare for those new challenges or new skills
• Drive performance – learning content is the fuel for individual performance gains, and thus can lead to a high-performing organization

The aircraft MRO industry is going mobile – or at least, taking steps to implementing tablets and smartphones for maintenance and training application. Most of the mobile usage in commercial aerospace has been centered in the cockpit. However, many MRO (Maintenance and Repair Organizations) managers are taking steps to adding handheld tablets or phones to an aircraft technician’s toolbox. “Selecting the right device depends specific use-cases and user context.” (Sven Heitsch, Head of Strategy and Technology Information Management at Lufthansa Technik, Aviation Week, Sept 2014). The decision to link mobile devices to back office learning management systems or enterprise resource planning software is also on the rise, but organizations are still cautious due to cultural and integrational challenges. Many conditions apply when deploying new mobile enterprise tools. When developing use cases on the shop or manufacturing floor, the device’s screen size and readability could be a consideration; using these devices to view complex, work instructions or learning content may be impractical in certain locations or environments. Nonetheless, as these tools are evaluated, they have shown to accelerate the learning process and increase productivity across the board.
 
No industry is immune to the impact of mobile devices and almost any business can take advantages of their capabilities. Obviously, industries where employees are naturally mobile are more affected by the rise of smartphones and tablets. In particular, we see mobile devices impacting the MRO shop floor keeping aircraft technicians “ship-side” and reducing errors and increasing productivity.  Cloud computing and SaaS applications are increasingly important in these business applications and these devices are considered mission-critical technology in most aerospace use-cases.
Types of E-Learning
There are many types of eLearning tools and are synonymous with web-based training, distance learning and online training, and just about everyone is familiar with these terms. This type of training allows flexibility, access to colleagues and SMEs and an emphasis on learner-centered content. Here are a few commonly used tools:
 

• Cloud-based, Learning Management Systems – access to training resources at a learner’s moment of need, cost reduction of physical training materials and on-site instructors as well as increased employee engagement are just some of the various advantages to a cloud-based, learning management system that can be accessed by a personal device. Authors can effortlessly create skilled-based learning programs and track how they impact the business results.

 

• Big Data in eLearning – There are a variety of benefits that Big Data offer to eLearning implementation, all of which have the power to revolutionize the way we analyze and assess the learning experience. It allows organizations to understand how their learners are digesting information, pinpoint areas to fine tune courses and modules, how social learning is shared, and the power to predict the areas specific learners are struggling or excelling. An organization’s data has left a bread crumb trail and these analytics can help an author deliver better content with more precision and effectiveness.

 

• Responsive Learning Management – Current learning practices are driven by the individuals that use a learning management system, not the actual system itself. An LMS must adapt to a world where mobile devices are the learning tool of choice. As more and more learning courses are utilize  social media, MOOCs (Massive Open Online Courses) and informal learning, an LMS is only as good as the content it helps to deliver and the data that it can provide. So, for users to engage an LMS must fit into the contemporary way they learn and develop skills.

 

• Wearable Tech Transition – In order to train a new workforce, or a millennial employee, you have to introduce tools that are current with their level of technological savvy and experience. Growing up with many technologically-advanced mobile devices and appliances, this future workforce may not be able to depend on the tribal knowledge that came before them.  Not dissimilar to video gaming, wearable tech, virtual and augmented reality tools are developing at a rapid pace. They are currently being utilized on the shop floor at companies like Lockheed Martin, Lufthansa, and Boeing. They are making complex work very simple. The advancement of Smart Glasses and the proliferation of open-source software in Augmented Reality will close the gap between a millennial and a more, seasoned and aging workforce

 

• Automated Course Authoring – Curriculum is becoming more interactive and, at the same time, an increasing number of learners are using mobile devices to access learning courses. Therefore, the way that eLearning is being designed, created and delivered is rapidly changing as well. HTML5 authoring tools are becoming more easy to use and even unskilled authors can publish great content to any device on any platform, in real time. So, you can publish once for a number of BYOD devices with ease.

 

• < > – with the application of game-design elements and game principles in learning today, Gamification improves user engagement, organizational productivity, and makes learning fun. Gamification takes the data-driven techniques that game designers use to engage a younger workforce by employing high-interaction and motivational techniques to increase a learner’s knowledge.< > – Learning on the go. Different learners respond differently to digital learning, based upon how they prefer to learn and the content that is being presented. Therefore, developers should be keenly aware of their audience and learning materials should be designed for specific mediums. Mobile has evolved so much over the years, and it’s no surprise that in 2013, mobile devices became the most commonly-used, web access tool, surpassing the PC for first time (Gartner, 2014). Mobile phones are always “on” and the user can access learning courses 24/7.