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CIO interview: Paul Stein, CTO, Rolls-Royce

The aerospace engine manufacturer is at the leading edge of technology developments such as electric power, and already makes extensive use of advanced IT systems such as AI

You may not be able to afford a Rolls-Royce car, but you have almost certainly flown on a Rolls-Royce powered aeroplane. These days, the luxury vehicles are made by a different company, owned by BMW, but the British engineering company that retains the name is the world’s second largest manufacturer of aircraft engines, and its products are found on Boeing and Airbus commercial airliners as well as military planes.

Heading up Rolls-Royce’s IT department is chief technology officer (CTO) Paul Stein, who reports to CEO Warren East, and has a big part to play in the company’s overall strategy.

“We spend about £1.4bn every year on R&D and two-thirds of that spend is to improve the environmental performance of our products. We’re a very tech-hungry industry and a very technology-intensive industry. My role is to prioritise where we spend our investments,” he tells Computer Weekly at the Economist Innovation Summit in London.

“We’ve got a range of products which require year-on-year investment in new materials, in understanding of the physics of the products and the digital infrastructure around them, and without a relentless spend in technology, our products would start falling behind,” he adds.

A second key area for investment is in improving the productivity of what Rolls-Royce does – in manufacturing, plus new ways of designing and servicing products – all of which Stein emphasises require very sophisticated technology.

Industry 4.0, which is the digital overlay over manufacturing technology, really does work and we’re very pleased with the results of that in this area,” he says.

The final category of investment that Stein has to consider are new avenues that have been made possible through technological development or through customer demand.

“We spend about £1.4bn every year on R&D. We’re a very tech-hungry industry and a very technology-intensive industry. My role is to prioritise where we spend our investments”

Paul Stein, Rolls-Royce

“For example, for the first time we can use electrification in aviation propulsion, which is absolutely exciting and it’s opening up whole new areas of business for us,” he says.

While the three areas of investment are well defined, it is a hard job for Stein to decide how to split the money between these three sections.

“It’s hard because spotting winners is hard in business and also because we make such incredibly difficult products to make. For instance, in the area of large jet engines, there are only two companies in the world that have the necessary technology and know how to make them – which is ourselves and General Electric,” he says.

It’s for this reason that all three areas of potential investment are separated into different teams.

“We’ve done this quite deliberately, because we want to create some tension among my team. So there’s someone who is responsible for keeping all of our aviation products and jet engines competitive, then someone else who is responsible for manufacturing technology, and someone else for new technology, and I expect them all to make the case for each of their departments,” he says.

Investing in innovation

Rolls-Royce has set up a new business called Rolls-Royce Electrical for electrical aviation – proof that the company is investing heavily in new technologies. Stein emphasises that despite this, electric power isn’t the future of all aviation.

Instead, the use of electrification is impacting much smaller craft, including helicopters. They would use a battery pack that directly powers a number of different pedals, creating a distributed propulsion approach using electrification. As a result, the machine would be cheaper, easier to fly and environmentally friendlier, as well as quieter.

“It’s kind of a no-brainer that the world is going to move towards that sort of technology,” says Stein.

Propeller aircraft carrying 10 to 19 people between cities will also be able to benefit from electrification, but the method is unlikely to have as much of an impact on the commercial passenger planes that people have become accustomed to.

“When you start getting into bigger machines, electrification is only going to impact us in the very long term, maybe in 2040, and even then it won’t be propelling aircraft electrically. Instead, we’re working on designs where electrification is used for improving the aerodynamics of the aircraft,” he says.

“We have to create the conditions under which sustainable aviation forms can grow, because we recognise for the larger aircraft that they’re absolutely necessary to help decarbonise aviation.”

Specialised skills gaps

While most CTOs may be concerned about skills gaps in cyber security, data science or artificial intelligence (AI), the technical requirements at Rolls-Royce mean that Stein is faced with dilemmas in other areas.

For instance, the engineering company has been working with the UK government on the design of a breakthrough type of nuclear power called small modular reactors, which can drive down the cost of electricity generated by nuclear power.

“It’s the key enabler to making sure nuclear power can help decarbonise, and the nuclear skills that are required to design and take these systems through the regulatory process to ensure nuclear power is safe, are in short supply,” says Stein.

“We’re developing our own people and bringing in new talent. [For] digital skills we’re increasingly working with startup companies”
Paul Stein, Rolls-Royce

Electrification is another area where there is a skills deficit, as Stein states that the whole transportation sector is moving towards electrification – with electric cars, buses and trains all in development. In addition, the company takes a long time to train people to the required level to be able to contribute to the design of critical components within a jet engine – meaning there are always fewer specialists on-hand to work on projects than required.

“We’re having to put a lot of effort into developing our own people and bringing in new talent. Then, there’s digital skills, where we’re increasingly working with startup companies,” he says.

This means bringing people in from startups on an ad-hoc basis to work on projects for Rolls-Royce, as well as working with them digitally.

“We can put data on the cloud and let small companies access data on the cloud so that they can apply their magic to the data we’ve made available. They don’t necessarily have to physically come in,” he says.

Industry 4.0

Much like digital transformation, Stein sees Industry 4.0 as a journey rather than a point in time.

“It’s the gradual digitisation of your own factory, the introduction of digital manufacturing methods like additive 3D printing, and then eventually rolling out a digital enterprise between high-tier manufacturing and the supply chain services,” he says.

“There’s a vision of Industry 4.0, where it’s an entirely digitised manufacturing estate, where the 20% by value of things that we make ourselves are entirely through digitised processes and the supply chain is responding to the same digital requirements as are our own factories.”

However, Stein emphasises that Rolls-Royce is a long way from getting there. The standards communities are still making ground, as are the big manufacturing systems providers such as Siemens.

“It would be wrong for us to say we’ve implemented Industry 4.0 across the factory. Instead, what we’ve done is taken a few pilot factories and have entirely digitally enabled them, and we’re pleased with what we’ve done,” he says.

“We’re now monitoring performance, and typically we’ve started seeing improving yield, decreasing cost, the ability to switch between different products very quickly, the ability to get visualisation of what’s happening in the manufacturing centres remotely from head office, and the application of data analytics to everything that’s going on to get key performance indices. It’s all working and the vision is coming true, but it’s not an overnight thing.”

AI and machine learning

Stein says artificial intelligence is ubiquitous, applicable across everything the business does. He says there are some areas where he cannot go into detail, such as the competitive edge that AI is giving the company.

“It’s not just technology – the application of AI in commercial processes is becoming quite a breakthrough. Using AI to manage the commercial and financial interface with our suppliers is having a surprising effect,” he says.

“When you can be precise about the question, AI will – most of the time – come up with the right answer”
Paul Stein, Rolls-Royce

In addition, there are interesting uses of AI in design.

“In design, we have hugely complex computer simulations of our products which use large clusters of computers and take long amounts of computing time to run, and having an AI engine which makes decisions about what set of parameters to run next is a very exciting way of letting a computer control a computer and come up with the optimal design for something – and that’s very exciting,” he says.

AI is also being used in the company’s Industry 4.0 initiative, to help analyse Rolls-Royce’s manufacturing processes, and AI is also used in service, monitoring jet engines as they fly to decide when the next service intervention is due, for instance.

Stein says the mistake with AI is to sprinkle it all over the place and hope that it creates magic.

“We earn our money with the use of AI when we can be precise about what the question is. When you can be precise about the question, AI will – most of the time – come up with the right answer,” he says.

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