Naveen Poonian is the President and CEO of iBase-t, a global leader in digital manufacturing, quality and sustainment software for A&D.
Twelve years. That’s how long it would take Airbus and Boeing to work through their current commercial aircraft backlogs at today’s production rates. Airbus had nearly 9,000 commercial aircraft on order as of January 2026, while Boeing had more than 6,000 as of July 2026. Those numbers represent extraordinary demand, but they also reveal a growing problem: A&D manufacturers can’t increase production fast enough to keep pace.
Defense manufacturers face the same challenge, only with even greater urgency. Lockheed Martin alone carries a backlog exceeding $230 billion, while General Dynamics and BAE Systems have also reported unprecedented demand. Governments are pushing defense manufacturers to replenish inventories, modernize capabilities and accelerate deliveries. Across commercial aviation and defense, customers are asking whether manufacturers can deliver what they’ve already sold and deliver it faster.
Turning demand into capacity is the new A&D challenge.
The industry doesn’t have a demand problem. It has a production-capacity problem.
Surging global passenger demand, airline expansion in high-growth regions such as Asia and Africa and fleet-replacement programs continue to drive commercial aircraft orders. Defense manufacturers face a similar surge as governments respond to geopolitical risks, increase defense spending, modernize military capabilities, rearm across Europe and expand procurement in Asia. These forces reflect structural changes in the global A&D market.
That puts manufacturers in a difficult position. They need to increase output while maintaining the quality, traceability and regulatory compliance that A&D production demands. They also need to manage persistent labor shortages, supply chain constraints, increasingly complex products and pressure to protect margins. Simply adding another shift or hiring more workers won’t solve all of these challenges. Manufacturers need to find ways to get more productive capacity from the operations they already have.
That changes the conversation. Instead of asking how to build more factories or add more people, A&D leaders should ask: How much additional capacity can we unlock from the factories we already operate? The answer may be sitting in plain sight.
The shop floor is the untapped opportunity.
For years, A&D companies have invested heavily in digital transformation across finance, engineering, R&D, product development and enterprise planning. These investments have created significant value and improved decision making across the enterprise, but digital transformation hasn’t reached the shop floor with the same intensity. The shop floor ultimately determines whether an aircraft, engine, weapon system or other complex A&D product gets delivered on time.
As a rule of thumb in the A&D industry, the shop floor accounts for 80% of program cost and production time. Those other departments only represent 20%. To increase throughput, you have to bring digital execution to the shop floor, where complex A&D products are built. That’s where the most significant opportunity is to drive efficiencies that accelerate production.
A 2021 McKinsey report in partnership with the Aerospace Industries Association found that only 15% to 20% of surveyed A&D companies (registration required) were using digital and analytics to improve manufacturing maintenance, automation, performance management, quality and throughput. The research also found that A&D companies were more digitally advanced in R&D than in manufacturing and supply chain even though manufacturing and supply chain represented 44% of the sector’s digital value-creation potential.
One reason why the shop floor has been overlooked is because the enterprise software industry has focused most heavily on developing digital transformation solutions for corporate functions that are very similar from one company to the next. Think finance, product development, HR, enterprise planning and IT management.
In contrast, the operational side of businesses (including the manufacturing shop floor) are unique to each company. They’re also more fragmented, with more tribal knowledge. Transformation of the shop floor requires more than just an IT solution. It also requires transformation of processes and people—typically a more complex undertaking.
The urgency of reducing the massive aerospace and defense backlog, as well as the need to maintain aircraft longer, requires organizations to make shop floor transformation a priority now.
Move digital transformation to the point of execution.
Digital transformation can’t stop at the executive dashboard, engineering environment or enterprise planning system. It must reach the point where people actually perform the work, giving manufacturing teams timely, actionable information to anticipate issues, remove constraints and increase throughput.
Bringing digital execution to the shop floor requires the right technology foundation, including data collection tools, Internet of Things (IoT) sensors and purpose-built manufacturing execution system (MES) software that bridges enterprise resource planning (ERP) systems and factory operations. Increasingly, this technology foundation also includes AI-driven applications that drive insights and automation, further accelerating production.
The future will be decided where the work happens.
A&D manufacturers that leverage these technologies to improve production execution can measurably increase throughput and shorten customers’ wait times. Those factors still matter, but as demand continues to outpace production capacity, another capability will increasingly separate industry leaders from laggards—the ability to execute more production with the same resources.
The shop floor is where that advantage becomes real. This is where teams build the products, where schedules succeed or fail, where quality gets established, where margins can disappear and where customer commitments ultimately become either deliveries or delays.
A&D manufacturers that bring digital execution to this critical point can turn the shop floor from a production constraint into a competitive advantage. The industry has already won the demand. Now, it needs to win the execution.
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