Should an aircraft operator still manage its own inventory?
The aircraft spare parts market is getting increasingly competitive. OEM’s are aggressively pursuing availability contracts, becoming important actors on the aircraft teardown and surplus parts market with fierce competition between parts traders. Although availability seems to be increasing, transparency on the other hand is not. As such reliance on parts knowledge and effective spare parts inventory management is still very important. No wonder that operators are carefully looking how to safeguard their inventory management performance, trying to achieve effective parts availability against lower costs.
However, capitalizing on this ambition does not come easy. Effective spare parts management requires specialized knowledge, especially when it comes to rotables and multiple stock locations. Maintaining your rotables stock requires managing the entire repair loop as shown in the picture below. This involves determining turn-around stock, managing the return of defective parts, scrap, turn-around times, and (in-house) repair processes.
For many operators this has proved to be a challenge. Since spare parts management knowledge is decreasing, ERP and the majority of inventory management solutions do not support managing the repair loop and operators are losing or lacking people with the required expertise.
Getting the combination right
Undoubtedly this requires an ‘investment’. But how can you create the best combination of the right experts and the right tools to be able to achieve the required improved results? And where to start? Having the right experts work with standard (not suitable) tools won’t motivate and keep them. Suitable tools with general, instead of specialized planners, won’t lead to the required results either.
One of the most common pitfalls is believing a software product will fix all problems by itself. Even the most advanced software solution requires a basic knowledge of spare parts management. And spare parts inventory management differs quite a lot from general inventory management due to lower demand, higher prices, unreliable lead- and repair times, criticality, etc. If this knowledge is not available in-house, training or some form of periodic support will be required to achieve the desired results. This opens the door to suitable third party support for spare parts inventory management or even outsourcing it completely. It depends on the operator which level of support provides the best fit.
Planning as a service
So our ‘answer’ to operators is to take an objective look at the current state of your spare parts inventory management and the gap to its required state. Possibly, external support can add value. And moreover, we are not just talking about outsourcing the execution and follow-up of purchase orders, but the planning and control of the entire service supply chain. Many of you may find this a wild idea; we are convinced however that this is a solid solution. Providing the required experts combined with the right tooling to obtain the best mix of availability, investments and costs of your spare parts inventory.
We are curious which operator dares to conquer its own obstructive beliefs, assuring best value for money. Let us know your thoughts!