Calculating the moving average of your spare parts demand is one of the most basic ways to forecast which parts maintenance will need to service aircraft.
For example, if you want to use moving average to predict how many axial compressors you’ll need over the next 18 months, you can add up the number of axial compressors the maintenance department consumed over the past 18 months, and divide that number by 18.
This is an example of what accountants call “simple” moving average (SMA). It’s an uncomplicated method, but it isn’t the best option for forecasting how many spare parts you’ll need in a given period of time. Here are two reasons why:
Assuming we’re only discussing SMA and ignoring other iterations of moving average, this technique may factor in how many parts your maintenance department consumed over a certain time period, but it doesn’t consider what caused those parts to break down.
For instance, a study from Syverud et al (2005) noted the following conditions could impact axial compressor’s deterioration:
Compare two identical aircraft in your fleet. One servicing the APAC region, the other Europe. According to Intellicast, Ho Chi Minh, Bangkok and Manila have humidity ratings of 84, 94, and 100, respectively. Compare that with Vienna (44), Stockholm (49), and London (45). Even if you only consider humidity, it’s clear the parts in each plane will require different levels of service over time. SMA doesn’t reflect this phenomenon, and as a result, cannot deliver an accurate spare parts forecast.
One of the greatest reasons why you shouldn’t use moving average in spare parts forecasting is because demand for components is usually inconsistent. If your service organization only consumes 5 tie rods over four months but uses 13 tie rods two months later, your moving average will be 3 per month.
According to your SMA, you should buy 3 tie rods per month over six months. However, in the event you only consume four parts over that time period, you would be left with 14 excess parts. This excess can exacerbate inventory costs, especially if you apply the same method across 14,000 parts numbers.
There’s no guarantee SMA will help you get the right parts, at the right place, and at the right time. These are the capabilities you need to establish an optimized spare parts inventory, which we discuss in further detail in the infographic below: