Why You Shouldn't Use Moving Average in Aircraft Spare Parts Forecasting 10/3/2017

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:

## First: Moving average leaves out too many causal variables

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:

• Salt deposit location and density.
• Temperature and pressure.
• Humidity and air contents.

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.

## Second: Spare parts demand is rarely consistent

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:

Tags: CAD Service Lifecycle Management (SLM)
About the Author General Howard Brent Baker

### Major General H. Brent Baker, (Retired) VP Worldwide Federal Aerospace and Defense

In his role at PTC, Maj. Gen. H. Brent Baker Sr. (Retired) is responsible for strategic planning and business development in the worldwide FA&D market vertical with a specific focus on gaining first-to-market competitive advantage in the adoption of technology and smart, connected enterprise solutions.

General Baker was most recently Vice Commander, Air Force Materiel Command, Wright-Patterson Air Force Base, Ohio. The command employs some 80,000 people and manages \$60 billion annually in research, development, test and evaluation, while providing the acquisition management services and logistics support required to develop, procure and sustain Air Force weapon systems.

He also directed policy and procedures affecting AFMC aircraft maintenance, munitions, supply, logistics plans, transportation and packaging methods, and logistics data systems. Finally, as the staff lead for logistics and life cycle sustainment issues, General Baker planned and coordinated product support and acquisition logistics for fielded and emerging Air Force weapon systems.

General Baker entered the Air Force in 1979 as an enlisted member and was commissioned in 1985 through Officer Training School after graduation from Southern Illinois University. He has had numerous assignments, such as the Director of Logistics, Headquarters Pacific Air Forces, Joint Base Pearl Harbor-Hickam; Chief, Materiel Management Flight, 8th Supply Squadron, Kunsan Air Base, South Korea, and headquarters staff positions, including Chief, Supply Policy and Procedures, Headquarters Air Combat Command, Langley AFB, Virginia. General Baker also served as a presidential fuels flight officer at Joint Base Andrews, Maryland, and as the Commander, 18th Mission Support Group, Kadena Air Base, Japan. He served both as the Vice Commander and Commander, 95th Air Base Wing, Edwards AFB, California, and as the Commander, Air Force Global Logistics Support Center at Scott AFB, Illinois, and Commander, Ogden Air Logistics Complex at Hill AFB, Utah.

In addition to achieving several educational distinctions in the military for strategic studies, anti-terrorism, and logistics technology, General Baker (ret) holds a Bachelor of Science degree in industrial technology from Southern Illinois University, Carbondale and a Master of Science degree in administration from Central Michigan University, Mount Pleasant.