When you’re in charge of managing parts inventory in an environment where the stakes are high—like aerospace and defense (A&D)—equipment downtime might mean your entire critical mission fails.
Many of the world’s leading A&D brands use service parts management (SPM) solutions for readiness based planning, helping them ensure parts are available exactly when they’re needed.
Imagine your company is responsible for servicing a fleet of commercial jets. You need to plan which parts you’ll have in stock for service that’ll be performed next week. If you can’t forecast which parts you’ll need (and stock them in advance), your aircraft(s) might be unavailable as you wait for necessary parts to arrive. That’s just bad business.
The supply chain operations reference (SCOR®) model is recognized worldwide as the best method to maintain highly complex assets, especially those subject to extreme stress and environmental conditions—like those used in A&D.
According to APICS, the SCOR model describes the stages of fulfilling a customer’s demand. It is separated into 6 primary management processes: plan, source, make, deliver, return, and enable.
A service parts management (SPM) solution helps you manage your inventory for all stages of your customer’s need for parts—even in the high-stakes A&D environment.
So, if SCOR the model helps define your process for filling your parts inventory. Then, in order to measure whether that process is being managed effectively, and whether your customer’s needs are being met, APICS identifies 5 main supply chain performance metrics. They are:
Let’s see how the PTC Service Parts Management (SPM) solution helps address these performance attributes within an A&D organization.
Is your service organization reliable? Reliability is key for A&D organizations who can’t afford to experience downtime. According to APICS, this performance attribute is linked to being able to consistently perform tasks as expected. Typical characteristics of a reliable organization: you deliver service on-time and stock the right number of parts. When your SPM solution helps you stock the right inventory, you can deliver promised service levels without performance suffering due to part-supply-delays.
Are you responsive to customer needs? This is defined as the speed at which your service organization completes tasks. APICS has a series of cycle-time metrics that can be used to measure your organization’s responsiveness. How can an SPM solution help you respond to customer needs? An accurate system model calculates target stocking levels (TSLs) and optimizes inventory investment. Within a responsive A&D organization, the right parts are available at the right time, which reduces costly service interruptions.
How easily can you respond to market shifts? An agile service organization is characterized by APICS as having the ability to respond to external influences quickly—with flexibility and adaptability. Does your SPM solution put you in a position where you are comfortable and confident responding to marketplace changes and gaining (or maintaining) a competitive advantage? If not, it should.
Is your service organization’s budget being managed effectively? It’s easy to make sure you have all of the parts you need if you’re working with an unlimited budget. However, having the right parts on hand becomes more challenging when you’re working with budget constraints. This performance attribute measures whether the cost of your supply chain processes is being managed effectively. The following are factored in to this attribute: labor costs, material costs, management costs, and transportation costs. Effective SPM solutions optimize every asset’s function over its lifespan and control inventory levels globally. This increases the asset availability and decreases operational costs.
Are you managing assets efficiently? This performance attribute measures whether you utilize strategies to effectively manage inventory for all parts of your supply chain. You’ll assess (with the help of your SPM solution) whether you can reduce inventory stocking levels and whether in-sourcing versus outsourcing is more cost effective. According to APICS, you’ll measure this attribute by determining things like inventory days of supply and capacity utilization.
To successfully create, operationalize, and manage assets through sustainment, A&D service organizations must have a comprehensive approach to supply chain management. End-to-end methods based on the SCOR model use COTS (commercial off-the-shelf) software to create a digital thread that runs through every stage of the lifecycle.
According to APICS, “The strategic challenge for a company is to define, align, and prioritize the competitive requirements for each attribute knowing that [you] will have to choose where [your organization] will be best in class and where it is acceptable to perform at an average level.”
An effective SPM solution helps you choose which of these attributes provides the best ROI for your organization’s needs.
To see more expert insights on service parts management for A&D, check out our infographic and read the blog post for an interview with General H. Brent Baker, Retired USAF.