3 Signs Your Airline's Supply Chain Isn't Optimized

Many airlines assume they have an optimized spare parts inventory. However, that's not always the case. Some may be using a multi-echelon planning solution, in which they stock parts based on the capacity of individual locations instead of the relationships between those locations.

There are three signs that your airline's parts supply chain isn't operating optimally:

1. You fail to deliver the correct parts

If your MRO team frequently returns parts, then there's a chance you have bad service bill of materials data. If the system through which you're managing parts doesn't have the correct parts numbers assigned to specific aircraft, then your maintenance crews will continue to receive materials that do not match on-wing parts.

2. Parts are not often at the correct place

A variety of factors could be at the root of this issue. For example, if you don't have the capability to track serialized parts in near-real-time, the life limits on those parts, and the flight hours each individual aircraft has completed over a given period of time, your forecasts may be inaccurate.

Vinod Arekar, a service supply chain expert and PTC fellow, discussed how pulling data from sensored assets (including aircraft) allows organizations to better achieve their equipment availability goals. While the focus of his article is about how fill rates mislead parts planners, he acknowledges that much of the data airlines, medical device manufacturers, and other companies need to develop more accurate parts forecasts are readily available to them.

3. Your inventory costs are out of control

This is a sign that you're probably using manufacturing supply chain management techniques to run your aircraft parts supply chain. The problem with doing so lies in the fact that turnover rates for manufacturing or retail supply chains (which most ERPs are designed to support) are usually much larger than those of service parts supply chains.

Some ERPs may recommend that you stock a large number of parts to meet your fill rate or equipment availability objectives. However, if you generally have low inventory turns, then you'll quickly accumulate excess stock, which may eventually become inactive, depending on the average time between inventory turns for a specific part.

Want even more information on optimizing your inventory? Download our hands-on infographic that helps illustrate the advantages of delivering the right part, to the right place, at the lowest cost:

Service Parts Management for Commercial Airlines