Commercial airline inventory can be challenging, added by the tremendous pressure to lower the cost per flight hour. To keep parts in check, however, successful commercial airlines are using a three-pronged approach to service parts management (SPM). It’s a simple formula: Have the right part, in the right place, and operate at the right cost.
Managing your service part inventory is challenging enough, but add in the complexity of parts, the amount of parts (when working with PTC on a recent solution, Qantas had to import 28,000 components part numbers and 60,000 expendables part numbers), and where your parts need to be, and those logistics become incrementally more difficult to manage.
If the scenarios below sound familiar, you may not have a truly optimized inventory:
Scenario 1: Wrong part. Is your part in a Des Moines hangar when it needs to be in Denver? If it’s not, aircraft availability plunges, flight schedules are in disarray, cycle times increase, and work stoppage is a normal occurrence.
Scenario 2: Wrong place. Technicians need a Y part but only have a hangar full of Z parts. If this is so, your flight schedule adherence drops, maintenance productivity drops, and customers become disgruntled.
Scenario 3: Wrong cost. Your costs are out of control. Your revenue is falling, your gate-related penalties are piling up, and your service is being delivered at the highest cost per flight hour.
All is not lost. In fact, Qantas Airlines developed a two-year transformation program to reduce its cost base by $2 billion and avoid these types of problems.
Called the Supply Chain Transformation Program, in a nutshell, the four-stage process helped the airlines consolidate its footprint in line with changes in the maintenance organization and reduce duplication. They re-engineered processes and their operating model to deliver the next wave of value. Up next, continuous improvement helped increase its operational efficiency, planning capability, and visibility of data. Today, the airline is collaborating customers and suppliers to improve its ability to predict changes and risks in its network.
Remember, the first step to keep in line with the right part, right place, right cost formula is to continuously optimize inventory according to fleet activity, make “parts availability” your daily mantra, and always look for ways to optimize inventory to keep costs down and ultimately grow revenue.
Want even more information on optimizing your inventory? Download our hands-on infographic that helps illustrate the advantages of developing a strategy to have the parts where they’re needed, when they’re needed: