To most service professionals in the A&D sector, there’s an obvious connection between spare parts management (SPM) and maintenance, repair and overhaul (MRO). However, few institutions actually establish that connection by integrating SPM and MRO technologies.
It’s a contradiction Major General (Air Force, Ret.) H. Brent Baker, Sr., has encountered many times throughout his career in logistics. In lieu of a webinar he hosted on this very issue last September, we caught up with General Baker to discuss the value of connecting SPM and MRO solutions.
Many companies in the aerospace sector have some good MRO tools, but they’re dealing with a lot of bad bill of materials data: They list obsolete parts, they’re not grouped according to component or asset – those kinds of issues.
An SPM solution filters out all of that bad BOM data by using what I call “multi-indenturement.” Essentially, a strong SPM tool logically breaks down parts across 15 contextual levels, so it quickly finds missing, inaccurate or outdated parts information.
At the same time, when you connect an MRO to an advanced SPM tool, that MRO can feed all of this rich maintenance data back to the SPM system – mean time between failures, number of parts available, first-time fix rates – those sorts of metrics. The solution can use all of that data - in addition to other factors that affect spare parts supply and demand - to make more accurate forecasts.
RBS recognizes that your organization is never going to be able to afford to buy every part it’s going to need at every location around the globe. So what it does is create a pool of locations that can support your operational needs.
Let’s say you run an RBS algorithm and it finds that, based on all of your locations and aircraft, you need 10 spares, but you can’t afford to buy that many. So, it tells you to buy five and put them in the locations where you’re most likely going to need them.
What this does is establish your aircraft availability as your key operating metric. For years in the supply chain, we’ve used a lot of metrics that, quite frankly, probably weren’t the best.
Fill rate, believe it or not, is one of those poor metrics, because you may say “I have a 90% fill rate – that’s pretty good,” but that other 10% may consist of parts which are critical to an aircraft’s operation. So while you may be able to supply the nuts and bolts, you may not be able to deliver that one key part that determines an aircraft’s availability.
That’s exactly right. I spent 37 years managing the Air Force’s supply chain, and one of the problems we always had was excess inventory.
It was a bit of a conundrum because, on one hand, our aircraft availability rate wasn’t up to par because we were missing parts. On the other hand, we had hundreds of millions of dollars of excess inventory that was never used. So you think “how does this happen?” We were buying a lot of parts but not the right mix of parts.
That’s why, when you combine advanced SPM with your MRO capability, the SPM software can say “these are the parts you’re going to need,” and adjust the spare parts supply chain accordingly. The folks we’ve seen do this have increased aircraft availability anywhere from 6% to 10%. That’s huge, especially if you have more than 5,000 aircraft.