How the world’s third oldest airline modernized its parts supply chain
If you’ve flown on a plane more than once, you have probably experienced a flight delay. That’s not hyperbole, that’s math. In the US, 40% of flights arrive after they are scheduled to land. Even if you only count flights that are delayed more than 15 minutes, one in five flights are late. That’s not a great track record.
Do you know what the number one cause of flight delays is? Your first guess is probably “weather,” but in fact, the airlines themselves are responsible for the majority of delayed flights.
These delays can stem from a number of causes, including computer problems and mechanical issues. And of course, when one flight is delayed, it has a cascading effect across the schedule for the rest of the day and sometimes into the next.
Flight delays are a serious annoyance for travelers and airlines alike. They are also really expensive. According to one study, missed connections, flight delays, and cancellations cost US passengers $16 billion a year, for an average of $37 per hour per passenger. The cost to the airlines themselves is $8.3 billion a year. And that’s just in the United States. Globally, delayed flights costs airlines as much as $25 billion a year.
The Qantas Airways story
Three years ago, the survival of the world’s third oldest airline was in doubt. Qantas Airways is Australia’s biggest air carrier. It accounts for two-thirds of Australia’s domestic air travel. Qantas also serves 15% of Australia’s international travelers. Australians rely on Qantas to get them where they need to go. The company reported a loss of nearly $3 billion (AUD) in 2014.
Qantas knew that it had to find a way to reduce costs as quickly as it could. The company also knew that its parts inventory management was costing more than it should, so they turned to PTC for help modernizing its parts supply chain.
With 70 stock locations, 28,000 components part numbers and 60,000 expendables part numbers, Qantas began the project with a huge amount of data to organize and analyze. PTC worked with Qantas for more than a year to implement a Service Parts Management solution. How did it go? Rick Fraccaro, Qantas Engineering Head of Supply Chain, says it was one of the smoothest software launches he had ever experienced in his time there. Check out our case study to learn more about how PTC and Qantas worked together to optimize their inventory and minimize their costs.
As a result of implementing PTC’s Service Parts Management solution, Qantas has been able to reduce inventory on hand without sacrificing parts availability, which is critical in a business as time-sensitive as theirs. Better service parts management has meant that Qantas can reduce costs. And it can also cut down on the number of times its customers are sitting in the airport waiting for a replacement part to arrive so their plane can take off.
Learn more about the Qantas Service Parts Management story.
Qantas just didn’t implement a better software system. They also helped their employees learn how to use inventory data to create product configurations and model probabilistic maintenance bills of materials. Can your company make the kinds of improvements that Qantas has achieved with Service Parts Management? Read the Qantas case study to find out
Bradley Rhoton is the Marketing Manager for the Servigistics Business Unit at PTC. He leads and organizes the Servigistics client affinity group organizations and facilitates best practice sharing and knowledge transfer between PTC, PTC clients and industry thought leaders. For 13 years he has worked closely with Servigistics clients to help capture their service program accomplishments and share their success stories.