February 11, 2013
Credit: Credit: FedEx
At first glance, you would think logistics at PDQ Air Spares would be fairly simple. The Hampshire, England-based distributor of spare parts does very little outbound shipping. Its airline customers use their own freight agents to manage order shipments. Nor does PDQ handle its own inbound shipments; it outsourced that function to B&H Worldwide. The third-party logistics provider negotiates rates and schedules shipments with carriers such as FedEx, DHL and UPS for PDQ.
At the same time, managing logistics and logistics costs has become critical to PDQ's business. “If we commit to a 48-hour turnaround time, we have to hold a lot of inventory. Or we need to know that we can get it delivered from the U.S. to the U.K. in 24 hours so we can fill an order on time,” says Matthew Price, general manager. PDQ stocks a core nucleus of products, but to reduce inventory costs, it places a number of small orders for overnight delivery as sales orders come in. Striking the right balance on an as-needed basis is a challenge. “We have to watch those shipments carefully because we can't pass on the cost of inbound freight,” Price says.
B&H Worldwide developed a software application that aggregates the status of all PDQ's shipments on one screen, regardless of the freight carrier. Price gets an alert when something goes wrong—say, when a part misses a flight connection, does not reach the next stage of its journey on schedule or does not clear customs. That allows him to alert his airline customers in case they have engineers and technicians on standby, awaiting the part.
“If I have ordered an item that is supposed to be delivered tomorrow, I don't need to know when it's going right,” says Price. “I do need to know when it goes wrong so I can take steps to address the issue. That's what I need from my logistics these days.”
PDQ's approach is an example of the changing nature of logistics and supply chain management today: Information about the movement and management of parts, components and supplies is as important as the physical movement of those items. That is true whether the items being tracked are inside a warehouse, hangar or MRO facility, or in transit from one point to another.
“Logistics today is all about transparency and the exchange of information,” says Greg Colgan, general manager of the Cavok division of Oliver Wyman. “It's great that you can send me an advance ship notification that tells me you're going to ship something. But what I really want to know is where my parts are now, what was done to them and when [I will] get them back.”
In an industry where an audit trail is mandatory, logistics information is critical for compliance, Colgan notes.