Merging companies, moving and culling unneeded inventories can be both energizing and stressful.
There is the excitement generated from new opportunities and the prospect of creating something superior—but there is also the sheer hard work of overcoming unexpected obstacles to make this happen.
Just look at the proposed merger of American Airlines and US Airways. Instead of celebrating the creation of one of the world's largest airlines in August, the two are scheduled to appear in a U.S. District Court on Nov. 25 to defend anti-competitive concerns.
While the pace of airline mergers might slacken, consolidation in the aftermarket will continue. Kellstrom Materials is a good example of why.
When Kellstrom purchased AirLiance Materials from Lufthansa Technik on May 17, it combined two medium-sized companies into one large entity with complementary product lines. Clients gained a broader channel of distribution, more parts choices and new customer interfaces.
The deal happened quickly, and Roscoe Musselwhite, Kellstrom Materials president and CEO, immediately started looking for the synergies.
In doing so, he says that “you discover stuff you don't need,” like DC-9 air stairs. “We've been scrapping a lot of material we once loved,” Musselwhite notes, so that the prime commercial material located at Kellstrom's Florida facility will fit into AirLiance's warehouse near Chicago O'Hare International Airport.
It's like moving to a new house—you realize what possessions you value most—and you purge the infrequently used things because the cost of relocating them is high.
Kellstrom's parts-scrapping is not making a huge economic impact, “maybe a couple $100,000, [but] it's a necessary step,” says Musselwhite.