October 08, 2012
Credit: Photo Credit: Liebherr Aerospace
Paul Seidenman and David J. Spanovich San Francisco
In the arcane world of airline technical services purchasing, the dynamics are changing along with the economics of the industry.
“Until a few years ago, the engineering staff played a much larger role in technical purchasing decisions than it does today,” says Jonathan Berger, vice president of MRO services for ICF SH&E, an international aviation consulting firm. “But technical staff input has been greatly reduced at most airlines and has shifted to supply-chain and purchasing management groups. Typically, they have more of a business than an engineering background.”
John Hunt, managing director of Technical Engineering Group, an Irish manufacturer of aerospace parts, has seen an identical trend in Europe. “Until recently, you just had an airline service engineer looking for a part. Now, people want some understanding of what it will cost—sooner and faster—than before,” he says. Hunt attributes this to persuading more purchasing people involved at an earlier stage of the acquisition process. “From our viewpoint, they are being a lot more professional about it,” he adds.
Alex Vlielander, president of Liebherr-Aerospace-Saline, reports that this trend is especially noticeable at the larger operators. “In the past, we may have dealt with just one department or division—now we find more 'cross-functional' or interdisciplinary committees involved with purchasing,” he says.
Vlielander, whose Saline, Mich.-based company repairs Liebherr-Aerospace components for landing gear, flight controls, and engine-bleed and cabin-air-management systems, observes that there is now “more direct involvement” from upper management and with emphasis on the financial side.
“Typically you see titles such as 'commodity manager' and 'asset manager' becoming involved,” he notes.
Cross-functionality is, in fact, integral to technical services and supply-chain oversight at Southwest Airlines, says Bill Tiffany, the carrier's senior director of supply-chain management. “It falls under two groups: one is responsible for the procurement of engineering and MRO services and components; the other focuses on inventory or supply planning,” he notes. “Both are positioned to work side by side.”