Best Practices To Uncover Inventory Inefficiencies

In an industry defined by unpredictable schedules, stringent compliance regulations, complex inventories, and constant change, optimizing inventory levels isn't just helpful—it’s critical to any aviation company's success.

Unfortunately, since 2018⁽¹⁾, we are seeing some alarming trends in the market that cost aerospace companies millions of dollars:

• 29% inventory increase
• 15% increase in extended cash conversion cycles
• 5% increase of cost of holding inventory

To address these issues, aerospace companies invest in Inventory Management Systems. And although these platforms are fundamental, most of them lack an end-to-end supply chain view. Because of this fragmented reality, where tools and data are disconnected, teams face blind spots preventing them from proactively optimizing inventory.

Why do healthy inventory levels matter?

Efficiently managing inventory levels is essential to strike the right balance—avoiding both overstocking and shortages. Excess inventory drives up carrying costs, increases obsolescence risk, and locks working capital. Conversely, insufficient stock may lead to blocked production, WIP increase, delivery delays, and a decline in customer satisfaction and revenue.

Poor inventory management can also strain cash flow, reduce profitability, and undermine long-term financial stability.

Flying Lean: best practices to optimize inventory for growth

Here are some best practices to help aviation companies promote healthy inventory levels.

• Optimize inventory levels to meet financial targets: Gain financial control by identifying excess inventory, understanding root causes, and executing targeted supplier actions to unlock working capital.
• Execute high-impact inventory actions to align procurement and production plans: Enable informed and prioritized adjustments that reduce excess stock and improve cash flow without disrupting operations.
• Reduce WIP by continuously assessing plan feasibility: Resolve production slowdowns by identifying material shortages early and optimizing plans.
• Accelerate customer deliveries to secure revenue & free up cash: Unlock revenue faster by identifying and executing full or partial deliveries, while maintaining high service levels and customer satisfaction.

• Ensure alignment on inventory actions across teams: Foster alignment across teams with real-time inventory insights, coordinated action plans, and clear visibility into the financial impact of every decision.

  

An inventory solution aligned with the entire aerospace supply chain

Pelico’s supply chain orchestration platform helps teams tackle all of the above best practices, and creates a shift from viewing inventory as a static figure to treating it as a dynamic lever to drive both operational efficiency and financial growth.

Pelico’s solution is built on 3 core pillars:

1. Uncovering inventory inefficiencies – Connect every part, order, and process across the value chain

Because every change has a ripple-effect on your entire supply chain, the only way to accurately surface inefficiencies is by connecting all parts, orders, and processes across the value chain. By doing so, Pelico helps aviation companies clearly identify areas of improvement, ultimately unlocking working capital.

2. From noise to clarity – Align all teams on impact-driven actions

Over 90% of ERP exception messages are irrelevant, leaving teams overwhelmed and lost. Pelico cuts through this noise, surfacing the critical 5% that drives 80% impact. With AI-powered recommendations—push-out, split, or cancel—teams can easily collaborate, simulate scenarios, and act with confidence to optimize inventory levels.

3. Move beyond static & disconnected reports – Expose hidden costs to align with financial goals

Pelico provides a real-time control tower with insights that bridge the gap between strategy and day-to-day execution. It helps top management ensure teams are working on the right priorities—avoiding unrealistic pull-ins, or wrongfully delaying critical parts. By seeing the true cost of material inefficiencies, Pelico empowers you to prioritize the actions that drive real impact.

If optimizing your inventory could unlock capital, boost efficiency, and future-proof your operations, are you ready to take the next step? 

Learn how Pelico can get you there

1. Source: https://www.alixpartners.com/insights/102ig5c/navigating-the-skies-of-w…