One is the increasingly just-in-time nature of lean operations. If an MRO or airline is reducing its in-stock inventory, managing logistics is critical to keep aircraft flying. “If your inventory is accurate and your logistics processes are predictable, you can minimize how much you need to invest in components,” says James Elliott, product marketing manager for Mxi Technologies, a provider of MRO software.
Another is the increasingly complicated and fragmented nature of today's supply chains. Complex parts may be assembled or repaired at multiple locations and involve several trading partners. “When everything was done in-house, you could walk across the hall and find out what's going on,” says Ed Wodarski, vice president of solutions for aerospace and defense for Servigistics. “When processes are outsourced, you're at the mercy of other people's databases. What's more, you can't schedule maintenance without the right parts, and you can't do planning without knowing where those parts are.”
Last, and just as important, logistics is now a competitive advantage for those who do it best. “For the companies that can ship faster, plan better and provide more timely information, logistics is an area where they can differentiate themselves,” says Hannes Sandmeier, Oracle's vice president for applications development.
Supply chain technologies are the enablers of logistics information. The technology tools can be divided into four categories: enterprise-level systems of record, supply chain execution systems, visibility and event management, and data collection. Here are the roles that each of these plays:
It starts with a system of record, a software application that receives and aggregates information from a wide variety of sources. The most common system of record is an enterprise resource planning (ERP) system. When it comes to optimizing logistics, the most important application may be parts or repair forecasting based on the aircraft's performance and operational schedule, as well as the number of flight hours on the major components and their maintenance history.
With that information, a fleet operator or MRO provider can do a better job of planning what parts and components will be needed and positioning them at the right locations. That is especially important for a fleet operator with more than a handful of storage and repair locations.
“You want to optimize your inventory across all of your locations at the highest possible service level, given your budgetary constraints,” says Sandmeier. “If you're only operating three locations, that's not so difficult to do. If you have 200 locations, you need to understand the fleet of parts you are trying to address. Otherwise, there's no way even the best transportation system can move those parts around in a cost-effective manner.”
Once a network is in place, a global inventory, or network optimization, tool collects information from other planning systems to determine how much stock should be maintained in each location. By constantly monitoring inventory levels and operational plans, the system can create the transfer orders to rebalance inventory levels. “We don't tell customers where to put their warehouses or repair locations,” says Erik Lindholm, head of product management for Syncron, a supply chain management software provider in Stockholm. “But by constantly monitoring the inventory levels at those locations, we optimize inventory across the network.”
Spare parts and repair-planning systems also act as systems of record for sourcing and tracking the parts required for a maintenance event. “In the MRO world, buying a part is the last resort,” says Wodarski. “The first logistics challenge is always whether I can move parts I already have in my network from one location to another where they're needed. If so, how do I get it there? If I can't satisfy the demand with parts that are already in my network, do I have something on order? If not, do I go to a parts broker or to the OEM?”
For any given part number, Wodarski adds, an airline or an MRO provider may have several parts in motion, such as one that is out for repair or in transit from a supplier. “The coordination and control of those simultaneously moving inventory positions is critical,” says Wodarski.