THE UNIQUE CHALLENGES OF AVIATION SPARE PARTS MANAGEMENT
Aviation inventory planning is a unique process that presents significant challenges for optimizing spare parts quantities and locations:
- Uncertain demand: many maintenance activities are performed ‘on-condition’, which leads to reactive, short-term planning only.
- Part demand: a combination of stochastic (uncertain demand) and deterministic, which means a single pool at a location must support these two demands.
- Infrequent demand: many components can have a demand of 1 or less per annum (10 demands per annum represents a medium to high demand profile).
- Complex and expensive components.
- High exposure to opportunistic costs: because non-availability of parts can delay or ground aircraft, airlines can be open to higher costs
- Differing availability levels: different parts have diverse operational impact
- Parts can be repaired and reused: inventory parts are not just consumed; rotable units are repaired repeatedly and have similar lifecycles to the parent assets (aircraft)
In order to meet service levels, an organisation’s inventory plan needs to find the balance between investment and spare parts availability.
INVENTORY OPTIMIZATION VARIABLES
REPAIR TO REUSE EXPLAINED
The “Repair to Reuse” inventory planning model contains the analytical sophistication required to address the uncertainty of demand, scale and complexity surrounding MRO inventory, enabling airlines and MROs to target optimal float levels to deliver service level and investment KPIs.
“Repair to Reuse” recognizes that rotable parts are repaired and returned to service and it supports MRO-specific inventory planning activities and decisions such as:
- Repair/Don’t-Repair at unserviceable removal
- Consignment Holdings
- Network Allocations
- Post Repair Allocation
- Part Liquidations
The “Repair to Reuse” approach differs significant from the purchase-and-distribute decisions within the manufacturing “Purchase to Consume” model. While purchasing might be a consequence of the decision-making process for the airline industry, it should be the last action considered.