EASA Part 145 Optimizing the Supply Chain

Sofema Online (SOL) www.sofemaonline.com considers best practices to support supply chain optimization.

Introduction

The supply chain is a key element within the Maintenance Repair Organisation (MRO), correctly managed it may contribute to the overall efficiency of the process, if it is not controlled in the best way the supply chain may easily contribute to unnecessary overhead.

When we talk about the aviation supply chain we are essentially talking about all stages which are involved in delivering the parts and materials where they are needed, when they are needed at the best possible cost. Moreover, consideration is given to transportation and logistics both within the organisation and external to the organisation, cost, quantity, and lead time being of relevance to the understanding.

A major challenge which faces the managers of supply chains concerns a lack of awareness concerning future needs, this effectively obliges them to default to reactive behaviour which inhibits opportunities to develop cost-saving strategies.

When Organizations do not have sufficient understanding of the supply chain they are essentially forced into knee-jerk solutions which typically result in higher costs, for example, consider the cost of repetitive AOG (Aircraft on the Ground) purchases.

Supply chain optimization can be explained as aiming to minimize operating costs and streamline processes throughout the supply chain to improve efficiency, reduce risk and ensure stock availability at each stage.

Optimizing your supply chain will also make it more resilient and ensure processes are in place, so your business is better positioned to react to any unforeseen supply or demand disruption.

Industry Developments

The latest generation of Aircraft (since 1990) typically requires a different level of material support when compared to the previous generation of aircraft. They also require a significantly lower level of maintenance (when compared with MSG2 & previous aircraft).

With the obvious exception of frequently used parts (Wheels Brakes etc), the reliability of modern Aircraft Parts continues to see improvements in reliability. Software is “king” (almost all parts have an electronic interface which also increases the cost).

Whilst modern aircraft are more accepting of short-term defects, to manage the fleet using the MEL (minimum equipment list) is not to be considered a positive as it removes one layer of safety.

The challenge remains to ensure the optimum availability of parts and materials accommodating lead times and managing quantity for the best price.

Opportunity to Improve Control of the Supply Chain

» Developing appropriate stock level and re-order levels.

» Reducing the downtime waiting for parts and materials.

» Developing techniques for improvement (For example by analysis of Key Performance Indicators (KPI’s) is considered Supply Chain Optimisation.

An optimised SCM process brings together the availability of products and parts throughout the process including original equipment manufacturers (OEM’s), distributors, and customers.

Improving the Supply Chain Knowledge – Developing Predictive Behaviour

Inhibitors may include a significant lack of data, inappropriate timelines, and data which is available but not in the best format for the purpose it is required.

Data disconnects what Is required when it is required, and how much is required is not delivered in a timely way, plus the variability which is introduced by third-party contracts can deal a heavy blow to the supply chain system.

Often supply chain managers find that they are making “guesstimates” and if caught short meet the financial penalties. When the time available to procure diminishes immediately both the material or part costs together with the delivery costs rise considerably. As the time to procure diminishes opportunities also become restricted, which can have negative impacts on downtime.

Part of the Solution? Synchronization of the Supply chain!

To deliver a management system that has an empathy for the supply chain, to maximize the order time, to work within windows, to set up an internal process, where poor performance is allocated costs and therefore quantifiable in the bigger picture, to ensure the maximum coordination possible of process and procedures.

A significant first step is to understand as many of the supply chain issues as possible, then to explore a full understanding of we have these issues, followed by an analysis of the various proposed solutions.

Service Level Agreements can be introduced to promote internal discipline with the development of feedback and Key Performance Indicators “KPI’s” to measure effectiveness.

Vendor and Original Equipment Manufacturer (OEM) decisions are key to effective management, also taking into consideration the role of the Operator and the MRO in respect of spare management.

Enterprise resource planning (ERP) is business process management software that allows an organization to use a system of integrated applications to manage the business and automate many of the back office functions. However, its impact may be limited without the organisation also embracing the willingness to change processes.

ERP systems require configuration and analysis together with the willingness to modify and develop the organisations' systems. Together with a direct connection with the process of supply chain management (SCM).

The most effective processes rely on the analysis of a significant amount of data including information related to the Inventory Stock Levels and the Storage of Parts and Material, The Management of Assets and the Maintenance of Value, and finally the procurement process.

The major need is for the above elements to be considered together and that they not be subjected to the “bunker” mentality where the subject areas are dealt with independently.

Supply chain optimization best practice

A crucial part of supply chain optimization is maintaining healthy inventory levels. It’s critical to keep track of inventory and run regular reports to check whether levels are correct.

Ideally, you should track inventory levels in real-time and follow items along the supply chain, from your suppliers to your customers.

Inventory management or, even better, inventory optimization tools can provide more reliable and comprehensive data. They can accurately forecast demand, classify inventory items, calculate safety stock and reorder quantities, and provide a wealth of reports.

Build buffers into the supply chain (increasing capacity at each stage of your supply chain.) – balance the return against cost!

Effective management of the supplier networks – ensure criticality and potential exposure is addressed & mitigated where possible. (Alternative Suppliers?)

Maximize the use of technology related to data management and improve forecasting.

Ensure the availability of knowledgeable and competent staff – training is the key (Initial & Recurrent) Ensure you have people with the right skills at each stage of your supply chain.

Next Steps

Sofema Aviation Services www.sassofia.com and Sofema Online www.sofemaonline.com offer multiple Production Planning & Maintenance Planning EASA Regulatory Compliant & Vocational Training. Please see the websites or email team@sassofia.com for additional details.