A strategic area of MRO, spare parts inventory management is characterised by increased lead times and labour shortages. At the same time, efforts are also under way with parts traceability and operational optimisation. Mario Pierobon finds out more.

The current challenges regarding spare parts inventory management have reduced the availability of piece parts and manpower to an unprecedented level, states Bruno Tricoire, senior vice president for components at Air France Industries KLM Engineering & Maintenance (AFI KLM E&M). “We have strong recruitment actions, and manpower is now gradually recovering,” he says. “However, new line replaceable units (LRU) and piece parts deliveries are still critical and affecting all MRO activities, whether performed by OEMs, airlines, or MROs like us. One of the new challenges for several OEMs is the increased competition with other industries inside their own Tier 1 and Tier 2.”

Spare parts lead time

According to Tim Russo, president of STS Component Solutions, inventory availability and increasing manufacturer lead times are indeed at the forefront of challenges related to inventory management. “While there are a number of ways to mitigate these challenges, our group has invested heavily in technology and inventory forecasting tools to leapfrog the status quo and provide value to our customers,” he explains. “While ensuring part availability is always the primary goal, providing resources and options when one does not have a part is also critical. Our team continually looks to provide multiple options to our customers, especially when part availability is scarce.

Indeed, the past few months and in particular since Covid-19 have seen some dramatic changes in terms of MRO turnaround time, affirms chief executive of DBK Aero Delphine Kennedy. “What we used to see in terms of repairs and overhaul of our components was fairly quick, namely six to ten days for tests, 20 days for repairs and 30 days at most for overhauls,” she says. “Currently, however, we are talking somewhere around 30 days just for bench test, more than 60 days for repairs and significantly more to get back overhauled units.”

The availability of parts is a current challenge that did not exist earlier, points out Didier Granger, president and chief executive of OEMservices. “This is due to shortages of the supply chain combined with a strong demand from the airlines,” he explains. “At the present time, the availability drives the value of the parts, implying a fair market value appreciation for used serviceable materials (USM), reaching sometimes a higher price than a new manufactured part. The level of the technical standard of the parts is also key, since the supply of recent standards procures more reliability and safety to the end-customers.”

While there are exceptions, the current social and political climate with crisis in multiple regions of the globe makes it harder and harder for MROs to get the raw material and finish the USM components, highlights Kennedy. “We have heard from OEMs that they aim to be back to normal to supply the spares needed by mid-2024, but we believe this target is difficult to reach. We cannot pretend to foresee the future, but we do not expect much to change for a good couple of years unfortunately.”

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Labour shortage and traceability

There are other constraints impacting the current supply chain, according to Russo. “Pre-Covid, the challenge of labour and employee turnover was less impactful to organisations,” he says. “Post-Covid, there has been a shift within the ranks of most organisations which has created increased turnover, which can lead to less efficient processes and a potential knowledge gap when compared to the pre-Covid work environment. Organisations that identified this quickly and invested in training and on boarding and created hybrid work environments have been positioned much better over the past few years.”

According to Granger, while the supply of parts remains key, it is also important that it comes with the right technical and traceability standard. “Traceability of parts is becoming more and more important, and a full back to birth traceability is often requested. It is a trend in our activities to ensure and guarantee a full detailed traceability in the years to come. The industry will have to cooperate in this objective,” he says.

Operational efficiency

As the industry reaches new levels of growth, it is important to continue to challenge the status quo, explains Russo. “It is necessary to embrace technology and drive further operational efficiencies, that improve the operations and also make it easier to do business,” he says.

Quality is the first goal in spare parts inventory management together with flight safety, affirms Tricoire. “In addition, we strongly believe that customers can benefit from advanced services to improve their operational performance,” he says. “One example is the predictive maintenance service that we propose under our Prognos brand, and that can reduce operational disturbances by anticipating components failure before they happen.”

Granger further highlights that, looking to the future, the search for optimisation needs to consist of improved prediction of removals, tracking of the supply chain and interconnectivity of the various players. “IT tools improvements, communication, processes and disruptive approaches such as predictive maintenance and artificial intelligence will drive the works that our sector will require,” he says.

The whole sector – including MROs and OEMs – should focus even more on additional repairs development and develop a regional supply chain approach and the ‘green supply chain’, according to Tricoire. He concludes: “Both are important leverages to reduce costs, improve efficiency and match sustainability commitments.”

This advertorial feature was first published in MRO Management – November/December 2023. To read the magazine in full, click here.