MRO Management

Taking stock: Importance of valuable inventory of aircraft parts

Aircraft parts, inventory

Valuable inventory has to be carefully managed for regulatory, financial and operational reasons.

Aircraft parts have the distinctive feature of being expensive and therefore must be handled within short cycle times/turnaround times (TAT) in order to reduce inventory costs. Aircraft inventory control is therefore a critical activity to ensure both effective maintenance and a profitable use of multiple aircraft assets.

Some trends are developing and establishing critical mass with regard to aircraft maintenance inventory control, and they include software solutions, radio frequency identification (RFID) and the use of automation.

Aircraft parts

Industry trends

According to Dr Harald Kolbe, head of digital innovation at Lufthansa Technik Logistik Services (LTLS), there are four focus areas for warehouse digitalisation within the MRO industry.

The first area is the automation of the physical processes by using automated guided vehicles (AGV) and automated storage systems (ASS) and the automation of information processes by using, for example, computer vision and robotic process automation (RPA).

The second area is about developing paperless processes. The third area concerns implementing smart wearables like smart watches, smart glasses and smart gloves to support the line operative.

The fourth area is about using digital twins or generating added value by creating data-driven use cases such as inbound forecasts, he notes. LTLS’s digitalisation programme includes the use of digital assistants such as smart wearables.

LTLS is currently implementing ProGlove’s smart data glove, which features an integrated 2D scanner so that employees no longer have to hold a mobile scanner in their hand.

This means their hands remain free, cumbersome data entry is eliminated and the efficiency during check-in and follow-up processes is increased. An enhanced glove featuring an integrated display is currently in the works.

LTLS is also paying attention to data volumes: its incoming goods department has to input a wide range of data from more 10,000 documents every day. The data transfer – that is, reading, checking and entering the data – takes a great deal of effort and is prone to errors.

That is why the input screens will soon be filled in automatically rather than manually. For this purpose, LTLS will use document analysis with optical character recognition (OCR), complemented by an intelligent content analysis on the basis of IBM Watson.

Aircraft parts, inventory: Lufthansa

At Air France Industries KLM Engineering & Maintenance (AFI KLM E&M) the trend is to use RFID to follow and manage inventory.

“If you know what, where and when is needed you can increase the availability of the parts and reduce the stock in a ‘just in time’ manner. We are also working on a next step with AGVs and robotics to ease the process and make it more reliable,” says Jos De Kleine, manager of logistics development at AFI KLM E&M.

“Certainly from an MRO perspective, an integrated IT system showing real time stock levels, and actual live requirements backed up with minimum/maximum stock level control, are a minimum requirement,” says Mark Harris, head of business improvement and support services at Monarch Aircraft Engineering.

“Developments in RFID tagging now have their part to play in tracking consumables throughout a system and should be considered. This is something we have looked at initially for tooling, however, we are yet to incorporate it. With most IT systems capable of producing bar code data, this is an area where detailed control can be applied and so reduce operator error.”

Best practices

When it comes to managing aircraft parts inventory, there is a set of best practices to follow. In general, standard software applications, such as warehouse management systems (WMS) and transport management systems (TMS), are suitable and widely available to manage inventory.

“We find that the passive RFID and barcode in combination with enterprise resource planning (ERP) and WMS programmes should give a more reliable stock and make it available more quickly,” says De Kleine.

Good inventory control must include regular stock audits or cycle counts.

“Storage conditions, such as temperature and humidity control, should be continuously monitored and maintained within regulatory requirements. Controls such as ‘first in, first out’(FIFO) and ‘last in, last out’ (LILO) and shelf life reporting can play a big part in control of stock wastage and costs,” says Harris.

Aircraft parts, inventory

“LTLS is currently running a pilot project in Munich that focuses on dynamic warehousing by the use of an indoor localisation platform,” says Dr Kolbe.“Large, bulky aircraft parts take up a lot of room and often have to be moved around, which means location data needs to be continuously updated.

At the same time, all storage rebooking must be entered manually in the administrative system. By the use of our GSE 4.0 localisation platform we now automatically locate large stored components without the need for re-entry in the system. This reduces the administrative effort while increasing transparency in the warehouse.”

Specific requirements

Airlines and maintenance organisations have multiple requirements in terms of inventory control and software solutions are increasingly helping to meet these requirements.“The warehouse management process,

in general, must meet many specific requirements and regulations from our industry, for example, temperature and humidity control, dangerous goods handling, provision of a bonded warehouse, transport of spare parts on both land and air side. In turn, this requires a secured supply chain for airport supply, import and export customs clearance, air freight-specific material handling,” explains Dr Kolbe.

“Visual management and automated processes to ensure fast and accurate picks are two of the main requirements. Software should help the employee to make it better for the worker. Requirements like workload and number of picks are important to be displayed,” says De Kleine.

Holding excess stock for too long can be seen as dead money, so holding sufficient stock with excellent supply chain partners can help in having just in time stock.

“However, our industry has a vast cross-section of part numbers, which can be demanded by the OEMs and prove extremely difficult to source. By having a good stock control system and some level of stock forecast, the opportunities for stock disposal, if timed well, can be profitable,” says Harris.

Efficiency improvements

As the MRO industry is under constant pressure to achieve continuing efficiency increases to lower the overall cost and remain competitive, efficiency improvements can indeed be generated in the management of inventory.

The main aspects to consider are the speed of picks, accuracy on stock availability and space efficiency.

“As we are now solely an MRO without an associated airline, the typical spares holding is changing to be more in line with our customer requirements. This is shown in the reduction of typical customer-furnished types of parts and cabin furnishings held in stock,” says Harris.

“We now see and need to be on top of large numbers of customer supplied parts which must be transacted on their behalf to show stock integrity within our system.

We also need to able to report back to the customer at short notice„ back to the customer on parts used and parts returned both as supplied by us as the MRO, by the customer and by any third party suppliers.

This drives the need for quicker processing and streamlining of processes to deal with the demands of multiple customers.”

“We have identified several issues that lead to inefficiencies within MRO organisations and these include parts which are not available when needed and scheduling conflicts of mechanics vs work orders in the hangar,” says Henrik Wendelboe, chief sales officer at Airline Software Applications.

“Together with our MRO customers, we have identified several root causes leading to these inefficiencies. These include a weak link between Part M Continuing Airworthiness Management Organisations (CAMO) and Part 145 Approved Maintenance Organisations (AMO) in reserving the required parts for specific maintenance requirements.

“Another inefficiency concerns the fact that the inventory processes within MROs do not ensure that parts are only used for the correct work orders. Moreover, there is limited visibility into planning of the different work orders and tasks in Part 145 AMOs.”

There is a significant potential to automate and digitise the warehouse management processes in order to increase efficiency and reduce costs respectively.

“We are currently running nine different projects within our Digital Warehouse programme such as AutoStore, the automated storage rack system, and Agilox, the automated guided vehicle. To automate processes is one strategic focus.

“For example, many intra-company transports result in long walking distances for employees; this is not only a time consuming and labour intensive but it is also a costly process. Since AutoStore was implemented in 2015, we were able to increase the number of warehouse admissions and retrievals while reducing the required amount of warehouse space by more than 50 per cent” says Dr Kolbe.

“We have implemented several corrective actions in an effort to ensure our customers continual efforts for efficiency increases. Our SAM software solution for CAMO and MRO organisations includes several modules that ensure the close integration between Part M and Part 145 software solutions where parts can be reserved to specific tasks/work orders during the planning phase within CAMOs. This ensures that the parts are always available when the specific maintenance need to be performed,” says Wendelboe.

Aircraft parts, inventory

“The modules also allow an inventory control process automated with QR codes on parts labels, these ensure the correct picking of parts with consideration to the human factor. The integration with vertical storage solutions is also possible to limit the unauthorised access to parts and allow only picking from the inventory of parts required for the specific work order.

“Work order scheduling using a Gantt chart overview of workloads and space requirements ensures that the different tasks/work orders do not originate conflicts in space management or human resource deployment.”

Aircraft parts are known for their very high price, and the value of components hosted in one warehouse can range from thousands of euros a piece to more than one million.

Conversely, a grounded aircraft has huge economic and commercial consequences and the art of inventory optimisation lies in finding the correct balance between the cost of inventory and the cost of stock outs.

“Turnaround time (TAT) in the repair/logistics loops can still be improved, but a for a given TAT performance, what is the adequate inventory size? AFI KLM E&M decided to make the most of the opportunities provided by the available data and the recently unleashed processing power availability,” says Nicolas Kuhn, project manager at AFI KLM E&M.

“Big data and cloud computing have been used for almost two years in an innovative and powerful optimisation solution, in partnership with Lokad, a company that is expert in mathematics. Without disclosing the secret recipe, this solution enables us to better assess the risk and the return of every investment and divestment through advanced statistical forecasts.”

“The solution allows the automatic selection of the most appropriate statistical model for a given reference (with regard to its pattern) and the consideration of all scenarios and not only the median or average one. The solution can also be enriched with economic and operational drivers.

“We are really enthusiastic about the results achieved so far as, for example, we managed to reduce our rotable inventory by 5 per cent and save €1 million worth of cash expenditure on the expendables, while maintaining or improving the service level,” says Kuhn.

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