Determining the optimal stock levels for Inventoy in any Airlines / Aircraft operator or MRO is not an art but its a science. For most companies, it is generally an impossible numbers game.
Inventory managers are often faced with the challenge of maintaining tens of thousands of items, each with their own features, requiring intricate and time-consuming calculations. Without an organized methodology and robust analytical tools, the proactive management of huge inventories becomes an improbable job, resulting in fast increasing inventory levels combined with serious shortages of spare parts.
Aviation MRO inventory generally includes:
- All maintenance spares stocked to supply unplanned breakdowns and scheduled maintenance.
- The consumables needed to keep the maintenance processes running.
- Spares stocked by OEMs (original equipment manufacturers) to service the equipment you’ve purchased from them.
Today, Aviation MRO Organizations without an optimized aviation inventory run the risk of over-paid and under-performing assets.
In order to avoid pricy shortages, inventory managers of an MRO often choose to work with caution when it comes to determining stock levels. But that strategy has its cons in terms of costs. Inventory consumes space, may get damaged, and sometimes can become obsolete – that carries surplus inventory costs on an organization. Over the time, massive amount of unused/obsolete inventory translates into waste and loss.
Optimizing inventory means finding the seamless balance between demand and supply. The two important aspects that dominate inventory optimization are risk and ROI. In simple term, Inventory optimization is helpful to maximize return at a given risk level, or to minimize risk for a given anticipated return.
Optimized inventory maintains a level of spares inventory that virtually eliminates out-of-stock conditions while improving efficiency and cutting inventory costs.
Any organization that carries aviation spares inventory can benefit from realizing optimization practices and principles. Optimized spares inventory suggests that an MRO organization is putting its inventory investment where it should & when it should, without incurring unhindered future risks.
An optimized inventory forms a continuous enhancement loop that produces tangible, sustainable results over the period of time – driving asset performance, competitive benefit and positive bottom-line results.
To achieve the business objectives discussed in this article, companies need an approach that supports unique management requirements of Aviation MRO Inventory, where few requesites to be considered are:
- High criticality
- Longer lead time
- High price
- Infrequent and highly variable usage
- Low data quality
Make No Mistake ! – achieving and maintaining optimized inventory is complicated and challenging. But, at the same time it is transformative.
That’s why best in class MRO organizations take it on – the benefits include, business transformation, increased service and safety levels, declines in inventory hold-in and stock-out risk, far outweigh the costs.
With the precise tools and technology supported by the right aviation Inventory processes and best practices, successful organizations are making the said transformation and reaping substantial rewards.
Inventory Optimization Technology
Inventory optimization involves frequently obtained data points and the measurements involving these data points in real time, would help in creating an optimized inventory.
An intelligent decision support system that incorporates best practices, gives inventory managers a robust tool to manage their business objectives and make their teams significantly more productive.
By leveraging latest technology tools, automated processes and best practices in Inventory optimization; an asset-intensive organization can consistently produce results like these:
- 10-20% reduction in funds invested in safety stock
- 8-20% decrease in write-offs of surplus and obsolete stock
- 15-22% fewer stock-outs, for improved availability and productivity
- 10-20% drop in administrative costs for replenishing inventory
- 30-60% less resource time spent managing inventory
To realize these benefits BytzSoft has designed a software tool FlyPal, which effectively helps in keeping your Inventory optimized at all times. FlyPal Inventory module is been instrumental in successful inventory optimization for our 30+ customers.
Enquire about our Aviation Inventory & Stores Management Software here