It is time for E-commerce to change old school spares supply chain habits

Mar 5th, 2012

Aviation experts at Locatory.com note that a lot of modern airlines are still using the 20th century solutions for solving their spare part supply chain issues. But with the global aircraft fleet rapidly expanding airlines worldwide are to face significantly increasing MRO-related expenses. And for that reason air carriers should no longer proceed with ‘the old school’ methods and try to use innovative systems such as e-commerce for the substantial funds optimization.

According to TeamSAI, today global MRO market is valued at almost $47 bln. The market, triggered by the global aircraft fleet expansion, will continue to grow until it reaches approx. $69 bln. by 2021. ‘It may be a cheerful forecast for MROs, but, obviously, not for airlines, since MRO-related expenses,, come in the third position straight after fuel and operational costs when counting an air company’s overall expenses. Whether you need an engine or a landing gear overhaul, still it’s the availability of a spare part or a component which will affect the final invoice,’ says the CCO of Locatory.com Vytautas Vorobjovas. In the case of a certain spare component stock shortage, MRO companies undertake the search for the required part worldwide. Unfortunately, the process may take long hours, meaning extra time and money for an airline.

Nowadays a lot of MRO market players are still using emails ant telephones as their primary spare market monitoring tool. Contacting their small range of reliable agents and vendors, emailing neighbouring airlines, and then consolidating all the information retreated – all of this requires many hours and  considerably extensive human resources.

Nowadays a lot of MRO market players are still using emails ant telephones as their primary spare market monitoring tool

One of the ways to minimise downtimes is to adopt e-commerce solutions. There are several different types of e-commerce platforms: off-the-shelf, custom built, on site or on line. ‘Any company is free to choose the platform which suits its business model the best. But in any case, the idea of e-commerce is to broaden and automate your spares’ supply chain,’ comments the CCO of Locatory.com.

By applying different online-solutions as the basis of company’s spare part supply chain MRO market players may significantly shorten the search process: some companies using e-commerce manage to cut the time they spend searching for parts by as many as 8 hours.  Since e-commerce grants an access to surplus sales worldwide, gives wider price-selection opportunities and helps to optimize human resources, some air companies may see up to 15% fund savings in their next six-month report.

‘Airline industry should not avoid applying innovative business solutions! As concerns e-commerce, such projects usually do not require any significant changes in a company’s structure or processes. The majority of online-platforms are very user-friendly and do not require a team of sales managers. I believe that in the long-term e-commerce will become the most viable way to optimize both MRO-related and operational expenses,’ concludes Vytautas Vorobjovas.

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