ERP integration: a holistic answer to aviation’s needs
Given the numbers of aircraft in service today, MRO has evolved to become a major market differentiator within aviation. Visiongain predicts that the value of the commercial aircraft MRO market in will top $80 billion in a decade. However, it also expects the market to face many new challenges, including those stemming from some OEMs (e.g. Boeing) looking to increase their market share. As a result, traditional third party MRO providers and airlines will need to adapt to this changing market in order to remain competitive.
From the advent of new manufacturing materials to ever more complex engines and new entertainment systems, commercial aviation is changing dramatically. Naturally, these changes also affect the MRO providers and component repair shops, as well as OEMs, especially cost-wise. As a result, The Wall Street Journal recently revealed that, in many cases, 99% of the revenue received per flight by airlines is needed simply to break even on the high costs incurred in operation and maintenance.
Naturally, organizations in the field are increasingly focusing on advanced enterprise support systems to manage, track and optimize relevant MRO processes. In fact, up to 39% of airlines across the globe are planning to replace their ERP systems, while about 58% are expecting to enhance them over the next 5 years, AWIN reports.
“Whether it’s composite materials, complex avionics or new engines – each new technology introduced into aviation brings with it widely different MRO demands. Naturally, the need for supporting IT solutions and specialty training to enable such organizations to perform and manage complex repairs also increases in importance ” says Zilvinas Sadauskas, the CEO of Locatory.com. “As a result, with market demands and technology rapidly changing, any MRO solution is increasingly required to be equally agile and adopting specialized industry functionality within a full ERP business supporting capability.”
Currently delays and data transfers cost the airline industry around $5 billion annually. For instance, an average wide-body aircraft generates around 8 000 sheets of paper from MRO activity annually. In the mean time, the cost of paper, including its distribution, faxing, shipping and storage accounts to approximately $5 000 per aircraft per year. Not to mention the headache for engineers filling out known data on paper forms, labour productivity, aircraft cycle time and the duplication of effort between paper and IT systems.
Meanwhile, according to Zilvinas Sadauskas, by ensuring a more holistic approach to MRO operations, it’s possible to achieve increased value from IT investments. This is especially important for those airlines and organizations managing multiple fleets of aircraft, aircraft types, and engine types. For instance, Emirates chose a holistic solution to manage its new 90 000 sq. m. engine overhaul facility in Dubai. In addition, it also delivers Corporate Performance Management to ensure strategy is driven into business operations. Such support systems enable communicating information between business, maintenance, operations and supply chain more quickly and efficiently. In the meantime, statistical data indicates that if operators can reduce their maintenance costs by as little as 10%, they could double their profits.
“Third party MRO providers can also benefit from such an approach, as it provides them with better access to vital information, improving safety and efficiency. Add to this the development of wearable technology, context aware solutions and predictive analytics, and we could see significant reductions in complexity and workload for civil aviation MRO operators. Organizations that embrace the technology now will see just how smart and agile their services become,” concludes Zilvinas Sadauskas, the CEO of Locatory.com.