Across the board, companies and organisations within the aviation industry are feeling the effects of “brain drain” or more officially referred to as Human capital flight. If you’re unfamiliar with the term, it refers to the migration of talent either geographically, organisationally, or industrial due to factors such as better pay, better opportunities, cheaper cost of living, etc.
In the case of our industry, we were beginning to see the effect of skill shortages creep up on the industry going back long before the pandemic. We covered some of the issues in the article Why Are There Concerns About MRO Labour Capacity in Aviation back in 2019. However, the pandemic amplified this issue to be an unignorable problem.
The pandemic is largely behind us, but its effect on the global zeitgeist around how we view “work” is not. The skill shortage and brain drain are still an issue, however, the complexities of our industry have not. As a result, the challenges posed by limited manpower are causing airlines and MROs to seek new ways of streamlining their aviation supply chain while reducing the reliance on human resources. A secondary benefit would be that companies could also achieve significant cost savings, improve overall efficiency, and enhance their competitive edge.
Throughout this article, we will explore the strategies and solutions that could enable organizations to streamline their aviation supply chain with reduced manpower. By leveraging the insights from both Satair's expertise and the optimization of MRO supply chain practices, companies can achieve greater efficiency, reduced costs, and improved overall performance. By implementing these strategies, organizations in the aviation industry can position themselves for success in an increasingly competitive market while ensuring reliable and efficient operations.
What Does Streamlining Look Like?
By adopting strategic sourcing practices, organizations can carefully select suppliers based on value factors such as quality, delivery reliability, and price. Effective supplier management and diversification of the supplier base further enhance the efficiency of the supply chain. Alongside this, efficient inventory management ensures that the necessary parts and materials are readily available when needed, eliminating excessive stock levels or potential stockouts.
To address the manpower challenge, along with several other supply chain obstacles, we, and several of our peers, have emerged to provide comprehensive and customisable solutions. During our market research, and speaking from our pulpit, each provides tailored services that leverage the strengths of their organization, resulting in streamlined supply chain operations—all of which help address the manpower problem.
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Strategic Sourcing and Supplier Management
Material sourcing and management is a complicated process that requires a unique set of skills to do effectively and efficiently. By leaning on a supply chain solutions provider, you can effectively put the burden of those unique knowledge sets on a trusted partner—one that can engage in strategic sourcing and effective supplier management to streamline your operations without the demand for more skilled workers.
A consultant can help you select suppliers based on value factors such as quality, delivery reliability, and price. However, it should not just stop at supplier selection. Monitoring supplier performance, backing up for shortfalls and diversifying the supplier base are equally important aspects of supplier management, contributing to the overall efficiency of the supply chain.
Speaking of our methodologies, we select our suppliers based on value factors that have enabled us to establish partnerships with a diversified set of suppliers who offer the best combination of quality, timely delivery, reliability, and competitive pricing. This strategic approach ensures that the materials and services received align with our high standards and requirements.
Efficient Inventory Management
Efficient inventory management is of paramount importance to be competitive in the aviation industry, as it ensures seamless operations and cost-effectiveness. To achieve this, both airlines and MROs need to carefully manage their inventory levels, balancing the need for readily available parts with the avoidance of excessive stock or stockouts.
Of course, maintaining optimal inventory levels is the key to success. Too much and you’ve wasted capital on material that you’ll never use, and not enough and you risk delays in operations. From our perspective, two solutions are needed to optimise material management—effective inventory management software, and routine inventory audits.
Firstly, utilizing inventory management software and implementing just-in-time (JIT) systems allows organizations to have real-time visibility of their inventory, usage patterns, and supplier performance. This enables proactive inventory management, avoiding stockouts and reducing excess inventory.
Supporting that, regular inventory audits can allow companies to accurately assess their current stock levels, identify obsolete or slow-moving items, and allow for adjustments to their procurement and stocking strategies accordingly.
By implementing these strategies, organizations can streamline their inventory management processes, resulting in cost savings, improved efficiency, and reduced downtime. By working with a supply chain solutions provider, they can achieve all of these results without the need for a dedicated team of skilled staff.
Supplier Performance Management
Following up with an extension of the previous topics, supplier performance management is a crucial part of ensuring reliable operations and maintaining high customer satisfaction levels (if you’re an MRO).
Evaluating supplier performance against metrics such as on-time delivery, quality, and cost provides valuable insights into supplier effectiveness. By promptly identifying and addressing any performance issues, organizations can mitigate risks, minimize disruptions, and ensure that their inventory is stocked with the material that is needed, precisely when you need it.
Of course, there is a level of communication and collaboration with suppliers that plays a pivotal role in performance management, and those relationships often take time and resources to establish. However, if you are working with a supply chain solutions provider that manages its supplier performance, then you will surely feel the positive effects of more reliable operations with minimized disruptions.
Reduce Your TCO (Total Cost of Ownership)
Our last insight into streamlining your supply chain mitigates the need to address the previous points since the most effective way to deduce your overall cost of ownership is to find a strategic partner to handle most, or all, of your supply chain needs.
If you look at your supply chain regarding your TCO—acquisition cost, transport cost, operating cost, support cost, lifetime cost, and disposal cost—it becomes immediately clear what areas would see significant cost reduction when delegating the supply chain responsibility to a trusted service provider.
Parts acquisition becomes cheaper because fewer resources are used for sourcing and acquiring parts from several vendors. Operational costs like transportation are lessened because all parts are coming from one single source. Support costs are reduced by simply dealing with one single vendor. Parts' lifetime cost ideally becomes the responsibility of the trusted vendor by only supplying the parts you need when you need them. Disposal costs are reduced because, with a streamlined supply chain solution, there is a reduction in excess inventory or unused parts.
In the context of your supply chain, working with a supply chain solutions provider that understands your specific needs, has in-depth knowledge of your industry, and can offer value-added services that improve efficiency simply by removing many of the costs that are attached to an “in-house” supply chain, could have a significant impact on your business.
If You Made It This Far
By this point, we hope that we have been of some help in clarifying the options that you have available to you to help streamline your supply chain. Whether you’re feeling it directly or indirectly, there is an unavoidable fact that our industry is facing a notable manpower shortage—an issue that was present even before the pandemic but has since been significantly amplified. The topics outlined in this article—strategic sourcing and supplier management, efficient inventory management, supplier performance management, and a reduction in TCO—are by no means the end-all and be-all solutions. However, in our experience, they do provide a clear and direct path to reach a more streamlined supply chain while reducing your need for upscaling or upskilling your staff.