Bombardier opens high-tech ‘superwarehouse’ in Chicago

 - October 23, 2006, 7:14 AM

Last month Bombardier inaugurated its 238,000-sq-ft distribution center near Chicago O’Hare International Airport. The “superwarehouse,” located less than five miles from the airport, is managed in partnership with Caterpillar Logistics Services.

“The inauguration of the Bombardier Aerospace Logistics Distribution Center Chicago is the result of a significant investment in systems and infrastructure over the past 18 months,” Desmond Bell, vice president of parts logistics for Bombardier Aerospace, told AIN.

“Parts Logistics was created as a distinct unit of Bombardier in January last year to address shortcomings in service and parts support for both regional airline and business jet operators,” Bell said at the inauguration.

Parts continue to arrive daily from Bombardier’s manufacturing sites, former warehouses in Wichita and Detroit and from suppliers worldwide. According to Bell, the facility is currently shipping 500 lines of product a day and will ramp up to 1,500 when the warehouse becomes fully operational sometime in December. (A line is any number of parts going to a single customer in a single order.)

The facility will employ 200 full-time personnel (approximately 150 from Caterpillar and 50 from Bombardier), including several key employees previously located at the Wichita and Detroit facilities.

Inventory Management

“We are working closely with Bombardier to roll out an integrated worldwide supply chain, using our world-class people and processes, enabled by SAP systems,” said Mike Melie, vice president of Caterpillar Logistics, Americas division.

“Our inventory management systems are providing clear monthly and weekly forecasts that enable us to anticipate and prepare for both scheduled and unscheduled customer-service requirements for every Bombardier business and regional aircraft model anywhere in the world,” he added.

Caterpillar’s sophisticated systems include Tracks, which measures the flow of inbound parts processing every 15 minutes to determine whether there are any slowdowns related to processing, and an inventory mix analysis that adjusts the on-hand parts inventory based on demand simulations.

The latter ensures that Bombardier stocks sufficient quantities of critical high-use parts and purges obsolete parts from inventory to free up storage space and reduce costs. It has helped Bombardier improve its inventory accuracy from its historic level of 80 percent to 97 percent.

Reducing AOG Times

Bell explained the company’s AOG processing has benefited tremendously from the combination of Cat’s system, the relocation to Chicago and its use of Expeditors International of Washington for shipping. “We have reduced our AOG processing cycle–the time from receipt of the order to shipping–from six hours to less than two,” he said.

The company has slashed counter-to-counter delivery times in North America to fewer than eight hours, substantially better than the 24-hour industry standard. According to Bell, “All our North American shipping has dramatically benefited. Our same-day shipping rate has leapt to 99.9 percent on-time, up from 50 percent.”

The Chicago facility is organized with an eye toward efficiency. The parts are shelved according to the frequency with which they are requested. The parts used most frequently are located at a height that allows the average employee to access them with the least exertion. Rarely used parts are located on the high shelves, and a power order picker (similar to a fork lift) raises a worker to the necessary height to retrieve the part.

Caterpillar Logistics is responsible for parts receipt and receiving inspection, the shelving process, care/control/inventory accuracy of the more than 125,000 different part numbers, order picking, shipping, documentation, returns and rotables warehouse management.

Bombardier Parts Logistics maintains control of the facility and handles customer service, inventory planning, quality inspection, resolution of problems, supply chain management and transportation management.

Bell said Bombardier chose Chicago for its North American superwarehouse because it is the best location in the U.S. for rapid delivery. “O’Hare has the greatest number of direct flights and the broadest international coverage, and it offers attractive carrier pickup times,” he said.

The facility operates 24 hours a day, seven days a week, primarily covering the Americas and the Asia/Pacific region, and supplies Bombardier’s network of 39 service locations as well as individual operators.

The Chicago operation and a similar new facility in Frankfurt, Germany, form the nucleus of Bombardier’s significantly redesigned parts logistics network. The Frankfurt facility began shipping late last August principally to Europe, the Middle East, Africa and parts of Asia. The 50,000-sq-ft facility is located next to Frankfurt International Airport and has capacity for approximately 40,000 part numbers.

The Bombardier/Caterpillar Logistics Chicago and Frankfurt facilities join pre-existing Bombardier facilities in Montreal, China, Singapore and Sydney. Bombardier has opened a new spare parts depot in Dubai, the United Arab Emirates, and will open a facility in São Paulo, Brazil, next year.