Careful spares management drives down inventory costs

 - February 2, 2010 (All day)

Aircraft spares specialist AAR is offering a cost-effective parts inventory management program to relieve airlines’ cash flow headaches. “There’s no question airlines in this region are looking for ways to streamline their inventory cost structure,” said AAR’s vice president of sales for the Aviation Supply Chain Group in the Asia-Pacific region, Paul Richardson.

AAR endeavors to relieve airline customers from the burden of investing millions of dollars in inventory and management services, freeing capital for reallocation to their core business. The U.S. company estimates that as much as 50 percent of a carrier’s inventory can consist of unneeded surplus.

One U.S. regional airline helped had been carrying $90 million in inventory, but through this program AAR managed to identify unnecessary surplus and cut the airline’s inventory by $25 million. “If inventory management is done correctly, costs will go down and dispatch reliability will increase significantly,” said Richardson.

A comprehensive suite of information technology programs lay at the heart of AAR’s inventory management system, namely its proprietary supply chain management software (IMOPS), an airframe MRO labor tracking system (StAAR) and a transaction message broker to integrate the systems across the customer’s organization. 
 
New MRO Contract
Apart from offering inventory management and parts supply expertise, AAR operates its own major maintenance facilities in Hot Springs, Arkansas, Indianapolis, Oklahoma City and Miami. That side of the business continues to grow as well, as evidenced by a new two-year agreement AAR signed last month with Hawaiian Airlines to perform MRO services on the carrier’s Boeing 717s.

The contract calls for AAR to perform 10-year checks on 12 of Hawaiian’s 717s and to paint certain aircraft before they return to service. Hawaiian will ferry the airplanes from its Honolulu base to AAR’s full-service maintenance and modifications facility at Miami International Airport for the work. It has already performed landing gear repair services and short-term maintenance work for the airline.