KEEPING AN AIRLINER aloft to generate maximum profits calls for efficient management of a vast number of spare parts. Making sure there are enough pumps, tires, avionics gear, engines, cabin carpets, brackets and thousands of other aircraft supplies available for MRO is a major procurement challenge.

No wonder that maintenance and supply managers worry ceaselessly about whether there is a shortage of this or that bit of hardware at the right time and in the right place to keep aircraft flying.

In the future, however, the commodity that is likely to be in shortest supply in the aircraft MRO supply chain can't be stocked on a shelf. That commodity is not physical and it's not available in the form of metal sheets or molded composites. Its form is likely to be a printout or computer screen and its essence is: Information.

"The MRO rules are changing," Nordam Group VP-Engineering Jim Epperson tells Airline Procurement. For example, he has spoken of the need for a "paradigm shift" in the management of composite materials. "The past way of doing business will not allow the composite MRO industry to survive in the future," he says.

In terms of major structural components manufactured from composites, Boeing's new 787 Dreamliner won't have to undergo a full heavy check for 12 yearsabout twice the interval for conventional aircraft. "In that sense, we're into a new era regarding integrity and longevity with these composite structures," notes Tom Wilson, VP of Nordam's Repairs Group.

The first impression is that competency in composites will be less of an issue because of the inherent improvement in aircraft structures made from new materials. But the sheer increase in the volume of new aircraft will result in the need to boost expertise at the MRO level for composites used in the fuselage and wings. In addition, there are all the other "new materials" components that will need MRO attention.

Currently, the use of composites in the aerospace market is about $7.3 billion per year, with air transport accounting for almost half of the total, according to Kevin Michaels, a principal with the AeroStrategy consultancy. Within a decade, the total aerospace composites market could double to more than $14 billion and by 2026 it could reach $30 billion, Michaels says.

As newer aircraft go into service, current weaknesses in the MRO composites supply chain will only be exacerbated, according to the Nordam analysis. Some of those weaknesses include a wide variety of composite materials in the market and a lack of standardization, composite manufacturing techniques that limit flexibility in making repairs, industry reluctance to deviate from existing composite designs, stricter FAA oversight of "out of scope" repairs and a lack of communication between OEMs and MRO providers on design and load data. These issues will be important in the repair of composite-manufactured flight controls, doors, panels and secondary structures.

Michaels concurs. "The major structural issues regarding composites are down the road a bit because of the long-term D check. But there are still a lot of challenges regarding the way composites MRO will be handled for all the other components."

One example would be all-composite flaps or spars that become damaged or disjointed for some reason. "You have to go through the disassembly process with more exotic materials, you need to reassemble it and that might include the use of different kinds of fasteners due to composites. In addition, you'll need some different kinds of equipment on hand for composite repairs," says Wilson. Also necessary will be a cleaner work environment.


Perhaps the most critical factor will be the validation and substantiation tools used to demonstrate that the repair is done properly. That calls for obtaining information on stress and load factors as well as design criteria that are not always available to MRO organizations.

"A lot of times the OEMs talk to the airlines but it's hard for the MRO [shops] to get that original design data," Wilson says. The oddity is that airlines, wishing to control costs, increasingly turn to outsourcing the MRO work to independents but these independents will need much more information to makeand validatecomposite repairs properly.

The Nordam perspective as a front-line provider of parts and supplies in both the OEM and MRO markets is reinforced by a study conducted by Morris Cohen, a professor at the Wharton School of Business at the University of Pennsylvania and principal of his own Philadelphia-based consultancy, MCA Solutions Inc.

Cohen participated in a research project initiated by a large European airframe OEM that facilitated the sharing of parts consumption data from heavy maintenance checks from different MRO organizations and airline operators. The goal was to improve the performance of management systems for parts procurement and logistics for heavy checks. The major study, as well as several case studies of MRO providers, indicated that there is a lot of potential to reduce inventory investment and improve parts availability by adopting a coordinated, data-driven approach through the entire MRO supply chain.

Much of the study involved the assessment of wear and tear on various components to improve the predictability of repair or replacement activities. "The truth is, this is still an unpredictable business. Even with all the data we have, it's still an uncertain environment," Cohen says.

The situation that was studied is somewhat different from that of Nordam's managers, but the two are related. While Nordam's analysis dealt with actual physical repairs, Cohen's study involved a comprehensive look at the MRO process. His work focused on determining the life cycle of aircraft components in terms of both the OEM's prediction at the time of production and the actual operational experience encountered by an airline.

One way to reduce uncertainty and improve the flow of repair parts is through improved information. In the case of the European manufacturer, the OEM initiated a project to pool heavy check consumption data from all customers, both airlines and MRO shops. The data were collected and managed by the OEM and contained observed consumption rates for every part that was used in a check by any customer during a set timeframe. The consumption rates were dependent upon the check type, aircraft model, aircraft age and operational history. Estimates of part usage probabilities were based on a broader basis of experience.

"The accuracy of the usage probabilities based on the shared data is, of course, much higher than any estimates that an individual MRO could generate on its own," Cohen says.


As a result of analyzing the shared data, Cohen and his collaborators developed a system for stocking a parts inventory. Parts were ranked according to a cost-and-usage formula and were purchased according to the rankings. "These parts are to be purchased in advance of the scheduled check, before the aircraft enters the hangar," says Cohen. One result is that the number of "expedited" orders for partsessentially, quick-delivery spot orderscan be reduced significantly.

A practical application of the shared data system comes into play in the case of outsourcing repairs at facilities in low-wage locations such as Eastern Europe or Central America. Such a facility might have a well-stocked inventory but the cost in time of sending an airliner to the remote facility might offset any savings. And if the low-wage facility has only minimal parts on hand, the high cost of ordering a part on an "expedited" basis easily can compromise any cost savings resulting from using a low-labor-cost facility. On the other hand, using a facility in a high-wage area such as Western Europe or North America might facilitate the expedited ordering process because the facility is closer to the parts maker, but that has to be weighed against higher labor costs.

Whatever decision is made on MRO location choices and related parts availability, the best decisions only will be made with better information, Cohen contends. He advocates a greater degree of pooling of repair and maintenance information among all players in the air transport sector. "Managers of the service supply chain could derive additional benefits from the data pooling and improved [estimating] methods by optimizing parts management across the entire MRO parts supply chain that includes the airlines, the OEMs, the suppliers and the MROs," he adds.

Citing information from AeroStrategy, Cohen notes that efforts in the last decade have resulted in a reduction of the inventory held throughout the MRO supply chain from $3.6 million to $2.6 million per active aircraft. The total value in the supply chain, however, is still $44 billion. "Thus there is a lot of room for improvement. Given the restructuring that is occurring throughout the MRO market, we believe that ongoing efforts to reduce inventory and to improve service will require a higher level of supply chain coordination."

Adds Michaels, "Airlines that outsource their maintenance activity are now seeking cost transparency in their maintenance contracts. They want to see exactly how their suppliers are serving their interests and managing costs."


If improved information systems will play an increasingly important role in MRO activities, then Boeing potentially has come up with a marketable MRO service it calls "Gold Care." The service will debut with the first deliveries of 787s next year. "The 787 will be a data rich airplane," Bob Avery, VP-services and support for the Dreamliner, tells this magazine.

The new aircraft will feature many more onboard sensors and performance feedback devices than any other of the company's models and as such it will provide enhanced operational information about the life cycle of components. Boeing has placed itself as an information warehouse to gather and retain data provided through these onboard feedback mechanisms as well as reports from pilots and airlines. Once it has the information, it claims it can help carriers schedule repairs and replacements on a more efficient basis than current MRO applications. It will be able to send out advisories to help with maintenance scheduling and assist in ordering and delivering parts at the right time and to the right place. "What we'll be capable of is taking a lot of the cost and complexity out of the MRO process," says Avery.

Airlines will be able to tap into the Boeing database on a real-time basis to keep track of the performance and operational information they will need for MRO activities. "One thing we'll be able to offer," says Avery, "is that we'll have a bigger universe of data. We'll be able to gather information on a whole class of aircraft worldwide, rather than just the experience of one plane or one airline." The result will be a broader basis on which to calculate and predict the need for repairing or replacing parts. "We'll also have product information from the OEMs and we'll be able to share operating information with them as well," he says. One advantage of the information sharing process is that OEMs will be able to predict more accurately how much inventory they will need to have on hand to serve the aftermarket.

Boeing plans to offer the Gold Care plan at different levels and even will offer a full-scale MRO program by contracting with MRO providers around the world to physically conduct the repair and maintenance work. Alternatively, carriers can do the work themselves but use the Gold Care database to assist with scheduling and support services. By early spring, the company had orders for 567 787s. While it had not at that point generated a Gold Care customer, Avery reported that "we've got a lot of inquiries and interest and we're talking to people."