WHILE THE TREND toward increased outsourcing of maintenance, repair and overhaul activities is undeniable and proving to be an effective strategy for many airlines, there is a significant challenge to the growth of the trend, according to experts who spoke to Airline Procurement. That challenge relates to the inherent confusion and disjointed systems that exist in most MRO organizations.
"This industry is still underserved when it comes to enabling technology," explains Richard Bergmann, a partner in Accenture's aerospace and defense supply chain strategy practice in Atlanta. "In MRO, for example, there are still a lot of paper-driven activities. A lot of information is handed out on clipboards." According to Bergmann, there need to be systems available to maximize productivity in this very complex activity.
Accenture currently is working to help clients integrate MRO and ERP technology, materials management and supply chain technology to create a much more streamlined information flow. "Applications and architectures have improved, and there is now interoperability among the various solutions, which is important," he adds. The company is also an advocate for advances that will allow MRO technicians to be more productive. These include handheld computers, mobile technology and wireless technology.
Another challenge is the nature of much of the activity. "In a production line, you can forecast demand in a fairly steady way over the course of one or more years," explains Exostar VP-Marketing and Corporate Development Peter Scott. Aftermarket demand is much more volatile. It requires a much more flexible supply chain to react cost-effectively so that no one is required to hold onto large quantities of expensive inventory.
Exostar is planning to penetrate the airline industry in 2008, targeting performance-based logistics as well as MRO activity. "Our plans to move into MRO are a natural progression of working with the manufacturing supply chain," Scott says. "You need near-real-time visibility and control in order to meet customer needs." To this end, it has created an infrastructure for the commercial supply chain. It now is planning to offer this to manufacturers as they continue to build out their support for customers in the area of MRO parts and equipment.
The need for coordination also is identified as an issue by Morris Cohen, president of Philadelphia-based MCA Solutions, which provides decision-support software that addresses the material management issues relevant to MRO as well as service support in general.
FOCUS ON UNSCHEDULED MRO
As he assesses the situation, Cohen finds that there seems to be a fragmented approach to solving the MRO problem for scheduled maintenance. To date, airlines have focused most of their attention on making the unscheduled maintenance process as efficient as possible. "With scheduled maintenance, however, airlines and MRO providers tend to use different software and different systems to manage MRO, to determine what activities are going to be scheduled and where and when the work will be done," he states. Still another system looks at whether the right materials are available or pre-positioned on an expedite basis. "I think there will be a push for more integration across the different processes and systems involved in delivering scheduled MRO services in a cost-effective way," he continues.
Exostar, too, is involved in initiatives to help coordinate what have tended to be disparate scheduled MRO activities. "One challenge in the airline industry has been to create an information system to keep track of a particular component or part throughout its lifecycle," Scott points out. "For example, a part might be serviced in Singapore last year, in a shop in North America this year and actually end up on a different airplane tail number."
As MRO outsourcing support activities become more specialized and complex, he believes it will become important to maintain the integrity of the information on each part throughout its life. Examples of issues to be addressed: Who owns the data? How do you ensure a high level of trust in terms of who signed off on the type of work that was done? "And there will be a huge volume of this data to manage," he cautions. To assist in this area, Exostar plans to begin playing a role in addressing ways to coordinate this information in the future.
Still another company offering solutions to simplify MRO complexity and disparity is Servigistics of Atlanta, Ga., which provides decision support tools for the parts and service side of airline MRO, including labor and forecasting/planning of parts and labor. It also tracks and analyzes performance across the entire service operation using a newly developed Command Center.
"Most airlines are bouncing between eight and twelve different systems to get information for unscheduled maintenance activity," explains Bob Schroeder, solutions engineer. This includes where the aircraft are, when they are scheduled to arrive, how to pre-position materials, whether manpower resources are available and so on. "When you talk about scheduled MRO, which can last three to fourteen days, we leverage similar information," adds Mike Landry, founder and CTO. Required information here includes which aircraft are coming in, which maintenance actions should be taken relative to the current workload, how to best deploy resources and material against the existing workload, etc.
The final component of support for MRO activity being offered by Servigistics involves OEM support of the product. "We are currently working with two OEM providers to help them identify ways that they can be seen in the market as more responsive to their customers' needs," continues Landry.
In sum, only when processes are systematized and coordinated appropriately will the full benefits of MRO outsourcing be realized.