Overcome MRO Supply Chain Challenges in Aviation

The Rising Tide of MRO Demand

The aging global commercial aircraft fleet directly impacts MRO. Older planes require more frequent and thorough maintenance. The average age of passenger jets is increasing, a trend supported by data from the International Air Transport Association (IATA), which tracks fleet age as part of industry analysis (IATA Chart of the Week). This necessitates more frequent inspections, shop visits, a larger and more diverse inventory of spare parts, and puts pressure on turnaround times (TAT). MROs face the challenge of more planes needing more maintenance, and airlines demanding faster turnaround.

The MRO Supply Chain Challenges

The MRO supply chain presents several key challenges:

• Inaccurate demand forecasting: Predicting the demand for specific parts and maintenance is difficult due to the unpredictable nature of aircraft maintenance.
• Supplier capacity constraints: Suppliers may struggle to meet the rising demand for parts, causing delays and shortages.
• Parts availability and visibility: MROs require real-time visibility into parts availability, condition, and location to avoid delays, inefficiencies, and safety risks.
• Counterfeit parts: Suspected Unauthorized Parts (SUPs) pose a significant threat to safety and reliability.
• Supplier risk: Supplier instability due to financial, political, or natural events can disrupt the supply chain.

Solution 1: Smarter MRO Demand Forecasting

Technology is improving demand forecasting. Advanced techniques, powered by artificial intelligence (AI) and machine learning (ML), enable more accurate predictions.

• Predictive analytics: AI/ML algorithms analyze data, including past maintenance records, aircraft utilization, flight schedules, and weather patterns, to identify trends and predict future needs. This improves upon traditional forecasting methods.
• Optimizing resource allocation: Accurate forecasts allow MROs to optimize slot management, manpower allocation, and parts supply, reducing stockouts and downtime.

Solution 2: Better Planning with Suppliers

Strong supplier relationships are essential in the MRO supply chain. MROs rely on suppliers for timely delivery of the right parts at the right price, at the right time, and at the right location. Effective supplier capacity planning is crucial, involving:

• Sharing the forecast: MROs should share demand forecasts with suppliers to enable them to optimize production, secure capacity, and reduce lead times.
• Collaborative planning: This requires open communication, joint planning, and shared goals. Industry reports, such as those by Oliver Wyman, provide insights into supplier collaboration in the MRO sector (Oliver Wyman MRO Survey).

Solution 3: Detailed Parts Availability Data

MROs need the right part at the right time, with detailed information on its condition and history. This requires:

• Granular details: Access to part condition, remaining life, serial numbers, and Beyond Economical Repair (BER) thresholds.
• Real-time visibility: Data must be readily accessible for quick identification of needed parts and their location.
• Blockchain for transparency: Technologies like blockchain can enhance parts traceability and authenticity within the MRO supply chain by providing a secure and transparent record of a part's lifecycle. Oliver Wyman highlights blockchain's potential to improve transparency and reduce counterfeit parts.(Oliver Wyman MRO Report).

Solution 4: Traceability and Authenticity

• Industry-wide collaboration: Airlines, MROs, OEMs, and regulatory agencies must collaborate to share information about SUPs and develop prevention strategies.
• Enhanced traceability: Technologies like blockchain can improve parts traceability by creating an immutable record of a part's history, verifying authenticity and preventing counterfeit parts.
• Rigorous quality control: MROs must implement strict quality control procedures to inspect parts and verify their authenticity.

Solution 5: Supplier Risk Assessment

The MRO supply chain is vulnerable to various risks, necessitating a proactive approach to mitigation. Supplier risk assessment is crucial, involving:

• Identifying potential risks: Evaluation of suppliers based on financial stability, geopolitical factors, historical lead times, regulatory compliance, and cybersecurity posture.
• Strategic sourcing and tactical procurement: Risk assessment should inform both long-term supplier partnerships and short-term purchasing decisions.
• Building resilience: MROs can build a more resilient supply chain by carefully assessing supplier risks, diversifying their supplier base, developing contingency plans, and investing in risk management tools. The International Air Transport Association (IATA) offers publications on broader supply chain risk management in the aerospace industry (IATA Website).

Key Takeaways

The aviation MRO industry is at a turning point. The challenges posed by the aging aircraft fleet and increasing demand necessitate a fundamental shift in MRO supply chain management.

• Technology is essential: Advanced technologies like AI, ML, and blockchain are crucial.
• Collaboration is a must: MROs, airlines, suppliers, and regulatory agencies must collaborate.
• Data is crucial: Access to accurate and timely data is essential.
• Proactive approach: MROs need to anticipate and mitigate challenges.

By embracing these principles, the aviation MRO industry can overcome current challenges and build a more resilient, efficient, and safe future.