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American Airlines Supply Chain Key Parts Challenges

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Presentation on theme: "American Airlines Supply Chain Key Parts Challenges"— Presentation transcript:

1 American Airlines Supply Chain Key Parts Challenges
Cathy Stukel MD Inventory Management & Distribution

2 Broad Maintenance Network
American Airlines 250 cities in 40 countries 1,900 daily departures 5 Fleets (Boeing MD80, B737, B757, B767, B777) 620 Aircraft Maintenance & Supply 198 supply warehouse locations 2 main supply bases (TUL, AFW), with 12 mini-warehouses 8 Class 1 warehouses (DFW, JFK, LGA, MIA, ORD, STL, LAX, SFO), 25 sub-locations 26 Class 2 warehouses Scheduled Maintenance All stations: PS Checks 40 stations: A Checks 8 stations: engine replacements, interior checks, and B Checks 2 maintenance bases (Tulsa, Alliance Ft. Worth): C Checks Unscheduled maintenance Maintenance at the gate Overnight maintenance of non-critical finds during the day Scheduled Maintenance All stations: PS Checks (every 2 -3 days, average 2 man-hours) 40 stations: A Checks (every 7-9 days, average 10 – 20 man-hours) 8 stations: engine replacements, interior checks, and B Checks (every 2 months , avg 100 man-hours for narrowbody A/C, avg man-hours for widebody A/C (those with two aisles) 2 maintenance bases (Tulsa, Alliance Ft. Worth): C Checks narrowbody (every months, Light C, avg 2,100 man-hours, 3 days; every 4th Light C becomes eavy C, avg 20,000 – 30,000 man-hours, 3-5 weeks), widebody are all heavy C checks, every months, 10,000 man-hours, 2-4 weeks)

3 Parts Profile AA stocks over 295,000 unique part numbers ($1.6B investment) Not all part numbers are stocked at all locations we manage over 550,000 station-part#s (active in last 3 years) We use almost 32 million parts in a typical 12 month period There are two very unique types of parts managed: Parts Parts used Profile # of Unique % of Annual Per Aircraft % of Inventory Part No. Usage Per day Investment Rotables 6% 1% 1 67% Expendables 94% 99% 143 33%

4 Low, Sporadic Demand Demand for most spare parts is low and highly sporadic Expendables: Only 19% of part numbers have been used system-wide greater than 3 times during the proceeding 12 months Only 2.3% are used consistently every month 82% of airline parts-related delays and cancellations attributed to Expendable parts, are for parts with Zero prior usage at that station in the prior 12 months Similarly, 67% of Rotable parts have been used system-wide 3 or fewer times in the last 12 months Hits = # of times a part was issued to a mechanic (not the quantity issued)

5 Changes to Aircraft Routing
Aircraft routing changes substantially, creating a short planning horizon at a specific aircraft/part level Supply Chain needs to know where a specific aircraft (tail #) with a specific part need will terminate for overnight maintenance in order to send parts 60% of terminating locations change from previous day plan 20-30% of plans still change after 7 pm the day of planned maintenance Aircraft are not currently routed/re-routed to locations based on part(s) availability as a standard practice so parts must be/or go-to where plane is, causing a high number of Parts chasing planes Unused part requests The above causes inventory to be more decentralized, more “insurance” parts to be carried and increases inventory costs

6 Supply Chain - Supplier Support
Better alignment of Supplier Support with AA Supply Chain goals: Consistently provide the Right Part, at the Right Place, at Right Time, and at Right Price Consistent Lead Time performance and reduced Lead Times where possible Pricing and lead time data using industry databases (i.e. Aeroxchange, ATA Spec 2000) minimum on an annual basis Provide continuing provisioning data Provide accurate and timely end-to-end visibility of part location and key status information to our customers (Mechanics) Electronic Data Interchange – PO & RO order confirmation, shipment notification, supplier generated order changes Pro-actively manage exceptions impacting part availability Electronic Data Interchange – promise date change notification AOG PO support within 4 hrs Provisioning data: revision changes driving requirements for different repair components so we can proactively drive requirements for these new sub-components not just the higher assembly.

7 American’s Supply Chain Efforts
In order to improve interactions with the supply base: Provide forecast information to suppliers who are EDI compliant Place electronic POs for aircraft parts Work toward part scanning – which may drive labeling requirements for the supply base Proactive invoice exception management

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