Presentation on theme: "American Airlines Supply Chain Key Parts Challenges"— Presentation transcript:
1 American Airlines Supply Chain Key Parts Challenges Cathy StukelMD Inventory Management & Distribution
2 Broad Maintenance Network American Airlines250 cities in 40 countries1,900 daily departures5 Fleets (Boeing MD80, B737, B757, B767, B777)620 AircraftMaintenance & Supply198 supply warehouse locations2 main supply bases (TUL, AFW), with 12 mini-warehouses8 Class 1 warehouses (DFW, JFK, LGA, MIA, ORD, STL, LAX, SFO), 25 sub-locations26 Class 2 warehousesScheduled MaintenanceAll stations: PS Checks40 stations: A Checks8 stations: engine replacements, interior checks, and B Checks2 maintenance bases (Tulsa, Alliance Ft. Worth): C ChecksUnscheduled maintenanceMaintenance at the gateOvernight maintenance of non-critical finds during the dayScheduled MaintenanceAll 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 Checksnarrowbody (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 ProfileAA stocks over 295,000 unique part numbers ($1.6B investment)Not all part numbers are stocked at all locationswe manage over 550,000 station-part#s (active in last 3 years)We use almost 32 million parts in a typical 12 month periodThere are two very unique types of parts managed:PartsParts usedProfile# of Unique% of AnnualPer Aircraft% of InventoryPart No.UsagePer dayInvestmentRotables6%1%167%Expendables94%99%14333%
4 Low, Sporadic DemandDemand for most spare parts is low and highly sporadicExpendables:Only 19% of part numbers have been used system-wide greater than 3 times during the proceeding 12 monthsOnly 2.3% are used consistently every month82% 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 monthsSimilarly, 67% of Rotable parts have been used system-wide 3 or fewer times in the last 12 monthsHits = # 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 levelSupply Chain needs to know where a specific aircraft (tail #) with a specific part need will terminate for overnight maintenance in order to send parts60% of terminating locations change from previous day plan20-30% of plans still change after 7 pm the day of planned maintenanceAircraft 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 ofParts chasing planesUnused part requestsThe 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 PriceConsistent Lead Time performance and reduced Lead Times where possiblePricing and lead time data using industry databases (i.e. Aeroxchange, ATA Spec 2000) minimum on an annual basisProvide continuing provisioning dataProvide 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 changesPro-actively manage exceptions impacting part availabilityElectronic Data Interchange – promise date change notificationAOG PO support within 4 hrsProvisioning 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 compliantPlace electronic POs for aircraft partsWork toward part scanning – which may drive labeling requirements for the supply baseProactive invoice exception management