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