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Aftermarket Tackles OEM Part Challenges | Aviation Week

28 Mar 2024

Airlines and MROs have struggled with supply chain disturbances that have increased OEM parts prices, delays, and shortages in recent years. Now, distributors and other stakeholders are experiencing multifaceted challenges while trying to resume a stable supply. How is the industry tackling these OEM part challenges?

In a recent article for Aviation Week, Keith Mwanalushi consults industry leaders about post-pandemic OEM part challenges, observing that although aftermarket demand has recovered since 2020, the material supply is still catching up.

 

The rapid downturn in demand during the pandemic led to excess material supply at all levels of the supply chain. As demand started to recover in late 2021 into 2022, OEMs, Tier 2 manufacturers and aftermarket suppliers depleted excess inventory levels before resuming parts manufacturing. 

 

This has led to delays in standard factory lead times – with lead times more than doubling in many cases. An effective inventory buffering strategy and predictive analytics capabilities in the distribution environment are therefore essential. 

 

Mwanalushi talks to AJW Group’s Strategic Asset Manager, Noelia Hernandez, to hear her perspective on these challenges.  

 

Hernandez points out that it's not only airlines and MROs who face these issues; parts distributors and flight-by-hour contract providers are also grappling with them. AJW Group is certainly not immune, she notes, however, the company has adapted its business strategy to deal with the impact. 

 

“The current market circumstances are driving greater regionality in MRO sourcing,” Hernandez observes. She says OEMs are sharing services across the globe to mitigate capacity constraints and are working with customers and logistics partners to understand existing supply chain vulnerabilities and how to overcome them. 

 

OEMs and suppliers face challenges in their performance environment, particularly in terms of shop processing time, along with increasing costs of raw materials and labour,” she notes. 

 

Hernandez then cautions that high pricing, delays, and shortages of OEM parts have the potential to disrupt operations and increase costs for all stakeholders. She shares that AJW is taking a proactive approach to tackling this, by collaborating with suppliers, using its size and scale to take advantage of purchasing power, and engaging in strategic purchasing. 

We are building our inventory pool ahead of any potential pricing reviews and mitigating the impact of shortages and price fluctuations,” Hernandez states. 

 

Additionally, AJW is in constant discussions with senior leaders to explore sustainable solutions to these supply chain challenges. Hernandez stresses the importance of finding long-term strategies to alleviate the pressure on price escalations and to ensure the aviation ecosystem functions smoothly. 

 

One such strategy is AJW’s sole distributorship agreement with Honeywell for Boeing 737 MAX air data inertial reference units (ADIRU), Airbus A320neo ADIRUs and a suite of Boeing 787 components.  

 

This has allowed it to develop in-house MRO capabilities at AJW Technique to help meet the demand for current production aircraft types that are being delivered with considerable backlogs. 

 

“Partnerships like these enable us to leverage our collective expertise and resources to navigate the supply chain constraints and ensure timely availability of critical components and parts,” Hernandez says. 

 

A deep understanding of the market is also vital, she explains. By having the expertise available to continuously monitor market trends and anticipate demand fluctuations, AJW can proactively adjust its inventory levels and allocation strategies, thereby enhancing its ability to support customers. 

 

Contact AJW Group today for world leading inventory and supply chain support.  

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