With operators having gone through two years of hardship, falling margins and mounting losses, they must now maximise their revenue and margin as the sector recovers. Keith Mwanalushi from AviTrader MRO spoke to Barry Swift, SVP Operations at AJW Group, who says MRO solution providers who can provide high levels of availability and consistency will thrive; because like cash, repair delivery performance and materials availability is king.

 

Integrated supply chains

 

Swift indicates that the conflict of supply chain constraints and increasing delivery expectations, mean that solution providers must think ‘integrated supply chain’. “This involves working far closer with customers and supply chain partners, to understand the supply chain vulnerabilities that exist, and how to overcome them.”

 

The key area of growth or focus at AJW, is in ensuring that we can meet and exceed expectations, as operators start to return to pre-COVID flight levels.

 

Swifts says the needs of the operators to have full component availability at a time when the supply chain is heavily challenged, post-pandemic, initially looks like an undeliverable balancing act.

 

“It’s causing us to have to get our magnifying glass out and work with our suppliers in a far closer way than we may have done previously, for example not just understanding which components need to be carefully managed, but also really getting down to a level of detail in us understanding sub-component supply. Effectively we are at the forefront in managing one of the largest aviation volume ramp ups in history.”

 

Consequently, Swifts adds, AJW must leverage and work with the OEM partners closer than ever before – “If our partners have parts supply issues, then we collaborate and agree temporary alternate sources, whilst they get their inventories under control.”

 

Swift also reminds that the ability to shift geographical component repair supply, to meet the demands of the different regions is another balancing factor.

 

Partnerships are a win-win situation

 

It’s clear that the last two years of sector turmoil have changed the dynamic in the industry, encouraging closer strategic alliances between players like AJW and OEM partners, creating longer term strategic contractual relationships, and driving each to step up their game in terms of delivery performance.

 

Swift says suppliers in the next tier are also seeing a more simplistic approach to delivery performance expectations. In summary, the market will not and cannot endure sub-optimal delivery performance going forward- “So this is causing us to make strategic decisions about a simpler and far more nimbler supply chain, those supply chain partners that can deliver will thrive and those that cannot; despite our best joint supplier development efforts; will have to be deprioritised.”

 

We work in partnership with airlines, aircraft manufacturers and component OEMs to align and deliver highly effective and efficient aircraft supply chain solutions by optimising inventories, streamlining procurement and maximising efficiencies. Find out more here.

 

Read the full Component Management and Supply Chain article from AviTrader MRO here, which includes insight from AAR, APOC, GA Telesis, Kellstrom, SkySelect and software provider Swiss AviationSoftware.