Aftermarket: TRAVERSING THE MAZE: Mx COST CONTROL

The complexity of maintenance scheduling, inventory control and workflow optimization can create a querulous path for MROs, unless maintenance planners, engineers and technicians all use the best tools to provide efficient, cost-effective and quality service.

Long before today’s fancy at-home game consoles, there were the bulky video cabinets in the local arcade featuring Pac-Man (distributed in the U.S. by Midway). In this game, the moving Pac-Man target gobbles up points as it runs a maze, always just ahead of ambush by villainous stalkers. Controlling maintenance costs and more importantly, reducing them, is no game. However, the path toward MRO cost savings is indeed a moving target within a complex maze of maintenance activity such as:

• Inventory management of components for diverse fleets in global facilities;

• The need for enhanced workflow efficiency while also handling unscheduled maintenance tasks; and

• Validating procedures requirements and maintaining regulatory compliance.

The ambush of part supply outages, long lead time to obtain or ship parts, insufficient staff to track and ensure regulatory compliance, unscheduled maintenance events and the competitive nature of meeting customer demand for quality service and ever reduced aircraft turn time can definitely begin to feel like villains are stalking bottom-line profits. Making it through the maze means focusing on individual parts, systems for complete maintenance task visibility, and new products and installation techniques (see sidebars pages 8 and 14).

Parts Aren’t Only Parts

A key means for controlling and reducing maintenance costs comes through the FAA’s Parts Manufacturer Approval (PMA) process. This process allows private vendors to reverse engineer OEM parts and sell them at a significant discount. Estimates for the 2006 market for PMA parts globally reach $38 billion, with engine components alone at $200 million. By 2015, growth could fall within the range of $55 to $60 billion.

Obviously OEMs have some resistance to PMA parts relative to ultimate liability and recouping their own original part R&D costs. There also remain some myths about PMA parts (such as less stringent production processes or even counterfeiting), whether in expendables or air worthiness rated parts. However, the FAA essentially sees the parts as the same if the PMA holder meets the stringent design, production and testing process, which can take a year or more and cost from $15,000 to $300,000.

Many airlines have already disproved the myths by accepting PMA parts as equal to or better than OEM parts. Nathan Dalton, vice president for Corporate Business Development for the Wencor Group, tells AM that just one of Wencor’s airline customers should save $3.2 million this year by using PMA parts. He points out that "OEMs rarely have interest in solving problems in legacy programs," so Wencor includes many product improvements within its PMA parts for those aircraft, offering about 5,000 line items. "Our customers expect to save between 30 percent and 50 percent off what they normally pay for OEM parts."

Robb Baumann, president of the nine-unit Parts Group for HEICO Aerospace, reports that his group has saved airline customers $700 million through PMA parts since 1972. The group ships 2.7 million PMA parts annually. One particular customer is reaping $20 million a year in direct savings. In Baumann’s view, "In any industry, there is an alternative parts market to offer consumers a choice." He also believes, "Parts are more than just parts. They offer efficiency and bottom-line leverage through warranty terms, maintenance support, and long-term, sustainable cost savings. On every PMA part we make, we utilize an in-house material science staff and on a majority of our parts, we use a finite element analysis model. Our testing and computation process allows us to consider more than a part’s geometry, but also what forces may affect this part and what forces from this part may affect other parts. We ultimately create a more robust design, can offer better technical support for the product, enhance an aircraft’s repairability and lifetime, and also provide potential for new products."

PMA parts can offer obvious and immediate cost reductions, therefore, some third-party MROs are gearing up to offer PMA capability in-house. This puts another player in the PMA game. In response, OEMs are attaching "power by the hour" and total care type programs as part of an aircraft customer’s purchase package. Such programs assure fixed maintenance costs over an extended period of time or on shorter contracts based on customer requirements.

Savings in the Nuts and Bolts

It makes perfect sense that the performance of a thrust reverser would affect a plane’s air worthiness, but it’s hard to imagine a problematic lavatory door louver delaying takeoff. In fact, it’s just such small parts that are sometimes ignored within the PMA equation for reducing maintenance costs. HEICO’s Baumann states, "We make many PMA nuts, bolts, shims and washers that could save operators hundreds of dollars a year on simple individual parts. We also have customers who save $100,000 per shop visit using a mix of the simpler parts and a few more complex parts."

Enigma’s 3C gets technicians involved in the decision process with an infrastructure that optimizes the maintenance workflow to avoid delays.

John Droege, vice president of marketing at Growth Industries, recounts that 90 percent of his company’s revenues come from the production and sale of PMA parts exclusively for commercial airlines and MROs. Growth Industries has 3,000 parts in stock and creates 200-plus new PMA parts a year. The company is known for its PMA landing gear parts, but Droege says "We make high-consumption, low-cost PMA bushings, sleeves, washers and bolts for aircraft as well." One example he cites is a series of washers for the B-747 flap track carriage; his company’s parts price is 50 percent lower than the OEM’s. He also describes a $2 OEM part on a lavatory cabinet that requires disassembly and replacement if the part breaks. He estimates that would take four hours with the plane grounded during that time, and labor would run about $45 an hour. Growth Industries makes a PMA part that can be installed in about 45 seconds on the cabinet, and even allows for the old part to stay in place. The part directly affects aircraft turn time and is inexpensive but high volume.

At Jet Parts Engineering, a key element of controlling maintenance costs for customers comes through providing sufficient inventory stock levels with PMA parts. According to Anu Goel, president, 70 percent of the company’s customer base is operators and 30 percent is third-party MRO shops and part brokers. "MROs like PMAs for stock availability as well as price. That way their customers don’t have to hold or manage spares and can achieve faster turn times." Goel’s company primarily makes engine component PMA parts, but adds, "By focusing on part families [a cluster of related or similar parts] instead of just a few parts within an assembly, we provide our customers a total parts solution for component repair. This translates to efficiencies in their cost and inventory management. Additionally, this part family approach involves our engineers with engine components at a level where they can offer prescriptions to improve part and component reliability."

Consignment Inventory

Inventory control boils down to answering these questions: how many of what parts are where; when will they be needed for a multi-aircraft fleet on differing maintenance schedules; and what are the best logistics for getting the right parts to the maintenance bay on time? Larger, independent MROs definitely have more capital available to own six months of spares or more for multiple aircraft, and can balance the return on investment for that inventory. However, a trend gaining ground to answer inventory volume and logistics issues is spares on consignment, whether PMA or OEM parts. Independent MROs, PMA parts makers, and distributors and operators large and small are selecting this option. Essentially, PMA suppliers and MROs hold customer inventory on their own shelves or provide them on-site at a customer’s location, but only charge for the parts when they are used.

Parts logistics are always a challenge.

Growth Industries’ Droege states, "Consignment PMA inventory has increased our sales significantly. For our airline and MRO customers, carrying inventory on their shelves represents approximately 25 percent to 27 percent more than the parts’ original value. We keep about three months of inventory on our customers’ shelves. When needed, consignment customers have been willing to assist us with other customers should we encounter temporary low inventory for certain parts." Jet Parts Engineering’s Goel reports creating PMA parts as consigned spares on a customer-specific basis. "Customers know they have stock on hand and don’t have to pay for it [until it’s used], which allows them better planning and turn time. The biggest issue is the logistics, and we work with them to minimize that." Wencor’s WenStock Continuous Replenishment process transfers inventory assets to the supplier, saving them inventory investment. At a major repair agency, Wencors’ Dalton reports that fill rates have been improved by using WenStock, and staffing levels can be forecasted to coincide with business growth.

It should be noted that not all countries certify planes to fly with anything but OEM parts, which has to be considered for fleets on international routes. Also, a manufacturing rule change currently under consideration by the FAA could affect PMA part suppliers. According to the December 2006 PAMA Direct newsletter, the FAA is proposing changes to its certification procedures and identification requirements for aeronautical products and parts. All new parts would require airworthiness approvals (8130-3 tags). According to the newsletter, the FAA’s intent is to standardize requirements for production approval holders and to ultimately promote safety. However, new provisions may contain prohibition on alterations to PMA parts as well as definitions of commercial parts and standard parts that may affect maintenance activities.

The IT Toolbox

One way to secure more wins at Pac-Man would be the ability to see all the options that could be taken by both the moving Pac-Man target and the stalkers throughout the maze. This would make all key elements of the game simultaneously visible. Likewise, information technology (IT) in the form of software systems can provide a complete view of maintenance requirements with visibility to key elements such as aircraft scheduling, inventory management and parts tracking, maintenance-related regulatory requirements, and workforce productivity.

Since responding to unforeseen situations can make all the difference in the bottom line, IT tools are important to a company’s maintenance engineers and planners. However, it turns out that software tools are just as important to aircraft maintenance technicians (AMTs) as the hardware tools they use in performing maintenance and repair on the flight line or in the depot. Enigma, Inc. has designed the Enigma 3C software to provide the most current and relevant technical support information to AMTs at the time they need it. John Snow, Enigma’s vice president of Marketing and Business Development, explains that Enigma 3C, "Gets the person who turns the wrench into the decision process with an infrastructure that optimizes the maintenance workflow to avoid delays. An AMT uses a single sign-on, enters a tail number and a fault code. The system automatically retrieves data relevant to specific tasks, presenting a streamlined process for performing repairs."

The Engima software can also automatically generate a task or job card, and give AMTs immediate access to an aircraft’s operating history. For unscheduled maintenance, Snow says, "A technician can identify a problem and build a job card on-the-fly, requesting that maintenance engineering list it as a required task, even as the problem may be solved on the spot. This rapid response is possible only with proactive maintenance content in the software system."

When combined with IBM’s Technical Document Management and Delivery System or Oracle’s Complex MRO System (or similar programs from other Enigma partners), Enigma can provide aircraft operators and MRO shops with visibility into the entire maintenance and business process. This means that planners and AMTs can now see the complete maze of maintenance management, assess the moving target of inventory and regulatory compliance, control workflow, and gain a better understanding of their impact on the whole maintenance enterprise.

Snow believes that IT tools such as Enigma 3C improve the efficiency, consistency, flexibility, and overall expertise level of a maintenance workforce. He adds, "IT expenses are not usually associated with aircraft profitability, but the right IT investment can boost uptime and lower costs."

Service as a Profit Center

MCA Solutions’ service planning and optimization software (SPO) helps customers achieve the right inventory mix and reduce the risks of part unavailability. Bob Salvucci, president and CEO, estimates the Web-based SPO system can offer at least a 5 percent to 7 percent inventory savings through "what if" analysis that allows the forecasting of effective fill rates [parts in stock to service an aircraft].

Salvucci suggests that, from a quality standpoint, part availability isn’t the same as having parts on hand. "By using SPO as a tool to boost the efficiency of inventory logistics, parts aren’t just available, but arrive where they need to be and when, whether actual maintenance is conducted on a performance basis by an MRO on a short- or long-term contract or based on an OEM warranty. By offering customers these options, service becomes a profit center, removed from sales and manufacturing. Focus on achieving greater margins in warranties and service agreements becomes a new way to create revenues."

He further explains that SPO software is multiechelon, providing analysis of multiple layers within a supply chain, from the main depot and throughout depot networks. Such architecture helps avoid inventory overbuys or underbuys through an integrated decisions platform applied across an aircraft’s life cycle.

Another of MCA Solutions products, Service Inventory Optimization software, is now being teamed with SAP AG and its Web-based Service and Asset Management system. The combination can help answer customer demand for multifunction IT capability in planning and meeting service requirements and reducing inventory and overall supply chain costs. Customers for this software tool include Boeing’s Integrated Defense Systems, Rockwell Collins and Lockheed Martin, who are using it to plan parts for both their distribution and MRO operations. In Salvucci’s view, "All our customers have an efficiency curve based on part availability weighed against money invested. Our IT products put a bend in that curve to optimize both fill rate and part availability. Cultivating a risked-based perspective to some degree within that curve can move a customer up the curve with just one action. MROs, OEMs and operators have to make these kinds of decisions every day. Our software gives them an edge in accomplishing that." He concludes, "More and more, customers don’t want to buy product, they want to buy service and the use of a product."

Like Pac-Man going for as many points as possible and eluding threats in every section of the maze, a variety of tools can deliver the imperative win in the business of maintenance cost control. There are multiple options to MROs, operators and OEMs for making the moving cost target more quantifiable, predictable, and focused on quality service and customer satisfaction, which is always a win.

First-to-market Cockpit Display/installation Reduces Downtime

Innovative Solutions & Support, Inc. (IS&S), working with cargo airline operator ABX Air, has achieved an installation milestone: upgrade of a B-767 cockpit display system to the point of "power on" in only 48 hours. Comparable installations can take weeks, and IS&S estimates savings of $70,000 per day in aircraft downtime costs.

The four 10-inch flat panel displays in the system represent the first-to-market upgrade for the B-767, and this system architecture features an independent software processor to ensure system reliability and data integrity. Zoom capability magnifies pilot-selected settings for easier readability. The IS&S suite of cockpit display systems addresses primary flight, navigation and engine instrument data and integrates electronic flight bag functions.

The rapid installation results partly from reuse of existing racks, trays and wiring, as well as the prebuild of the instrument panels and wiring harnesses during the kitting process to eliminate extensive rewiring and costly additional components. The high level of expertise within ABX Air’s install team adds to the savings. Besides gaining ground for the increased reliability of flat panel displays in today’s cockpits, the IS&S architecture also reduces and simplifies overall system componentry. Ground tests and system checks could add another 24 hours to the overall installation time on the B-767, but these time and cost savings remain significantly higher even on a three-day turn time.

IS&S also has Supplemental Type Certification for their flat panel displays in B-757, and B-737 legacy models 300, 400 and 500, as well as the C-130 and Pilatus PC-12 aircraft. — By Vicki McConnell

Big Ass Fans Keep Employees and Budgets Comfortable

The descriptive name sounds funny, but these fans were developed by experts in air movement and thermodynamics and are a cost-effective way to cool a thin-walled hanger in the summer and keep it warmer in the winter. When air is pushed down from the fan, it hits the floor, spreads out and when it encounters a solid object, moves back up. This convection current of the Big Ass Fans, which range in size from 6 to 24-feet in diameter, provides more than 25 times the airflow of the standard industrial ceiling fan.

Using 10 patented light-weight aluminum airfoils and a ceiling-mounted design, Big Ass Fans move about 337,000 cfm, three miles per hour and cover areas as large as 20,000 square feet. The fans operate with one to two horsepower, 230/460v, single or three phase gear-motor, quietly using a minimal amount of energy ($.10 of electricity per hour) and providing comfort to employees working in both upper and lower levels of hangers.

Based in Lexington, Ky., and winner of the 2006 Manufacturer of the Year Award given by the Kentucky Association of Manufacturers, Big Ass Fans are equipped with a variable frequency drive so the fans can be sped up and slowed down. At slower speeds, hot air is pushed down, allowing users to lower the thermostats in the hangers. The higher speeds quickly and gently cool large spaces, causing skin moisture to evaporate and making a person feel up to 12 degrees cooler.

Clients include NASA’s Langley Research Center (which contains hangars with 100 ft. ceilings), Lockheed Martin, Century Tell, Alcoa, and Cafaro. Recently, one of Cafaro’s hangers located in Vienna, Ohio, which encompass 10,500 square feet with 30-foot high ceilings, was experiencing a 30-degree difference between floor and ceiling temperatures. When hangar employees were comfortable on the floor, the employees in the upper levels of the facility broiled and visa versa. This resulted in a constant tug-of-war with the thermostat, raising energy costs and tempers. Big Ass Fans installed a 20-foot fan and Cafaro experienced a 76 percent reduction in energy consumption from their previous winter without the fan. — By Rion Haley