Overcoming bottlenecks in aerospace logistics

Supply chain issues like carrier unreliability, poor demand forecasting, lack of visibility, delays in component shipments, and lack of real-time tracking are common in today’s aerospace supply chain. These challenges lead to disruption of business operations characterized by downtimes in operations and significant potential revenue losses.

If you are an aerospace parts distributor or sub-contractor, this article is meant for you. Read on and gain practical knowledge about how to overcome logistics challenges, minimize lead times, forecast demand accurately, and ultimately, learn how to reduce operational inefficiencies.

Understanding the ripple effects of component delays on MRO performance

In the aerospace supply chain, optimizing logistics for maximum efficiency and minimized costs is imperative for distributors and sub-contractors of parts. Delays in component delivery are a sign of poor logistics optimization and have adverse effects on your business.

Delayed delivery of parts might prompt a client to source components from other suppliers in an emergency. This results in revenue loss due to missed sales opportunities on the part of the contractor or distributor.

The loss is not limited to the components distributor. If the client is an airline, a grounded aircraft will lead to cancellation of flights and reorganization of operations. The carrier might also be forced to give refunds and reimbursements to their customers, which leads to lost revenue and risks harming your brand reputation. In addition to passengers, the shippers using the belly space of commercial aircraft to ship cargo also suffer from delays.

Therefore, lengthy downtimes due to stalled aircraft can lead to losses, not only to the components distributor, but also to the airline and its customers, the passengers and cargo shippers.

Proven strategies to minimize lead times in aerospace logistics

Long lead times are detrimental to any business, and the aerospace industry is no exception. Aerospace components contractors and distributors can minimize lead times in procurement and delivery of parts through the following strategies:

Data-driven demand forecasting – Aircraft parts distributors can utilize predictive or AI-assisted demand forecasting to anticipate the demand for specific components accurately. Using historical data, parts distributors can make informed purchasing decisions, effectively avoiding stock outs or overstocking. Informed purchasing leads to an optimized inventory and ensures that components are readily available when needed.

Real-time tracking – Parts suppliers need to track their inventory in real-time to avoid delays and plan accordingly. A sure way to do this is by investing in a robust and fully integrated Transportation Management System (TMS). A TMS will help you track and trace your shipments, from the manufacturer to your distribution center and from there to your customers. Additionally, the system will continuously update you on the status and location of your shipment. If you need to communicate with your carrier, a TMS has carrier connectivity modes such as electronic data interchange (EDI), text, and application programming interfaces (APIs).

Process automation – Manual order processing leads to delays and errors. Introducing automation through the implementation of a TMS will empower you to reduce lead-times, streamline operations, create efficiency, and improve customer satisfaction. In addition to implementing a TMS, a Logistics Service Provider (LSP) can help you integrate other platforms with your TMS, such as your enterprise resource planning (ERP), to help you create a best-in-class logistics ecosystem that addresses the unique needs of your supply chain.

How demand forecasting fuels operational stability

Demand forecasting is one of the pillars of inventory management. Precisely predicting future demand for particular components helps to avoid downtime when least expected. Here’s how demand forecasting fuels operational stability.

Increased efficiency – Precise demand forecasting provides you with an opportunity to optimize operations and minimize waste. For instance, you can tell which parts are needed most at a particular time and procure them ahead of time based on consumption metrics. Additionally, you avoid running out of stock for components that are in high demand, effectively avoiding losses that may arise from lost sales.

Improved planning and decision making – Demand forecasting helps you make informed decisions about purchasing, inventory management, and pricing. By effectively analyzing and forecasting demand, you are better positioned to optimize pricing, prioritize production, and re-organize your warehouse space and allocate room for fast-moving components.

Better customer service – Customers feel frustrated when they can’t get the components they need at the right time. Accurate demand forecasting ensures you have the right components at the appropriate time to meet demand. Prompt order fulfillment leads to increased customer satisfaction and loyalty.

Real-time tracking: A key tool for reducing downtime in aerospace operations

Inventory Management Systems (IMS) provide real-time inventory tracking so you can  monitor inventory levels precisely at all times and navigate common supply chain challenges that lead to downtime. Integrating your IMS and with your TMS creates a holistic, seamless, and data-rich environment that delivers real-time visibility into your inventory data, including locations, status, and quantities.

Here is a brief overview of how real-time tracking is a formidable tool for reducing downtime in aerospace operations.

Enhances demand planning: Real-time data enables you to predict demand and align inventory levels to match customer needs accordingly.

Simplifies the purchasing process: When inventory levels reach a certain threshold, the system makes an automatic order, eliminating the chances of running out of stock.

Reduces costs: With real-time visibility, you reduce the chances of carrying too much stock, which might lead to additional inventory holding and insurance costs- you only buy what you need.

Aerospace logistics are the backbone of the aviation industry. Unfortunately, the aerospace supply chain has witnessed several bottlenecks that often lead to downtimes and losses. Part distributors and sub-contractors can overcome the challenges by adopting technologies like TMS, integration middleware, demand forecasting, and real-time inventory tracking. Consider partnering with a credible logistics services provider to help you implement the right TMS and logistics tech for your supply chain needs.

Sheer Logistics

https://sheerlogistics.com

Courtesy Sheer Logistics

About the author: Nick Fryer is Vice President of Marketing for Sheer Logistics. He has more than a decade of experience in the logistics industry, spanning marketing, public relations, sales enablement, M&A and more at 3PLs and 4PLs including AFN Logistics, GlobalTranz, and Sheer Logistics.