Impact of information and communication on spare parts delivery lead time during AOG situation in aviation industry

Abstract

This research is carried out to study the impact of information and communication on delivery lead time of aircraft spare parts during aircraft on ground (AOG) situation in aviation industry. The industry operating cost is very high and includes labour, fuel, aircraft maintenance, spare parts and equipment, licensing, crew training, insurance and airport landing and parking fees. In addition to these costs, a very high cost causes to the operator when a scheduled flight cancelled and ground the aircraft due to a technical failure that emerge suddenly. Then the operator faces a challenge of supplying the required spare parts immediately to repair the aircraft and thereby spare parts delivery lead time becomes very critical in aviation supply chain management. The problems that airline operators face with aircraft maintenance are; High cost of spare parts and life limited items are made to order with delivery lead time, Spares supply connect with multiple suppliers, Quality and safety conformity requirements, Regulatory obligations for transport/export/import, High dependency on logistics mode for transportation and Delivery lead time. Treuner during his survey on aviation and aerospace industry supply chain behavior has found that aviation industry supply chains are becoming more vulnerable than ever before due to globalization and complexity. He identifies main causes for the supply chain disruption are as resource constraints, communication and quality issue followed by suppliers and forwarders inefficiencies. (“Aviation and aerospace supply chains move eastwards,” n.d.). This lead to an industrial need to study the impact of communication flow on delivery lead time in supply chain management among other factors. Previous research on impact of communication flow on delivery lead time could not find during the literature survey and identified the research gap need to fulfil for the industry. This research studies the flow of communication and information across the supply chain and their impact on spare parts delivery lead time at AOG situation under specific focus where the spare parts need to be procured and supplied and not found in stock inventory at the time AOG. The data was collected with respect to a small scale international air cargo operator in Sri Lanka. Learned experiences can be share with similar small-scale airline operators for the improvements in their supply chain management. Chapter outline of this research includes, introduction to the industry, literature survey on communication and information sharing impact on delivery lead time in supply chain, research methodology, data analysis, results and observations and conclusion and recommendations. Due to the complex nature of supply chain network and uncertainty involved in delivery lead time, PERT statistical tool was used as the research methodology. The research outcome identified the sequence of communication flow in the procurement process and the critical activities involved. It also shows that procurement process has four major time constraints that occur at external stakeholders in the upstream of the supply chain and has limited control to the operator; time taken for receiving quote from a supplier and order confirmation, payment to effect at supplier’s bank, logistics arrangement and transportation. Handling of logistics and transport is complex and involved high risk of changes in flight schedules and cargo offloading which results in delivery delays. It was identified that activities most likely to make errors in communication are identification of correct part number by the engineer, communicating the part number to procurement, communication across supplier network to find the identical part number and communication between forwarder, airline and shipper on shipping instructions. Most common errors found are wrong part number or incomplete part number, supplier ship different part number instead the purchased part number, goods ship to different location without following delivery instructions and short deliveries. Propose to re-structure the procurement process internal communications such that waiting time for internal response minimized by minimizing non-value activities and serial communications. Instead serial communication, parallel communications and use of ICT technology such as cloud computing systems are encouraged to use during approval obtaining and decision-making activities.