You live in a world where fast paced and stress is how you get things done.
And since your product is flying close to the speed of sound, fast paced is an understatement.
Grounded aircraft and poor planning is a sure shot to lost money.
It was a hazy Monday morning, with the fresh aroma of Colombian coffee sitting on my slightly organized desk.
I thought to myself, "now this is a great Monday."
My agenda was prepared, planned and ready to be tackled.
Until I got the phone call...
"Nate, I'm in a dire situation. I need 10 bolts in South Africa by tomorrow or my aircraft is grounded. And you know how much this costs me."
Suddenly, my entire morning changed.
The bolts were allocated, the airline ticket was booked and the bolts were in a suitcase on the next flight out.
Ten $50 bolts cost $7,500 by the time they were installed.
I've even heard stories of similar situations costing $30,000.
Consumable procurement is one of your greatest nightmares. From poor planning to no stock, it can create a mess...fast.
Your aircraft consumable battle plan
How you work this requirement will either leave you on time and at a fair overall cost, or it'll cost you delay's at a higher cost.
It’s usually your choice.
Aircraft consumables are not created equal
This may sound like a no brainer to you, but as often as I see this confused, it's clearly an issue. Having a mixed requirement takes planning. HAZMAT can require your partner to review country specific regulations and tape can get bulky and push you to ship freight. Having a clear end result for your requirement is important.
HAZMAT can delay everything
Shipping HAZMAT internationally is a lot different than shipping it domestically. There is country and airline specific regulations that can create issues for you. Knowing what you’re buying and to what country your shipping it to is a good way to prepare.
Consolidating will save you thousands of dollars in freight
By ordering from multiple sources, you exponentially increase your international freight costs. Once you factor in shipping from multiple suppliers, receiving in multiple orders, managing issues, processing new orders, the "cha-ching" sound keeps ringing. Therefore your cost is now well over the original PO amount. Besides shipping, there are always hidden costs lurking, ready to eat at your profitability. By organizing and working with a strategic partner you can save at least 15% of your costs by consolidating.
A shipping strategy is crucial
A great client of ours procures consumables and utilizes an AOG freight service to ship the order internationally to their maintenance base. Now, I disagree with the excess costs of the AOG service for every order but they have a plan. They know how it's going to ship, who's going to ship it and by what means it's going to get there. Whether they use our shipping service or not, they have a plan and can forecast shipping costs. They also take advantage of consolidations which helps them save.
Bulk buys discounts
When it comes to consumables, the more you order, the more likely you'll get price breaks . Even better, if you know how much you'll consume over a 12 month period you can tell your partner and they can plan to have it ready for you as you need it. That way you can still take advantage of the bulk discounts over a longer period.
Lead times are an issue
In an ideal world, you would have everything you need as you need it, but ideal isn’t always the case. Often times, certain consumables are made to order or have OEM lead times. If you have history with this material, it’s very important to note this well in advance so you can properly plan. Talk with your partner so they have it ready for you when and as you need it. Planning and communicating are crucial here.
Forecasting is everything
Forecasting will help you reduce cost and save time than any other point. Being AOG for 10 bolts is a costly mistake. That's why we created our JIT program. Work with your partners to build a forecast so you can have these spares in stock as you need them and reduce your AOG risk. It will also save you on shipping and processing costs.
The biggest takeaway from these 7 secrets is to properly plan. [CLICK TO TWEET]
If you don't plan or have an idea of how your order is supposed to be processed it’ll cost you and your operation more time and money.