Have you ever received an aircraft component repair work order and wondered, how in the world did the price get so high?
The repair facility quoted you an average overhaul cost, but for some reason your work order quote is twice the average.
You review the work order thoroughly but to no surprise there are no over and beyond parts.
You begin to think where you went wrong but the truth of the matter is, you didn't.
Repair facilities have a bad habit of quoting you an average but then charging you a 400% markup on piece parts.
Just recently we were quoted $5,812 for a servo valve we had at the MRO for overhaul. They were charging us $4,600 for a torque motor needed to overhaul our unit. Our repair manager supplied our own torque motor at a cost of $700. Our final repair cost was reduced to $2,162.
Can we say savings?
Avoid the Inflated Piece Part Trap
The best way to avoid this trap is to supply piece parts for your repairs. If an MRO facility doesn't allow you to supply your own parts it's because they have inflated margins and you shouldn't be working with them.
By supplying your own piece parts you reduce the inflated mark ups and keep the cost minimized.
Just think of what a 300% savings could do for you. I know it's drastic.
Utilize a Repair Management firm
Repair Management firms do this best because they utilize their large pool of excess surplus of rotable and expendable spares to support your repairs. They encourage cost reductions and won't charge you list price for piece parts.
By tapping into a repair management program you will be able to focus on what's important. They have the approved vendors and inventory of piece parts to support your cost reduction needs. The inflated prices for aircraft component repair piece parts is a trap most airlines fall victim to. They automatically think that the prices given are honest and straightforward.
Remember, the best way to avoid this trap is by tapping into your repair management resources. If your partner is good, they will inspect every piece part the MRO says your component needs. If they see inflation in the prices, they will supply their own piece parts.