Guest Post: Bimba Jayawardena, Manager - Procurement and Logistics at FITS Aviation. With 6 years in supply chain management and 12 years in research and development hands on experience, she’s a powerhouse in the industry. She is now a Manager of Procurement and Logistics at FITS aviation. She’s responsible for providing total procurement and logistics services.
The non-stop flight by Qantas from Perth to London was an aviation game changer in more ways than one. While the feat itself is testament to the ongoing transformation of engineering in the airline industry, you need to look beyond the flight itself and ask: What does this mean for the future of aviation across all areas of its supply chain?
On the face of it you may not think that much has changed, or that it will. In reality the success of the flight puts a spotlight on how supply chain management and aircraft line maintenance will be forced to adapt to evolving and challenging requirements in the future.
This blog is the first of two pieces looking at how effective supply chains operates and how information is key to driving forward successful client-supplier relationships going forward.
But first, let’s go back to basics…
1. What is supply chain management and how does it apply to the airline industry?
A supply chain is a system where organisations and the assets it is made up of/information within it, flows between a supplier and a customer. The aim of this process is to identify, construct, and supply, products and services that address a need and solve a problem.
Within the airline industry this process primarily focuses around the assembly line of aircrafts. Suppliers are identified against set criteria for manufacturing components that meet the requirements of the top-level organisation. Factors such as materials, finance and information, which flow through the system, are known as the supply chain.
Managing these processes is vital to the success or failure of the end goal. The reason I highlight the Qantas flight is because it puts new pressures on supply chain management. In this instance it relates to both the building and the maintenance of new classes of airline.
2. What are the benefits of shared information within a supply chain?
The consistent and cohesive flow of suitable, relevant information means that all stakeholders benefit from cost reduction, system improvement, and on-time deliveries. These three elements are the driving force behind how effective supply chain management is.
Information is a two-way street. It gives power to the clients who has access to knowledge relating to quality, pricing, and availability, that informs decision making. Simultaneously, the information available provides vital insights to suppliers who can adapt and evolve to the changing requirements the industry expect and match these with competitive pricing.
Furthermore, accessibility of information means a reduction of constraint factors such as bottlenecks and decision making. Real-time supply and demand give accurate data on what is needed and what can be supplied, helping temper customer expectations and managing client relationships.
3. What kind of information should buyers and suppliers share to be truly effective?
If I was to list the different types of information that could be shared, you’d be reading this blog for longer than you probably want to. Fundamentally, you should consider the following:
Supplier - Innovative product development that informs increased performance
Supplier - Capacities and capabilities, including turnaround times, for purchasing decisions
Supplier - Full traceability process including order status, tracking information and delivery timeframe
Client - Current inventory data and demand history to inform purchasing cycles and delivery schedules
Client – Sales data and market trends for price-point negotiation and pre-planning
With the emergence of longer-haul flights, we have to consider the new data available that will inform maintenance planning. The increasingly detailed levels of information that airlines receive before, during, and after flight, will result in a combined proactive/reactive supply chain.
4. What types of technology best facilitate supply chain management?
Each day brings the latest technological advancement and constantly keeping up with ‘the next best thing’ normally means falling behind on the important parts of your job. There are a variety of platforms that can be used in supply chain management. These include:
E-Commerce and E-Newsletters are the foundations of online supply chain management, giving clients the ability to announce new tenders and purchase stock directly online. It allows clients to research potential suppliers while allowing manufacturing businesses the ability to compare against competitors and keep up to date with industry changes.
Enterprise Resource Planning (ERP) is a client-supplier system designed to offer maximum optimisation in the planning of resources and materials. This gives total control over production and inventory management. This in-turn leads to accurate financial forecasting allowing greater oversight of production and aircraft line maintenance costs.
Radio Frequency Technology (RFT) helps with the tracking and delivery status of managing the movement of supplies throughout the logistics process. Simple management of pickup and delivery gives both the client and supplier access to systems and information that detail delivery schedules and potential delays.
Electronic Data Interchange (EDI) is the automatic computer-to-computer process of transferring business documents between stakeholders. It can be used for issuing a bill of lading or airway bill, customs clearance import/export, and communication with both parties’ banks. These systems are ideal for managing suppliers with real-time information.
Customer Relationship Management (CRM) systems help you to manage your database of customers and their needs. With advanced levels of customisation to detail orders, requests, and communications, keep everything in one place for ease and convenience.
As technology evolves I expect this list to evolve too. I mentioned in my third point about the rise of aircraft data being available. If suppliers were able to directly access this information from the aircraft, as it is collected through some form of website or data portal, their ability to respond and manage supply chain requirements will only improve.
With the changes we are witnessing in the airline industry informing the need for a smarter, proactive and reactive supply chain, the way that the systems and process respond will dictate who wins and loses when it comes to the supply of current and upcoming tenders.
Keep an eye out for part two of this blog, coming soon, which will look at:
The impact of sharing information on performance and coordination
What the barriers are to sharing information across stakeholders
Cross-cultural differences and their influences on the buying/supplying process
And how knowledge sharing ultimately leads to best-practice supply chain management