Part number. Search. Mass RFQ. Repeat.
By following this method, you’re leaving time and money on the table.
Once you implement a few simple tips, you’ll streamline your APU sourcing process, making it more efficient, because at the end of the day you care about results.
You care about lowering turnout times, lead times, and total cost.
Once you’ve sourced appropriately, you’ll achieve this, but it has to be strategic in nature.
Prepare for Future Removals
The first step to sourcing your next APU is to prepare for future removals and look closer at your organization's data.
When is your APUs scheduled to come off the aircraft?
Do they have upcoming maintenance check?
You have to think about this before you “start” sourcing.
Yes, maintenance may tell you when you need it, but you should start looking at your future removals before they tell you.
Look at the data you have now.
These data points will give you a line of sight into when you can expect removals, repairs, or replacements that will be needed so that you can begin planning effectively ahead of time.
Mean Time Between Removals will show you the average amount of time or frequency for removing your APUs.
Utilizing the system data in the Enterprise Resource Planning System can give you a more clear line of sight into frequency and scale.
Look at the data environment in its entirety that you have available to you.
Everybody is talking about data analytics, but the vast majority of us don't have that available to us right now. You’ll have to do a little bit of digging.
If you have a large fleet, this becomes a lot harder, but if you have a small to medium size fleet, you can look at your total APUs now and how they’re operating, the cycles remaining, and if there’s anything needed of them soon.
Look at the data you have now!
Don’t Send Mass RFQs
Sending mass RFQs is a big issue. Most operations think getting more quotes from a variety of vendors will result in obtaining the cheapest price.
Doing this results in choice overload. It stirs up the market.
Things happen in the marketplace when you send out mass RFQs.
Let's say you send it out 5 RFQs. Of those 50, five companies can support you on your APU need.
Now you have everybody asking everybody for your APU and the demand for the APU skyrockets.
What happens when demand skyrockets and supply is low?
Prices go up.
Don't send out mass RFQs.
Beyond “stirring” up the market, you’ve caused a stir in your job. Too many choices can lead to regret, overwhelm, anxiety, and ultimately making the wrong decision.
A great example of this is let’s say you send out those 50 RFQs and you get 50 quotes back (highly unlikely).
From there, you're going to end up jumping to the cheapest provider.
Really out of the 50, the cheapest provider, won't give you the best quality and the best service. They could cost you a lot more money in the long run.
By strategically sending out your RFQs to the appropriate people, your trusted material partners, you’re going to get better results. You don’t have to sort through 50 RFQs, which is a waste of time in itself.
Time is money!
Establish Initial Conversations with Your Trusted APU Partner
Once you know what you need from looking into your data and you’ve determined whom you want to send your RFQs to, it’s time to establish the initial conversation with your trusted APU partner.
It doesn’t have to be a specific APU provider. It can be your trusted material provider or whomever this partner may be for you.
Start having a conversation three, six, and twelve months before your APU need. If you have this conversation ahead of time, your trusted material partner can begin planning to best support you.
The Key to Any Great Relationship is Communication and Trust
The key to a good relationship, to any good sourcing strategy, is communication and trust.
Let’s go back to our example of the 50 RFQs. How many of those vendors do you have a good relationship with? One? Two? Maybe three?
It’s crucial when purchasing your APUs to have that great relationship established on trust and communication.
If you don't have the right material provider, start building routine communications that create a trust-based relationship, three, six, nine, twelve months before you spending a substantial investment on your next APU purchase.
Reduce your risk.
Get Your Financials In Order
If you have a $300,000 APU investment coming soon and your finance team hasn’t prepared a few issues could arise.
Shock to your finance team.
No cash or cash flow to pay for APU.
Late payment resulting in a credit issue with your vendor.
Once you're late on $300,000 and your credit terms get lowered, it will cause tension within your trusted relationship.
Payment delinquency makes it harder for your future AOG and high-value purchase needs.
Having honest conversations with your material partner is critical.
"Guys, we just bought one or two aircraft, cash is a little tight, but we have an APU coming six months due. Let's start discussing now on what we can do financially. Maybe we can discuss some additional terms or come up with a plan together. What do you think?"
Having a relationship based on trust and communication is even more critical when it comes to your financials.
Often, you might not even know your financial standing, but it's imperative you figure it out.
By implementing these few strategies in our sourcing process, you’ll see tremendous results once your APU gets delivered.
Look out for the next post on how to process your APU for maximum efficiency.