aircraft parts

Pros & Cons: Time and Material Aircraft Part Repairs

You have a pile of repair orders on your desk. They sit, waiting for you to take action. Do you approve or deny them? It’s a constant price and lead time battle.

Pros-_-Cons-Time-and-Material

With your aged fleet, time and material aircraft part repairs is the best strategy for you. It gives you more flexibility. It’s the shirt that fits nice. It’s not too tight where it's choking you or too loose making you look sloppy.

When you adopt a time and material repair strategy, here’s some of the pros and cons to look out for.

[Tweet "The pros and cons to look out for when you adopt a time and material repair strategy"]

Let’ start with the cons…

Cons for an aircraft part time and material repair strategy

As with any decision, you must always consider your downside, or simply put, the cons.

Here’s some of the cons:

• Unpredictable repair prices. MROs will give you an average but the price swings can be great.

• Unpredictable lead times. Nothing is a guarantee.

• Varied customer experience.

• Varied piece part quality.

• Varied piece part pricing. Some MROs inflate piece parts or charge your NE pricing for NS or serviceable.

• You’ll spend more time managing your repair orders.

Cons-Time-and-Material

Pros for an aircraft part time and material repair strategy

Just because there’s a few cons doesn’t mean you should avoid them entirely. Time and material repairs can have a great upside, depending on your product or ATA chapter.

Let’s run down a few of the pros:

• You can control the cost by supplying your own piece parts.

• You have more control over your repair orders.

• You can fire your MRO for being too slow or having poor quality.

• The labor rates are either fixed or variable based on hours worked.

• You can avoid MRO bottlenecks by using different tiers of preferred MROs.

Pros-Time-and-Material-_1_

Whatever you choose, whether it be fixed rate or time and material, there’s pros and cons of each.

When deciding your repair strategy, sit down and write down your goals. What’s the end result you want to achieve?

If you want more freedom, outsource. If you want more cost predictability, fixed rate. If you want more control, time and material.

 

What's the difference between AR, SV, RP and OH aircraft part conditions?

This is series 2 of our aircraft part conditions defined. In our last post we talked about FN, NE, and NS. From the feedback we got, this cleared up much confusion.

aircraft-parts

aircraft-parts

Now, were talking about unserviceable and airworthy conditions.

These conditions are looked at vastly different in various parts of the world.

Some people will never use a "SV" component while others prefer it. On both ends of the spectrum you have AR which is removed from the aircraft and deemed unserviceable and OH which is the closest thing you get to NE. We'll explain this a little more as we get into each condition.

When you think of these conditions you first must determine your primary objective, is it price or quality? Answering this will help guide you to the right condition for your maintenance goals.

[Tweet "With aircraft part conditions, first determine your primary objective #avgeek"]

As Removed (AR)

Skylink: As Removed Aircraft Part

Skylink: As Removed Aircraft Part

This is a component that was pulled off an aircraft. Spoiler alert, that's where "as removed" comes from.

Sometimes she'll come with a reason for removal but often times in the part out world she'll come with nothing, just a removal tag and trace. It could be repairable or beyond economical repair (BER) for all you know.

These items must go to a certified MRO for functional test or repair.

Serviceable (SV)

Skylink: Serviceable Aircraft Part

Skylink: Serviceable Aircraft Part

This condition is intertwined with the repaired condition but there's minor differences depending on who you're talking to.

For a SV unit you'll know that the unit has been functional tested in accordance with OEM specifications and that it'll come with an airworthiness certification depending on what region you're in. Here as you know it's the FAA 8130.

Typically these units will not come with a teardown but only an airworthiness certification stating it passed functional test and it's able to be installed. This varies depending on MRO.

Repaired (RP)

Skylink: Repaired Aircraft Part

Skylink: Repaired Aircraft Part

The repaired condition is a serviceable unit that requires a little more work.

With repaired units minor piece parts are used to bring the unit into serviceable condition to meet the functional test requirements. Gaskets, bolts, and small expendables are the normal piece parts used in repairs.

This condition will come with an airworthiness certification and teardown detailing what was done and what piece parts were used in the repair.

Skylink: overhauled aircraft part

Skylink: overhauled aircraft part

Overhaul (OH)

This is the most work an aircraft rotable can go through.

Skylink: overhauled aircraft part

Skylink: overhauled aircraft part

This is the "best" of all conditions and requires the most work. With an OH unit you'll be sure that your units will receive the 100% OH kit according to the CMM and any other components to bring it to such a condition. Overhauled units can also be painted and cosmetically pleasing so you know you're not getting a hunk of metal.

Warning: In some situations, MROs will tag certain components as OH despite the CMM not having proper OH specification and they should be deemed RP. It's primarily used for marketing to sell a higher priced unit based on it's classification. We use to see this a lot with pitot tubes and other accessories.

That's it. Those are your 4 rotable condition classifications.

Depending on your operation, make the choices that best fits your needs.

Are you in constant need for aircraft rotables? Fill out the form below and we'll be more than happy to help you out.

3 Incredibly Important Reliability Areas You Need To Know And Improve On

What is reliability? Since 1988 we’ve been playing the reliability game. The gamble of who to trust and what actions to take.

Skylink-reliability

Today, much has changed. Everyone says and does the same boring thing, over promising and under delivering.

It’s common to run into reliability problems. It even gets to the point that some days you just want to run away.

Just ask our supply chain team.

Some days I have to peal them off the ceiling as they explode with frustration. I even have to peal myself off the ceiling some days.

Whether it’s logistics or even aircraft components, reliability is a game of chess. One wrong move and you lose time and money. With the right move you’re efficient. Time and money become your ally.

Many people talk about reliability, but unless you want to pay millions of dollars in consultancy fees, very little guides you in the right direction.

For now, let’s cover the basics…

Aircraft component reliability

The primary goal is to keep your components on wing for as long as possible. We’ll call this the dumbed down version of a much more complex issue.

At this point you’ll want to collect data and information about your aircraft components statistical analysis. This will give you valuable feedback on the data if irregularities developed in operation.

If you’re the type to geek out on this stuff, read this.

The key is to build a foundation for a component reliability program. Which ATA chapters do you have the most trouble with? Can you outsource solutions?

In order for you to answer these questions, having a firm understanding of your fleet and activity of components’ removals is very important.

[Tweet "Start slow and build your reliability program over time."]

Supplier reliability

It’s amazing how many people overlook supplier reliability.

I understand price is important, but it’s not the first or last decision. Your primary objective should be to work with people who can deliver and create the most value to you. 

When you look into your supplier reliability program answer these questions to help build your foundation:

  • Who answers you back the quickest?
  • Which company has an account manager that responds to you any day of the week, at any time?
  • Who helps you resolve issues?
  • Who provides solutions in addition to just selling you something?
  • Where is the greatest value for every dollar you spend?
  • Who solves problems without creating more problems?
  • Who do you trust?
  • How do their parts look when they’re delivered? Are they in good condition and packaged properly?

Answering these simple questions will guide you to building your supplier reliability program. You’ll avoid the people that over promise and under deliver.

Logistics reliability

If turn-around-times (TAT) keep you up at night then logistics is its angry step brother.

We live in a small world where we can get anything, anywhere in a short period of time and yet complications are still extremely common.

You may have experience with high import taxes, customs delays, airlines losing your packages, shipments being bumped and re-scheduled to a later date, damage parts, and the list goes on and on.

I have found the best logistics reliability program works with someone who is easy to talk to and helps you resolve problems. It’s really that simple.

I have worked with so many freight forwarders and 95% of them give me a massive headache. I feel one coming on now. We found 3 solid partners, one for routine freight, one for small parcel and one for AOG shipments and they are the only people we’ll use.

Build your logistics reliability program around your specific needs and the ease of communication should be very important to you.

Building a reliability program around aircraft maintenance and components, suppliers and logistics will help make your hectic aviation life easier.

Start slow and start now.

Do you have reliability issues? We would love to help you. Fill out the form below and we’ll tackle this together.

Super Easy Way to Reduce Aircraft Component AOGs With Insurance

Aircraft spare parts is a big deal. The aviation industry spends $5 billion, yes with a B, annually on replenish stock.

Aircraft-Component-AOGs

Stock is the insurance policy against unplanned removals and it's costly. No wonder so many people are stressed.

According to Oliver Wyman, this has a collective airline sheet balance of $19 billion. And yes, again with a big giant B.

Having the right aircraft components, at the right time, and in the right place is critical. Notice how I left out price?

Overstocking aircraft components isn't the solution

Many airlines have issues with over-insuring less critical and poorly positioned components and under-insuring highly critical components. Olivery Wyman estimates $175 million in similar inefficiencies for one major airline.

A lot of provisioning is organized from the recommended spare parts list (RSPL) from the manufacture. This is not a very bright idea. These lists often overlook the insurance nature of spare assets. It's a good starting point but not a gold standard.

They're typically conservative at best and over inflated at worst.

One solution for a good insurance policy is outsourcing

Airlines have begun relying on third parties to provision their spare parts needs. This improves access to aircraft components while reducing the significant amounts of capital tied up in inventory.

Aerotime explains it perfectly:

"Although maintaining a spare parts stock has long been a routine part of any airline’s life, it seems the situation has been gradually changing for a while now. Under competitive pressure more and more airlines have actually been abandoning the strategy of holding huge and expensive parts stock to support their operations.

In fact, according to the industry experts, the airlines have been reducing their stocks for about 10 years now, if not more. If such a pace remains, it is said that by 2020, the operators will abandon inventory stocking at all, thus switching solely to the offerings from third-party providers. Nevertheless, if this scenario in fact proves to be true, the industry has still a lot to do in order to improve the efficiency, transparency and reliability of such services."

Relying just on a third party isn't a good insurance policy

Outsourcing is a great way to reduce capital tied up on the shelves, but for an effective aircraft component insurance policy, it's not just up to them.

[Tweet "Focusing your efforts on internal processes can dramatically reduce your cycle time."]

Oliver Wyman states that for most airlines each day they reduce their cycle time amounts it can translate to $1 million in inventory shed from the balance sheet. Amazing!

In order for you to reduce your capital and AOG pressure, incorporate a better aircraft component insurance strategy into your operations.

Do you need better insurance to cover your AOG needs? Are you in need of spare parts provisioning? Fill out the form below and we'd love to help.

 

The Cost Myth Debunked: Cheap Aircraft Parts Vs. Total Value Creation

Have you ever bought a cheap aircraft part and regretted it? Of course you have. Cheap prices are attractive. They look good, smell like savings and sound like a “deal."

The lower you drive individual costs the better off you’ll be, right?

Not quite...

Cheap Aircraft Parts vs. Total Value Creation

Our supply chain team felt the pain of this just recently. They were huddling to bring in a new component to replenish a specific pooling product line. We’ve had trouble in the past with this supplier but since they met our QA standards we figured we would give them another try.

We sent the $3,000 PO to the supplier. They replied and said the unit is SV not OH, despite the email string saying otherwise. We told him that’s not we agreed upon and he replied:

“I’ll have to pass on this one…” Wait, what! He’ll have to pass?

We replied and demanded him to honor his quote and he stated “This is aviation bro, it happens.”

Yes, the term “bro” was used. I can’t make this stuff up. Can you believe it, this is aviation? Not Skylink’s type of aviation (Never Forget Your Wings).

This was our fault. We decided to procure based on price instead of total value. We’re still searching for this item and will have to absorb a NE unit at 4x the cost. We would have made other decisions from the beginning if we didn’t rely on this “cheap” price. Our mistake and we now pay.

Driving down cost is a smart decision but anything less than fair market value get’s you into sticky situations.

What you can expect from “cheap” aircraft parts

The definition of cheap is "costing very little; relatively low in price; inexpensive; low-cost in comparison to market."

Now, I’m sure you knew this but with low and cheap pricing you bargain with opportunity costs. You’re giving up something else in return for cheap pricing.

From experience, these are common things you gamble with:

  • Reliability
  • Quality 
  • Service 

If cheap pricing is the way you want to go then you may see a higher occurrence of vendor problems. This means more cancellations, delays and poor customer service.

Sometimes it’s worth the gamble, but most often it’s not.

What total value is and isn't

The definition of value is "relative worth, merit, or importance."

Total value isn’t you spending 2x the market price on a particular aircraft part or using a specific supply chain partner. Total value is the return you get in addition to the price you pay for a specific product.  This is calculated in many different ways but a great example is when your aircraft is undergoing a maintenance check.

When your aircraft is undergoing a maintenance check, you need to get parts to the MRO at a designated time otherwise you’ll be penalized, or worse, the aircraft will be delayed. Let’s say with every delay you’re charged $500. You could buy a cheap component for $2,500 or a fair market component for $3,500.

You risk cancellation and delays with the cheap component.

You’ll then have to resolve the problem and expedite shipping, spending more of your precious time. When it’s all over with the “cheap” aircraft parts cost will add up well over $3,500 when you consider your time and expedited shipping and even late delivery penalization costs.

Most of the time, it’s not worth the headache alone. When you go with total value upfront, you save yourself the headache after.

Remember, this doesn’t mean I recommend you buy expensive inflated components. What this means is look at everything, not just the “cheap” cost itself.

Look at reliability and service as the core benchmark to determine appropriate actions.

Have you been caught in a “cheap” price predicament? Are you looking for total value with fair pricing? Fill out the form below and let us prove to you that were not “cheap” we’re valuable.

 

5 Huge Reasons To Outsource Your Inventory

Airlines burden themselves with inventory. They procure aircraft parts to avoid costly delays and adversely restrict their financial flexibility.

outsource-inventory

Inventory works against itself.

It siphons cash, requires more administration, and is a pain in the butt.

You look at having inventory as the ends to a mean, but is it the beginning of a long hard relationship of what to have, when to procure it, and how much money to spend?

Airlines need to keep their fleets in the air, true, but you don’t have to specialize in all areas to make that happen.

Think about it.

Do you provide your own on board catering? Probably not, LSG Sky Chefs is who you’ll usually turn to.

Do you supply your own fuel? Not likely as Shell is someone you would consider instead.

What about aircraft maintenance? Yes, some legacy carriers do their own maintenance, but the majority of airlines will outsource this responsibility.

The same goes with inventory.

Why should you spend your time stocking inventory when you can focus more time and energy on core activities?

Inventory is a burden.

The burden of cash

Cash can vanish with the blink of an eye.

You prepare for future issues, but in the next moment your cash reserves are low and you're spending more money on inventory than anticipated.

With no specific plan, inventory and maintenance is a variable cost that is hard for your CFO to forecast and predict.

Costs add up and become a burden to your available cash for other operational objectives.

Airlines spend on average $1.6M on inventory per aircraft. If you didn’t have to invest in inventory, where could you use this money?

The burden of dust

What is dust worth to you?

The longer a part sits on your shelf the more it incurs holding costs.

At 20% of the value of the part per year, this easily forgettable cost of inventory adds up quickly.

Just think, if you have one $1.6M worth of inventory on your shelves for 12 months, that’s roughly $200,000 in holding costs you’ll have to deal with.

Chat with your CFO and see what she has to say about inventory.

Now go back and think of all the waste for expired or superseded parts.

Just another example of spoilage and you’re not even in the grocery industry.

The burden of administration

You’re thinking, duh, administration is a part of holding costs and you’re right.

But…

Let’s talk about its direct burden.

You have to have people procuring, receiving, inspecting, and maintaining your inventory. Think of the time and resources that’s tied to this activity.

Forget procuring just for maintenance projects, think about the resources that are used for you to hold inventory.

Do you see time and money flying out the window?

I do.

The burden of forecasting

How do you know what parts you’ll need and when?

You could consider the mean times between removal and how many flight hours each aircraft accrues, but is that necessary?

Yes and no.

It's necessary information for you to have but not necessary for you to use into inventory strategies.

When you begin to source components to support your MTBR and line up contingencies, you put more burden on time and money.

It adds up. What is your time and opportunity costs worth?

The burden of specialization

Every hour you spend away from your core activities, you're making an opportunity cost decision.

Calculate how much this costs you.

It’s a lot I’m sure.

Stocking inventory both for consumables and rotables is a specialization. You have to train, develop, and watch market trends.

You need to have a pulse on the industry. Who’s reliable and trustworthy, what are the best logistical options for easy distribution, and the list goes on and on.

These are activities you shouldn’t be engaged in. It doesn't make you money and there’s resources that are educated and reliable enough to do it for you.

The moral of the story is, when you're not focusing on your core competencies every activity becomes a burden.

When you tie specialization into pooling and inventory management programs, it becomes even more efficient for you.

P.S. Do you find inventory becoming a burden? Your solution is component pooling. Learn more by clicking here.

A Secret Shipping Method To Save You Thousands

Do you know what a properly shipped aircraft part looks like? save-thousand-dollars-on-shipment

Of course you think you do.

There has been many instances where we've received aircraft parts to our facility for repair and they weren't packaged correctly.

Or maybe you received a package and thought to yourself, “what baboon packed this box?”

Between you and me, I've thought this as well.

The parts experience more damage in transit, with thousands of dollars in increased repair costs to show for it.

A simple way to ship your aircraft part

At Skylink, we have a simple rule when we ship your parts.

We call it the fist rule.

You can learn more about it in this weeks video:

Packing your parts might cost a little more and yes, you may spend some more time, but in the long run it’ll save you thousands in freight damages.

And have you ever tried submitting an insurance claim?

Not fun.

Whether you utilize our shipping service or ship your parts to us for repair, make sure the fist rule is implemented in your shipping procedure.

Do you use the fist rule when you ship? Have you experienced damages to your aircraft parts in transit? Comment below.

Thousands of Dollars Lost Because You’re Now An Aircraft Parts Babysitter

Do you feel out of control? From delayed shipments and BER parts, to unaccountable partners.

thousand-dollars-in-trash

You make decisions knowing, feeling, and thinking it was a good move.

Right?

But suddenly your decisions kick you in the butt taking you two steps backward.

You’re exhausted.

A quick 30 minute task turns into a daunting 2 hour mission.

This is the epidemic we call a flawed distribution strategy.

You do more of what you shouldn’t.

Chasing, screaming, and stressing.

Is it because you forgot to get diapers at the store?

Today, you and your team are more babysitters than strategist.

More often than not, you’re babysitting your aircraft parts suppliers and MROs.

You have a choice to make.

Either go get more diapers, or fire yourself as a babysitter.

Focusing away from your strengths is not a good idea

When you have to babysit your partners, you do more of the small tasks you shouldn’t be doing.

That’s inefficiency at it’s best.

It’s like a CFO shipping and receiving. The two just don’t make sense.

Your strong points are not stocking parts, knowing the ins and outs of the parts market, piece parting to reduce repair costs, or staffing for component distribution.

Your strengths are not the same as an MRO or an aircraft parts supplier. They are to find efficient ways to keep aircraft maintenance costs low and reduce aircraft downtime.

Your profit generating activities is keeping your aircraft in the air and profitable, not babysitting suppliers and MROs.

Right now, you spend to much of you and your teams time babysitting.

It is not in your best interest to:

  • Follow up and babysit hundreds of vendors
  • Keep track of AWB #s
  • Review documentation for accuracy
  • Emailing RFQs and inputting hundreds of responses
  • Solving BER issues
  • Resolving cancellation problems
  • Piece parting your repairs
  • Finding efficient shipping methods
  • Solving supplier problems

Trust, it’s more than just a word

[CLICK TO TWEET]

Your title is not “VP of Nanny Services”

By streamlining your focus and utilizing key strategic partners your life will be much easier and efficient. We’ve talked about the art of delegating before.

Choose your partners wisely. Are they easy to communicate with? Do they solve problems as they occur? Do they give you options to maximize your operational results? Do they have various programs and services for your unique operation? Do they have a total support program? Do you trust them?

Answering these questions will enlighten you into who you're working with. Would you put your life and career into their hands?

You must be 100% confident in your partners. So confident, you’d put your career’s future in their hands.

Now that's trust.

What does an effective aircraft parts strategy look like?

An effective aircraft parts strategy is incredibly simple...for you.

All you have to do is state your need and the aircraft parts should show up at your door as you need them.

Sound too simple?

Well it is.

Remember you do not have time to figure our where to buy aircraft tape, how to best ship your $80,000 INUs, or the best options to forecast consumable consumption.

Your strategic aircraft parts partner is competent enough to have these figured out already. They are the experts in this field, or at least should be.

This is why we rely on our strategic distribution strategy.

Stress is not your ally.

The more you’re stressed having to babysit, the less productive you’ll be.

Streamline your distribution, work with partners you trust, and delegate tasks that are not your operations strengths.

Do you babysit your suppliers? Do you feel like you stock more diapers than mission critical parts? Comment below.

4 Ridiculously Easy Ways To Ship Your Aircraft Parts

So you lost your shipment in transit?

Maybe it was a ghost, a thief or an incompetent freight forwarder.

aircraft-parts-shipment

Whatever it was you’re now stuck without the material you bought.

It could have been $20,000, $5 or free, you're still in a bind.

More than anything, you needed this material for your operation and now it’s on you to deal with the loss, both of time and money.

This thought is frustrating, stressful and may even keep you up at night.

The impact lost aircraft parts has on you

Losing your shorts is embarrassing but losing your valuable assets is down right stressful.

This error not only affects you but impacts your entire maintenance and engineering departments.

Ouch!

I don’t know about you but I take financial losses personal.

When anybody losses something that you’ve put time and money into, it’s personal.

Above all, lost shipment create a bottleneck in your distribution cycle. Is your aircraft undergoing maintenance, do you have an AOG, or was it for your MEL inventory?

Whatever it is, lost shipments double your investment and create bottlenecks.

Simple as that.

The logistical plan of attack

When you arrange for your aircraft parts to be shipped, what’s your strategy?

This may seem like a silly question but having a strategy in place will help you avoid losses, streamline distribution, and secure high value assets.

It’s no longer just giving your supplier an address and account number, it’s about having a 30,000 foot view of your operation.

When you ship theres 4 key areas to focus on:

  1. AOG shipment: these are time crucial shipments that should be properly prepared for before they happen. Having an AOG shipper that can accommodate next flight out or aircraft charters is imperative.
  2. Routine small parcel: Having a proper process for routine small parcel will help you avoid unnecessary delays and additional cost for last minute decisions.
  3. Routine freight: Shipments over 150lbs can be costly if not properly prepared for. Especially if you end up using an unreliable freight forwarder.
  4. High value shipments: When you ship something of high value do you trust the people who are carrying it? By having proper strategies in place you can avoid the stress of in transit worry. I find using GPS helps with this worry.

By having strategies and processes for each one of these shipment methods it’ll save you time, money and worry.

It’s personal when you lose valuable assets. Start to prepare and eliminate these worries.

We provide a streamlined shipping strategy and all you have to do is worry about you.

We’ll take care of the rest.

Click here to learn more.