Are you frustrated with idle inventory? Do you wish the money invested into holding costs could be utilized more efficiently? I feel your pain!
I've visited aircraft graveyards in the Mojave as well as large warehouse facilities of airline material management divisions, much like yours. But I also understand this because I too sit on millions of dollars worth of inventory that have long since been idle.
Whether it be planning for a surge in traffic with the forecast falling short of expectations, modification of an existing aircraft, or an aircraft on their last stretch of useful life, these are valid reasons for a surge in surplus. But, is this necessary? Maybe.
Back in 1999, Skylink acquired an L1011 (see the trivia question to see which celebrity we bought this from), tore it down and began distributing the spares. Not shortly after all the major components we're sold, demand began to fall and we were left with low turnover inventory sitting on our shelves. Why does this matter you ask?
Well, this what our business model is based on, and yours…creating high yield routes, keeping the aircraft in good shape and providing safe transport.
Here are 5 Reasons you Should Consider an Asset Disposal Program:
Helps Fund Operations
Idle inventory never funds an airlines strategic initiatives. It's wasteful, time consuming, and costly. Liquidating this surplus to continuously help fund your operations is an incentive that can be considered.
Idle inventory, is just that, idle inventory. But the money from liquidating such inventory can be used throughout your organization.
Helps you Focus on Core Competencies
Ian Heller's Five Components of a Business Strategy states that in order for an airline to be competitive it must provide consumer benefits, a model that is difficult for competitors to imitate and something that can be leveraged widely to many products and markets.
So what does this mean for you?
Well, it means do what you do best. Create an unbelievably integrated organization that provides valuable services for the customer at the lowest cost. Idle inventory only adds to this cost and the time spent storing and funding logistical avenues for such inventory can be a burden to an airlines overall model.
Helps Reduce Staffing Cost
An aircraft asset disposal program can also reduce staffing cost. No, I don't mean by making cost cuts by eliminating positions, but more importantly utilizing staff in areas that are more central to the core competencies.
This will allow you to be more efficient, by reducing staffing cost in unproductive idle inventory monitoring activities.
Helps with Higher Asset Turnover
Healthy aftermarket organizations whom have been in business for decades know the market and what it takes to liquidate spares. They also have experience in quality control, logistics, warehousing, inventory management and repair management, by which they perform day in and day out. This is their focus and this is what their good at.
In essence utilizing a good aircraft asset disposal program may be of interest to you. Lowering costs, focusing on core competencies and engaging with a trustworthy aftermarket distributors is key to managing the over abundance of spares in your warehouse.
What would you want out of an aircraft asset disposal program? Respond in the comment section below.