Interview with MRO Business Today: SkySelect’s Plan of Action and Much More....
You can view the original interview here
In an Exclusive Interview our CEO Erkki Brakmann speaks about the partnership with S7 Technics, and how COVID-19 pandemic helped them strive harder by coming out of their comfort zones and adapting to newer normal. He explains the post pandemic challenges and Companies expansion plans.
- Congratulations on signing of an agreement with S7 Technics who plan on leveraging SkySelect’s technology and talent to bring exponential savings of both time and money to their parts purchasing. Can you tell us more about the role played by SkySelect in this deal? How will you benefit from the agreement?
What excites us about the S7 Technics deal is the size and scope of their operations. They are one of the largest MRO’s in a very big air travel market, operating a fleet of over 100 aircraft, with a new low-cost subsidy on the way. It’s always a great opportunity to work with large airlines and MROs who are not just successful now, but ones in which we can grow larger with in the future.
Our technology and algorithms do the work of matching real-time demand for them with supply exactly when and where they need it, improving the overall logistics performance. In the end, we are helping them achieve exponential material cost savings and efficiency gains, which is no small improvement given their previously mentioned size. This shows the true power and capability of our team and product.
- What can you say about the USM inventory post COVID 19 pandemic and how can the operators benefit from it?
Pre-Covid, there was a shortage of both feedstock and supply of USM. In 2020, we saw a lot more aircraft retired compared to recent years, which created a lot of extract parts in the market that can be leveraged for cheaper repair costs.
According to consultancy McKinsey & Company, in the years before Covid-19, aircraft OEMs ramped up production in anticipation of continued air travel growth and some carriers have returned relatively new aircraft to lessors.
This significant increase of aircraft inventory coupled with a sharp decline in air travel demand has resulted in an unprecedented amount of aircraft and aircraft parts supply.
These new market developments have created a huge opportunity for MROs and airlines to leverage the surplus of parts to sharply reduce material costs. However, capturing these opportunities can be challenging as purchasing is manual and headcounts have been sharply reduced — that is where automation can really help to drive savings.
- Skyselect has a user-friendly software approach to parts purchasing which immediately puts the customers at ease. What was the inspiration behind setting up such a process?
This inspiration stems from a direct need in not only the air transport industry, but the supply chain as a whole. There is so much we can do to improve the aviation supply chain.
The way buyers are used to purchasing parts was perfectly suited for the 1970s, but that world no longer exists. However, buyers are still stuck with manual and time-consuming processes run by emails, spreadsheets, phone calls and sometimes even fax machines. Confounding those issues is the market is extremely fragmented and constantly changing.
We’re alleviating all of those past problems with what we are building at SkySelect. We are truly making a difference by bringing greater efficiency to a process and industry that so desperately needs it.
Our mission at SkySelect is to help make air transport leaner by building a world-class aircraft material supply chain using the latest technology to automate the majority of the purchasing decisions.
- How is the SkySelect’s process different from its competitors
One of the biggest differences between us and our competitors is that we are, as an independent company, building the ecosystem on both sides without favoritism towards buyers or sellers or certain companies. SkySelect is focused on working with our end users, airlines & MROs, to connect their demand in real-time with the proper supply and help airlines to drive tangible cost savings of 20% or more.
We enable the savings by using automation. SkySelect is the only automated purchasing system for aircraft parts using algorithms and machine intelligence to automate over 90% of the purchasing operations. We speed up the purchasing process from a part requirement to cutting a PO by 10x or more – literally from days to minutes.
SkySelect brings the immediate benefits without the upfront requirement of integrations. With that being said, SkySelect is an end-to-end solution for purchasing, and not a point solution. It can be used in conjunction with other platforms or point solutions, because it does what other tools don’t do.
- Any expansion plans on the cards?
We’re expanding in four key areas of the business:
Product: As always, we’ll be adding more features, enhancements and improvements to our software for both buyers and suppliers, to bring even greater value to the aircraft supply chain.
Customers: We have a number of existing customers spanning the globe we have yet to publicly announce, while several others are very close to signing.
Partnerships: We’re working on finalizing strategic partnerships with well known and respected companies in the industry. More news on this soon!
Team: We continue to scale our team by acquiring not just more talent, but top talent from across the globe from the Americas all the way to Asia. We’re focusing on both product and commercial talent acquisition.
- What was the pandemic impact on your business and how do you see the market reviving?
Obviously, the pandemic has been a very challenging time for the entire aviation industry. However, a silver lining can always be found. With air travel demand down and airlines having to think outside the box on how to build more sustainable processes, the crisis acted as a catalyst for change and airlines were more open to try new technologies and processes.
Combining that with the fact that airlines have also been tasked with doing more with less, created a real opportunity for us to showcase our platform, as it helps airlines and MROs make their parts purchasing process more efficient (even with less talent resources) and easier to scale up and down, compared to having to constantly hire and rehire talent.
Fortunately, we’re seeing air travel demand slowly increase, especially in large domestic markets like the U.S. and Russia. Mexican low-cost carrier Viva Aerobus has even reported a 100% return to its pre-pandemic capacity.
This together with more borders opening and more restrictions being lifted, has us hopeful for what’s ahead of air transportation.
- What can you tell us about the changing trends in supply chain and logistics Pre and Post COVID-19 pandemic?
Environmental sustainability is an important topic and COVID-19 has only accelerated this trend as well. When it comes to spare parts then the question is: how can we reduce the waste created in the industry?
Because the supply chain of parts is disconnected and lacks transparency we are facing overproduction, excessive stocking and shipping costs etc. We need to see how we can reuse more of the same materials already produced.
This is where technology plays an important role, because with manual processes, people are forced into becoming data entry clerks. Automation unlocks the savings and helps to optimize the supply chain giving people power to do more.