Four Pain Points in the MRO Supply Chain & How to Solve Them
By Tulika Dayal, Head of Operations & Co-founder
The MRO supply chain is offline, slow, opaque, expensive, and inefficient. Recent events such as Covid, economic sanctions, re-routing, and no-fly zones have only confounded supply chain disruptions and further illustrated the need for change.
However, even in the most daunting circumstances, opportunities can be found. Thanks to digitization efforts and rising technologies such as ePaaS (eProcurement-as-a-Service) from SkySelect, the MRO supply chain, and parts purchasing process can be tangibly improved.
But let’s first circle back and outline the four of the major pain points within the MRO Supply Chain, and then we’ll discuss how to solve them.
1. (Poor) Supply Chain Visibility
The opaque nature of the MRO supply chain makes the parts purchasing process complex, time-consuming, and filled with constraints. This makes it impossible to report on and understand performance. Buyers are left asking themselves questions such as:
- Are we getting the best deal?
- Was this the best lead time?
- Were all the right suppliers informed?
- Could we have done something differently?
These visibility obstacles are not only challenging and painfully tedious for day-to-day operations but also hinder the overall efficiency and profitability of airlines and MROs. To combat these challenges, the aircraft parts supply chain needs a system that can help answer these questions about aircraft parts.
Far too much of the process and information of buying and selling aircraft material is done via paperwork, phone calls, emails, and other outdated practices. Reporting on the results of each buy is difficult.
2. Capacity Constraints
Aviation has been hit particularly hard over the last few years, with different social, economic, and political challenges. Today the MRO industry is up against severe capacity constraints, as it’s become increasingly difficult to source, purchase, and implement the right parts and materials with the right aircraft in a timely manner.
One of the effects has been what some are dubbing the great resignation. A number of knowledgeable and skilled aviation professionals, including buyers, were either let go or left due to Covid and have transferred into other industries. This has made it difficult for airlines to recruit new and experienced talent as they begin to scale back up. Airlines are faced with constantly trying to balance human resources by hiring, releasing, and re-hiring talent.
And when airlines do have the right team in place, constraints don’t stop. Even in a best-case scenario, where the employee knows which supplier(s) to invite, this process is very manual and tedious because individual requests for bids must be sent out.
Even more confounding, in many instances, the right suppliers are not known, so all the suppliers in the Rolodex (which usually relies on personal relationships of individual buyers) are sent an invitation, even though for many of them, the RFQ may not be applicable.
3. Time Spent on Manual Tasks
Capacity constraints lead us directly to the next issue: far too much time is spent on manual work instead of focusing on strategic tasks because of antiquated processes and technology. Buyers get bogged down with tasks such as finding the right suppliers for the right material need, contacting those suppliers, often conducting follow-ups, and, finally, making and tracking the transaction.
Even in an ideal situation where the part is sourced on time and for what seems to be a good price, in many cases, it probably could have been done quicker, easier, and at a better cost.
Making matters worse, and tying back into the talent crisis, a lot of this labor is tedious and ungratifying for buyers, which can lead to dissatisfaction, lack of engagement, and in some cases, burnout.
This is why it’s so important to replace manual efforts with automated processes and technology. By leveraging technology to do the recurring work, buyers can focus their time on more important and fulfilling tasks.
4. Excessive Costs
All of these three pain points create additional pain because they lead to additional costs. By not efficiently optimizing workflows and processing parts, airlines are incurring costs that can otherwise be mitigated at a time when every penny possibly must be saved.
Airlines are experiencing delayed maintenance because of untimely parts procurement, buying overpriced parts because they don’t know or don’t have the time to find the best deal, and/or not processing parts as quickly or as efficiently as possible.
As we are all too well aware given the recent challenges endured by the aviation industry, airlines cannot afford to bleed cash anymore, so any savings are a very welcomed occurrence.
How to effectively leverage technology in the MRO Supply Chain
Fortunately, there is a better way forward and a solution to all of these pain points wrapped into a single source of new technology. As alluded to in the introduction, ePaaS (eProcurement-as-a-Service) gives airlines the tools and processes to create a better aircraft parts supply chain. We’ll be exploring this in more detail in the next parts of this series. To give you peace of mind, there is a way for airlines to adopt smarter processes and work more agilely.
ePaaS, powered by AI and algorithms, allows airlines to procure parts at scale and automate over 90% of the material procurement process.
The platform automates the material purchasing from days to minutes and allows the buyers to focus on strategic tasks. Savings and operational interruptions can be unlocked instantly while bringing visibility into the supply chain.
We invite you to follow along as we go into more detail about each of the four major pain points and how to solve them.