Improvements in Inventory and Forecasting Analysis – CL08-LOCK

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Improvements in Inventory and Forecasting Analysis – CL08-LOCK

The goal for this project is to analyze current forecasting methods used in a process, to improve forecasting and inventory management techniques and to develop a prototype decision support system (DSS) that provide benchmarks of changes made.


Lockheed Martin Aircraft & Logistics Center

Research Team:

Kevin Taaffe, Matthew K. Miller, Paul L. Goethals, Ashley Kay Childers

Universities Involved:

Clemson University

Start Date:


End Date:



This project analyzes forecasting and inventory techniques used at Lockhead Martin Aircraft & Logistics Center with the goals to improve part procurement and reduce maintenance/production delays by: (1) Setting appropriate reorder point / reorder quantities for all parts (2) Identifying improved forecasting methods to anticipate future demand trends. In improving forecasting and inventory management techniques for Lockheed Martin, Clemson re-evaluated safety stock settings based on customer purchase information as well as supplier reliability data. This combination of supply and demand data has resulted in an improved safety stock management policy. Future implementation of this policy has been demonstrated (via simulation) to reduce part stockouts and potential work stoppages, resulting in a significant savings to Lockheed. Clemson also worked with Lockheed in preparing material forecast improvements for their supply support programs. Based on historical demand (and additional rule-based part classifications), Clemson has recommended a forecasting model to incorporate into internal monthly reports as well as documents communicated to Lockheed’s suppliers.
Lockheed Martin has extensive experience in the maintenance, repair, and overhaul (MRO) of military aircraft. Recently, Lockheed Martin contracted with the Defense Logistics Agency (DLA) to provide spare parts and industrial hardware support to the U.S. Air Force air logistics centers. Under this program, Lockheed Martin provides approximately 50,000 bench stock items for a variety of aircraft through Lockheed Martin field offices at the three air logistics centers at Robins Air Force Base, Ga.; Hill Air Force Base, Utah; and Tinker Air Force Base, Okla. Lockheed Martin is continually striving to improve the material acquisition and distribution processes with the objective of enhancing the efficiency of the overall MRO process by ensuring material availability. Lockheed Martin and Clemson University are working together to: (1) Determine the extent to which forecasting and inventory management processes can be enhanced (2) Develop forecasting models that engage a wider range of factors to improve forecast accuracy (3) Develop improvements to automated systems to apply the new processes and models (4) Develop a simulation methodology that allows Lockheed Martin to benchmark changes to replenishment strategies without having to run each policy “live”.
(1) Actual lead times are longer than those assumed under the current operating policy (2) Identified methods for accounting for demand without physically counting inventory (3) Safety stock and reorder points are now set considering previous demand data as well as lead time data (4) Simulation of traditional forecasting techniques to choose the methodology that best predicts demand