Identifying Materials Management Improvements for Aircraft Logistics Centers – CL09-LOCK

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Identifying Materials Management Improvements for Aircraft Logistics Centers – CL09-LOCK

Routine maintenance, repair, and overhaul (MRO) of aircraft includes mostly standard work, but often there are "Over and Above" work requests for unanticipated repairs • These requests require a certain level of on-hand inventory in order to continue working on aircraft and minimize delays • Each piece of inventory requires an inventory cost investment Project objectives are to improve processes managing materials by • Reducing total inventory investment without increasing stockout risk • Increasing the visibility of supplier-related data (e.g. lead time) to reduce the need for additional buffer inventory • Reclassifying work requests to encourage holding predictable inventory requirements

Sponsor:

Lockheed Martin Aircraft & Logisitcs

Research Team:

Dr. Kevin Taaffe, Matthew K. Miller

Universities Involved:

Clemson University

Start Date:

09/01/2009

End Date:

08/31/2010

Summary:

Routine maintenance, repair, and overhaul (MRO) of aircraft includes mostly standard work, but often there are “Over and Above” work requests for unanticipated repairs
• These requests require a certain level of on-hand inventory in order to continue working on aircraft and minimize delays
• Each piece of inventory requires an inventory cost investment
Project objectives are to improve processes managing materials by
• Reducing total inventory investment without increasing stockout risk
• Increasing the visibility of supplier-related data (e.g. lead time) to reduce the need for additional buffer inventory
• Reclassifying work requests to encourage holding predictable inventory requirements

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Description:

The objectives of this project are to Identify accumulations of residual inventory, determine sources of / reasons for residual inventory accumulation, quantify the financial impact of residual inventory, and associated materials management costs, and Improve processes within which materials are managed to realize potential savings

Results:

Residual inventory was contributed to 65% of total material management costs. Surprisingly, we did not observe much commonality between parts used on the 11 different aircraft under study, but looking at higher-level material groups and types does narrow down the scope of where residual material is coming from-this is an area worth further investigation. A ‘what-if’ analysis showed that if the quantity of residual material could be reduced by 50% to 99%, LM would realize a 33% to 67% savings on overall material management costs. Recommendations for achieving potential reductions in residual inventory include the following: improve visibility of true residual material within the company’s computer-based inventory system, releasing leftover material from its ties to a particular aircraft/project within a timely manner, and utilizing more traditional forecasting and MRP techniques to achieve further residual inventory and materials management savings.

Final Report:

 

Supporting Files:

 

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