Effective Supply Management: How Initial Provisioning of spares can create a culture of efficiency

Solutions and services | Mar 11, 2020 | By Satair | 3 min read

When entering into Initial Provisioning (IP) of spares—the fundamental process aimed at securing the availability of spare parts—it is important that operators also see it as an opportunity for preparing for more efficient material management.

Going beyond the Recommended Spare Parts List (RSPL) or contracts for component support, Initial Provisioning of spares involves complex technical and commercial evaluations with dramatic consequences for the airline's operation and profitability.

Understanding the buy-back options

It is not uncommon during the IP process for the customer, IP providers and OEM's to work in discounts and credit offers. This may seem like an efficient use of a customers upfront investment budget but can lead to overstock if not sensibly employed.

When is Initial Provisioning the right option for you?

In most material management scenarios, over-stocking spares contribute to an increased total cost of ownership. With the option for buy-back however a customer is protected from the financial burdens of over-stocking.

However, it might be that not all providers of IP follow this type of agreement, so IP customers must understand their buy-back options to avoid lower-cost parts liquidation of over-stock at a later date. 

Consequently, a broader understanding of buy-back options also ensures that an airline's operators and procurement officers can manage near-accurate levels of spares stock.

A culture of data reliance

Initial Provisioning of spares is an effective way for supply managers to address uncertainties that they might face during the 10 to 18 months of the operation of an aircraft. We have discussed in many articles, such as Predictive maintenance & the road to a proactive supply chain and Survival strategies: Supply chain management in the aviation industry, the future of supply-side material management and MRO is going lie firm in the realm of data analytics. This means that operators and supply managers are going to know how to understand and rely on data predictions to foresee and prepare for future operations.

Ensuring Success: Planning your Material Readiness Roadmap

Relying on the parts predictions from the RSPL during the IP phase can develop a culture of reliance and trust in predictive data models and tools—which can extend into the use of predictive maintenance tools like Airbus' Skywise or Honeywell Forge beyond the IP phase.

Centralised Inventory, Decentralised Data

In most cases, Initial Provisioning of spares will consolidate all required inventory into a centralised location, and this has tremendous long-term effects. Shifting all inventory into one place, organised under distinct part numbers, catalogued company-wide, and tracked digitally will allow for easy access to parts tracking and spend visibility. This methodology of material management is viable long after the IP phase has concluded.

The Definitive Guide to Initial Provisioning of spare parts

Creating a culture of efficiency with initial provisioning of spares

While working through an effective IP strategy has its immediate effects on the initial operation phase of an aircraft or fleet, it also has a trickle-down impact on the culture of airline operations and material management.

Is Initial Provisioning an investment in peace of mind?

It will secure a deeper and more thorough understanding of aircraft maintenance and supply management. It will help operators pinpoint, understand, and act accordingly to any contractual clauses on parts offers—as well as to see beyond the face value of such offers and focus on long-term relationships and joint value creation