The topic of logistics and supply chain management has attained significant importance on account of globalisation of organization features. No industry can manage to achieve Expense effectiveness and significant performance ranges devoid of investing professional sources to leverage from better supply chain management functions.
handling spare parts from the aviation marketplace, As a result, has usually been a challenge for all airline operators, and Cathay Pacific is not any exception.
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3. What exactly are the advantages & drawbacks for Cathay Pacific to implement third party logistics (3PL) associates for their fix management and logistics management? Exactly what are the criteria for Cathay Pacific to decide on her 3PL companions for fix management & logistics management?
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Aviation Spare Parts Supply Chain Management 09/382C Optimisation at Cathay Pacific Airways Limited two A bolt to get a desk chair expenses a greenback. precisely the same bolt for any chair on an aeroplane would Price tag thirty bucks. It is the fact that magnitude of change. all the things for an aircraft is massively highly-priced. - Paul Barwell, supervisor of procurement, Cathay Pacific3 The obstacle for that management staff was to check out possibilities for optimising spare parts supply chain management and instigate procedure advancement. The Aviation Spare Parts market handling spare parts inside the aviation marketplace experienced generally been a problem for airline operators because the aviation supply chain was unusually difficult. The aviation business was regulated by Global and native authorities like the US Federal Aviation Administration (“FAA”), the ecu Aviation protection Agency (“EASA”) as well as Civil Aviation Department of the Government of the Hong Kong Special Administrative area. Mechanics Qualified by the FAA ended up necessary to Look at all non-deferrable repairs before a aircraft’s departure and validate that each one rules have been achieved. In addition, the FAA had the authority to ground a plane if airline operators didn't finish the deferrable repairs inside the stipulated timeframe.four All suppliers of aeroplane spare parts have been needed to possess Exclusive authorized certifications and formal protocols, which ended up stipulations that indicated assumption of accountability in the event of a mishap. Turnaround time for repairs was vital, as highlighted by measurable and non-measurable charges. Besides common passenger payment for flight delays such as hotel accommodation, it Value US$sixty for every moment to help keep an plane to the runway.five What's more, there existed a hazard that buyers could possibly be upset or maybe change to other Airways if delays prompted them to lose their connecting flights. hence the price of aircraft delays was a crucial conclusion generating element in engineering.
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Aviation Spare Parts Supply Chain Management 09/382C Optimisation at Cathay Pacific Airways Limited 8 among the participating airlines [see Exhibit 8]. details such as the types of spare parts availability and suppliers lists was available throughout the Aeroxchange program, Cathay Pacific forecasted long term demand for parts on projected fleet utilisation and someone part’s life cycle. nonetheless, this only represented Element of the image as the strategy lacked the opportunity to forecast demand from customers arising from unscheduled removals, which counted for almost 79% of all removals. . Logistics Management Given that ideal top quality and quantity of inventory was accessible and the stock was processed and fixed accordingly, powerful supply chain management was depending on efficient logistics management. Logistics management On this context was the apply of minimising the length and amount of procedures needed to move spare parts from one particular place to a different. Cathay Pacific’s logistics management arm was accountable for running the cargo of ordered stock from warehouse to aeroplane and also to and through the repair service centres. as a way to decrease lead periods, Cathay Pacific normally transported parts individually amongst repair service properties and Cathay Pacific hubs. even so, to be able to minimise prices, Cathay Pacific consolidated shipments of spare parts which were less sensitive to steer instances. In Australia, for example, a fixed import tax was billed on just about every shipment. Cathay Pacific would as a result weigh enough time and costs related to enabling various spare parts to generally be accrued for the objective of consolidating them into one shipment.
Aviation Spare Parts Supply Chain Management 09/382C Optimisation at Cathay Pacific Airways Limited 7 Inventory Management Inventory management for Cathay Pacific is identifying the proper quantity of spare parts and substance at the best time and at the right spot to meet up with predicted and unanticipated requires to keep up plane functions at the desired provider level on the ideal expenses - Engineering treatment guide, Cathay Pacific checking of inventory turnover, which was an indicator of the efficiency of inventory management, was Therefore an integral ingredient of Cathay Pacific’s inventory management process. Timely stock replenishments have been needed after reorder details had been reached. an intensive technique, Ultramain, was in spot for management of elements replacements and newly acquired spare parts [see show six and 7]. Cathay Pacific also required to minimise inventory holding prices. In principle, an exhaustive stock was required to attain a assistance degree that could satisfy all of the probable desire of its aircraft. for the reason that this was monetarily and operationally infeasible, Cathay Pacific experienced to function in probably the most economically dependable way and strike a equilibrium concerning the simplest stock degrees to hold on to relative to the corresponding support stage. To guard from the danger and price of extended downtime, Cathay Pacific Usually built in a buffer inventory and, Subsequently, additional cost was incurred to engineering operation generally speaking. Even with Cathay Pacific’s efforts to deal with their spare parts stock within an exceptional way, they continue to encountered instances the place a specific section was desired and no inventory was offered. Coping with this type of problem was generally known as “scarcity management”. scarcity management was a process of sourcing parts that, for just one rationale or another, had been unavailable to fulfill the expected requires.
19 When Cathay Pacific required a spare aspect quickly and none was readily available, they explored quite a few alternatives to meet the urgent need: • Aircraft-on-ground (“AOG”) orders have been utilized in conditions where a Cathay Pacific aircraft was grounded and will not acquire off with out a particular aspect. When an AOG get was put, the portion can be shipped by using identical-working day Categorical delivery. • Cathay Pacific could retrieve the required spare component by borrowing it from Yet another airline. • Pool financial loans had been yet another way Cathay Pacific was equipped to control part shortages. By signing a deal While using the Worldwide Airline complex Pool, Cathay Pacific was granted access to a network of above a hundred Airways with which they could share spare parts when in need with out incurring a surcharge. • Cathay could also borrow a part from one of its other aircraft. fix Management On average, Cathay Pacific managed over eighty,000 repair service orders a year, or over seven,000 repair orders per month.20 following deciding whether or not faulty parts have been repairable or not, Cathay Pacific experienced to ascertain no matter whether their current repairers experienced equally the expected capacity along with important capability to maintenance the full variety of elements mounted on its plane. To this stop, Cathay Pacific compiled a databases of around three hundred of the whole world’s main aeroplane spare component repair service shops. Repair shops had been chosen depending on the types of spare parts the shop specialised in, high-quality, value and service amount. In 2000, Cathay Pacific collaborated with thirteen other Airways to develop Aeroxchange, a program created to aid the sharing and exchange of data, like repairer sourcing, 19 corporation interview on 15 December 2006. twenty Company job interview on 15 December 2006. for your special use of T. Fallatah This document is approved for use only by Tareq Fallatah in Logistics for Aviation & Aerospace (Spring 2014) taught by Li Zou from January 2014 to April 2014.
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Aviation Spare Parts Supply Chain Management 09/382C Optimisation at Cathay Pacific Airways Limited six Spare Parts by Criticality Cathay Pacific additional subdivided their spare parts by classifying the above mentioned 5 groups broadly into important parts and non-critical factors, which could even more be labeled by the criticality codes 0, 1, 2, 3 and four [see show three]. vital parts have been parts which were necessary to running an aircraft properly and successfully. they may make the difference between a safe landing and also a mid-air catastrophe. These parts were ordinarily really costly and complex. An illustration of a vital ingredient was the US$one million Electronic motor Controller17. Non-important parts encompassed all parts from the aircraft that were not important to the helpful and safe Procedure of the aeroplane. There was a diverse number of non-critical elements, from in-flight enjoyment methods to nuts and bolts. Expendables and consumables certified as non-significant parts in the majority of cases. Nevertheless, there have been instances where these types of parts have been thought of crucial factors, such as a dowel necessary to hold a rotable element in operational form. The crucial and non-vital dimension can be placed on all 5 classes of supplies [see show four].18 recent tactics in Aviation Spare Parts Supply Chain Management The spare parts supply chain operations at Cathay Pacific flowed from procurement and stock management to repair management and logistics management. Cathay Pacific’s internal supply chain tactic had been driven by ensuring excellent and service on the aircraft Procedure in the most Value economical way. Procurement The supply chain of spare parts at Cathay Pacific was an extremely sophisticated, big-scale Procedure with Many suppliers and distributors.
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