How MRO teams can think and act faster to navigate complexity
An estimated 7.5 million flights have been canceled over the first semester of 2020 because of the sharp decline in passenger traffic. Not exactly the best time for airlines to invest in brand-new crafts, is it?
In fact, the COVID-19 outbreak has brought about a paradigm shift across the aerospace industry. Where passenger airlines used to turn to aircraft manufacturers for Original Equipment (OE), they're now mainly seeking Maintenance, Repair and Overhaul (MRO) services to keep ageing aircrafts in working order and make the most of their existing fleets.
For industrial services providers, increased demand for MRO operations — which are amongst the most complex industrial activities — comes with its share of challenges.
A high-stakes business
In aerospace, avionics, or defense, the shelf life of some mission-critical components (like the seals holding together landing gear systems) is fixed by regulation, either based on running hours, distance traveled, or time elapsed. In addition to those parts subject to scheduled replacement at set intervals, other sub-components, like wiring, may require functional checks and replacement due to wear-out. And, in case of failure, equipment obviously needs to be repaired or changed.
High levels of criticality characterize MRO activities. What's at stake for the clients is nothing less than business continuity. Except in global pandemics, maximizing fleet availability is a matter of economic viability. To do so, airlines typically require third-party MRO providers to maintain or repair their equipment under extremely tight deadlines.
The consequences of any day or hour of delay in delivery are significant because it prevents the airline from meeting its commitments to its customers. Have you ever arrived at the airport only to discover that your plane had been canceled or delayed for "technical issues"? The story behind your missed business meeting or spoiled holiday experience may come from an MRO service company that couldn't perform the repair in time and didn't dispatch a critical part needed for your plane to take off. Most people anxiously pacing the overcrowded boarding gate don't know this. Actually, they couldn't care less. They're thinking: "I'll NEVER EVER fly company X again." And the airline will certainly not shy away from blaming the MRO provider for the financial and reputational damage (from both that one missed flight and the domino impact on the rest of the flight schedule).
In a fiercely competitive MRO market, any unnecessary delay or unexpected hiccup can not only gnaw at cash flow and revenue but also translate into lost accounts and declines in market share. So minimizing turnaround time and providing speedy, dependable service is essential.
A world of complexity
With so much at stake, you'd figure that MRO service providers would consistently deliver on time. If only they could.
High volatility requires extreme supply chain agility
The first and foremost MRO challenge is a lack of visibility on inbound work. While it is possible to anticipate scheduled maintenance operations for long-standing clients, there is no way to predict equipment failure that'll require repair or replacement accurately.
Besides, when receiving equipment (e.g. the THSA that provides stability for the aircraft) to be overhauled, you might know in advance that you'll need to change specific gaskets, but you'll only realize upon disassembly whether other sub-components require servicing, repair or replacement.
Then, how can you figure out the nature and quantity of spares you need in store? MRO providers typically service multiple clients operating multiple makes of crafts, which each involve hundreds of specific parts. As stockpiling excessive amounts of spares will inflate your holding costs, you can't keep everything in stock. Plus, you may be unable to repurpose some unused parts due to limited shelf life or regulations forbidding the use of older parts on newer equipment.
To crown it all, some parts to be repaired or replaced belong to legacy systems and are no longer in production. Because clients want recently minted components, shopping for antiques on eBay is just not an option. You need to have those parts custom-produced or to produce them yourself — here again, in the right quantities. Also, those legacy parts should be handled using the specific tools and techniques that were used back in the day. This means that you need skilled labor who masters the art of, say, soldering in the '80s fashion.
Even if you have the right parts and the right skills at the right time, you're not out of the woods yet. As we said, time is of the essence. Working under extremely tight deadlines leaves no room for error. The planning and completion of the sequence of repair operations needs to be clocked to the minute. Initial inspection disassembly, diagnostic, part availability check, supply, repair, assembly, quality control… Every step along the line needs to be performed within the allotted time, and any deviation from schedule can be fatal.
This is why, after planning and scheduling operations, MRO managers typically spend the bulk of their time tracking progress, visiting each workstation to ensure everything is going as planned and staying on track to timely completion. When (not if, when) problems such as missing parts and bottlenecks arise, they need to prioritize the issues and come up with immediate mitigation strategies — for instance, ordering the parts.
Because of the diversity of the tasks to check, control, and monitor, MRO managers tend to detect problems too late. Small dela s pile up and eventually require costly emergency measures — having people work overtime to produce the missing components or catch up on the repair and assembly backlog, hiring special express transportation services to dispatch the equipment where needed, etc… With no guarantee whatsoever that those desperate measures will suffice to meet delivery commitments.
A data management problem
Planning accurately and ensuring proper completion of MRO operations require cross-analyzing vast amounts of data from multiple feeds.
To determine which skills and parts will be needed, you must first perform a predictive demand analysis. Based on historical trends, insights from Customer managers, or contextual information, you need to make probabilistic estimates of inbound demand for every possible part across every piece of equipment.
Then, you have to compare these projections against stock levels, factoring in the upcoming stock movements (spares that are scheduled to be consumed, planned supplier deliveries) just to understand what you should order.
Finally, upon reception of actual customer orders, you need to match part requirements with available supplies, which requires granular real-time visibility into inventory, taking into account each part's age and shelf life.
One problem is that most of that information is typically not readily available to MRO managers.
" Although their activities are interrelated and interdependent, the Supply Chain, Production, MRO, Quality, and Customer teams working in the same facility usually don't use the same processes or data management systems."
Data is usually scattered and siloed across teams. As a result, the MRO people need to liaise with various departments and stakeholders to access the information they need. They need Procurement and Supply Chain insights to assess stock levels and analyze parts fitness. They have to get in touch with Production teams to schedule or reschedule part production orders or to discuss the allocation of shared spare parts supply. They need input from Engineering to check whether legacy parts that can't be procured could be replaced with newer ones, from Quality Control to ensure that tools pass inspection and calibration tests, from Customer Management to negotiate achievable delivery deadlines, and so forth. More often than not, MRO teams end up with partial or outdated information despite their best effort.
Another problem is that, traditionally, MRO teams are not equipped with the appropriate data processing capabilities. When it comes to complex predictive modeling based on large sets of fluctuating data, there's only so much you can do using Excel.
Accordingly, prioritizing the supplies to be used and sourced to minimize wastage, taking action to replenish component stock levels, and finding mitigation strategies to solve problems (for example, checking the earliest possible delivery date from an external supplier) is extremely time-consuming. This leads to overdue, suboptimal decisions and a severe impact on the bottom line.
Pelico: connecting the dots
MRO teams need a solution consolidating all the information at the plant level to provide a comprehensive, real-time view of supply, demand, and operations, with intelligent analysis capabilities to make sense of the data.
That’s Pelico. Our Operational Intelligence solution empowers MRO teams to cut through the fog of uncertain operations and achieve predictable outputs. Acting as an intelligent layer that sits on top of transactional systems (ERP, PLM, Time Tracking…), it reconstitutes a digital twin for operations. An AI engine crunches the data to detect and anticipate issues and offers insights for smart prioritization.
"Pelico provides real-time flawless and granular visibility into resource demand and capacity. Because the diverse data feeds are now integrated and consolidated, the Pelico platform automatically optimizes spare parts allocation, factoring in all relevant requirements (such as the respective ages of parts and equipment)"
Collaborative-by-design, the platform improves consistency and cohesion at the plant level and gives collaborators a single source of truth where to collaborate efficiently.
Where Production and MRO used to work in silos, they now share common, consolidated data sets that make it possible to optimize trade-off decisions for shared resources. Customer Relations managers now have access to a history of turnaround times for MRO operations, helping them negotiate realistic customer deadlines.
The platform tracks the status of the various pieces of equipment — including those that external subcontractors handle — and automatically detects blockers along the MRO workflow. By associating ROI calculations and impact assessment to each problem it helps prioritize issues and focus users on the most valuable actions. It will also suggest the next best action to be taken to improve stickiness to the MRO schedule.
"All in all, our clients have recorded a threefold reduction in turnaround times, and on-time delivery rates nearing 100%."
All that in a user-friendly environment, delivering the seamless, almost playful experience that today's smartphone users have grown to expect from technology.