How Pelico empowers MRO teams to think and act faster to navigate extreme complexity
An estimated 7.5 million flights have been cancelled 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 mostly 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 among 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, on distance travelled, or on time elapsed. In addition to those parts subject to scheduled replacement at fixed intervals, other sub-components, like wiring, may require functional checks and replacing due to wearout. And, in case of failure, equipment obviously needs to be repaired or changed.
MRO activities are characterized by high levels of criticality. For the clients, what’s at stake is nothing less than business continuity. Times of global pandemics excepted, airlines need to maximize fleet availability what’s a matter of economic viability. So they 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 huge, because it prevents the airline from meeting its commitments to its own customers. Have you ever arrived at the airport only to discover that your plane had been cancelled or delayed for “technical issues”? The story behind your missed business meeting or spoiled holiday experience may very well be a MRO service company which couldn’t perform the repair in time and didn’t dispatch a critical part needed for your plane to take off. Most of the people anxiously pacing the overcrowded boarding gate don’t know this. Actually, they couldn’t care less. What they’re thinking is: “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, any unexpected hiccup can not only gnaw at cashflow and revenue, but also translate into lost accounts and declines in market share. So it is essential to minimize turnaround time and provide speedy, dependable service.
A world of complexity
With so much at stake, you’d figure that MRO service providers would consistently deliver in 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 accurately predict equipment failure that’ll require repair or replacement.
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 to have in store? MRO providers typically service multiple clients operating multiple makes of crafts, which each involve hundreds of specific parts. You can’t keep everything in stock, as stockpiling excessive amounts of spares will inflate your holding costs. Plus you may not be able to repurpose some of the unused parts due to limited shelf life or to regulation forbidding the use of older parts on newer equipment.
To crown it all, some of the parts to be repaired or replaced belong to legacy systems and are no longer in production. Because clients want recently-minted components, shopping 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 in use back in the days. 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, there is 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 make sure everything is going as planned and stays 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 multiplicity of the tasks to check, control and monitor, MRO managers tend to detect problems too late. Small delays pile up and eventually require taking 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… 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.
In order to figure out which skills and parts will be needed, you first need to perform 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 possible 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 the age and shelf life of each part.
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 in order 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 in order 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 in order 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 MRO teams are traditionally not equipped with the appropriate data processing capabilities. When it comes to complex predictive modelling based on large sets of fluctuating data, there’s only so much that you can do using Excel.
Accordingly, prioritizing the supplies to be used and sourced to minimize wastage, taking action to replenish component stock levels, finding mitigation strategies to solve problems (for example checking the earliest possible delivery date from an external supplier) is extremely time-consuming and leads to overdue, suboptimal decisions. With severe impact on the bottom line.
Pelico: connecting the dots
What MRO teams need is a solution consolidating all the information at the plant level to provide a comprehensive, real-time view on supply, demand and operations, with smart analysis capabilities to make sense out 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 flawless and granular visibility into resource demand and capacity in real time. Because the diverse data feeds are now integrated and consolidated, the system automatically optimizes spare parts allocation, factoring in all relevant requirements (such as the respective ages of parts and equipment). "
The collaborative-by-design platform improves consistency and cohesion at the plant level.
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 are handled by external subcontractors — 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 achieve objectives.
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.