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Stock Optimisation. Needs for Optimisation. Needs for Optimisation Fabricators and Operators are aware of the increasing needs to optimise costs nowadays Business no longer depends on the sale of the product but also the support throughout its life cycle

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needs for optimisation
Needs for Optimisation

Needs for Optimisation

  • Fabricators and Operators are aware of the increasing needs to optimise costs nowadays
  • Business no longer depends on the sale of the product but also the support throughout its life cycle
    • 30% of the total costs rely on the acquisition of the aircraft
    • 70% of the total costs are consequence of the operation during the life cycle.
  • There is a need to investigate and develop new solutions to impulse customer support to new frontiers
  • There is a need to create new calculation methods to meets the on going needs to optimise logistics.

The services provided by any operator are based on the availability of its aircrafts.

the concept
The Concept

as a Concept

  • A small company with the support of a powerful business group
  • Zero investment
  • Advantages of within the structure of a powerful business group:
    • Include a New Product into the Catalogue
    • Include a New Suppliers into the company´s structure
    • Offer a new product to Current Clients
    • Offer a new product to New Clients
  • Analysis results give the client support in the decision making strategies
positioning in ils
Positioning in ILS

Positioning of in ILS

  • is focused on giving key optimisation support to the provisioning areas of ILS throughout the MRO product cycle.

Maintenance Actions

ANALYSIS

PREPARATION

MEANS

PRODUCTION

SUPERVISION

Formation & Experience

Operator Quality System

Regulatory Environment

Procedure Organisation

GSE Provisioning

Spares Provisioning

A/C Configuration

Maintenance Program

Technical Publications

product concept
Product Concept

Catalogue of Products

NO AVAILABILTY = NO PROFIT

NO SPARES = NO AVAILABILITY = NO PROFIT

NO GSE = NO AVAILABILTY = NO PROFIT

  • Optimisation of the products within the ILS supply chain by Improving Availability.
  • Turn Around Time (TAT) Optimisation
  • Investment optimisation by Selling of Overstock
  • Support given to the client’s Decision Making Strategies
  • Critical GSE Identification
  • Support to the Strategically Purchase Planification
  • Forecast to buy Critical Equipment
basis of the theory
Basis of the Theory

Basis of the Theory presented by

  • OVER-INVESTMENT IN GSE IN PROVISIONING, OR RISK OF GSE SHORTAGE?
case study 1
Case Study 1

Support Organisation under study

  • Stations
    • GSE Suppliers (x4)
      • Supplier 1 – Demand Factor: 16%
      • Supplier 2 – Demand Factor: 20%
      • Supplier 3 – Demand Factor: 26%
      • Supplier 4 - Demand Factor: 38%
    • MRO Centre (x1)
    • Operator (x2)
    • Fleet Allocation (x2)
  • Fleet
    • 31 x Aircraft 1
    • 15 x Aircraft 2
    • 6 x Aircraft 3
case study 11
Case Study 1
  • Input Data for the Stations
  • Input Data for the Aircrafts
  • MOEs to Study per GSE

is pioneering of the calculation of all the GSE “usability” parameters. So, the data above will not be provided by the company, will define all variables according to the support organization data and circunstances.

analysis of efficiency
Analysis of Efficiency

Current GSE Provisioning Strategy of the Analysed MRO

analysis of efficiency1
Analysis of Efficiency

Current GSE Provisioning Strategy of the Analysed MRO

POINT 1 (RISK OF SHORTAGE) :

ROS: 49,88%

GSE INVESTMENT : 7,070,000.00 USD

analysis of efficiency2
Analysis of Efficiency

Efficiency Improvement vs. Cost Oblique Optimisation

Current GSE Provisioning Strategy

CE CURVE

POINT 1 (AVAILABILITY) :

Availability : 79,13%

GSE INVESTMENT : 7,070,000.00 USD

OPTIMUM POINT (AVAILABILITY):

Availability: 95,83%

GSE INVESTMENT: 5,570,000.00 USD

Optimized GSE Provisioning Strategy

analysis of efficiency3
Analysis of Efficiency

POINT 1 (RISK OF SHORTAGE):

ROS: 49,88%

GSE INVESTMENT: 7,070,000.00 USD

OPTIMUM POINT (RISK OF SHORTAGE):

ROS: 11,54%

GSE INVESTMENT: 5,570,000.00 USD

Risk of Shortage vs. Cost Oblique Optimisation

analysis of efficiency4
Analysis of Efficiency

Efficiency Improvement & Cost Optimisation

Among the optimum points curve, and depending on the customer´s needs, three different kinds of optimizations can be applied:

  • VERTICAL OPTIMIZATION: Higher availability of aircrafts can be ensured with the same investment.
  • HORIZONTAL OPRIMIZATION: Lower investment provisioning strategy can be defined to reach the same A/C availability.
  • OBLIQUE OPTIMIZATION: Higher A/C availability with a lower investment in GSEs.

We take into account the third option. Chosing a point and comparing it with the point obtained before concerning the current strategy, we can create a Cost / Efectiveness Diagram in which the scenario is Current GSE Provisioning Strategy VS Optimized GSE Provisioning Strategy.

analysis of efficiency5
Analysis of Efficiency

Comparing Point1 vs. the Optimum Point

Δ(A) = 95,83 - 79,13 = +16,7%

ROS

Δ(ROS) = 11,54 - 49,88 = -38,34%

A

Δ(ROS) = 11,54 - 49,88 = -38,34%

analysis of efficiency6
Analysis of Efficiency

Oblique Optimisation GSE Provisioning

analysis of efficiency7
Analysis of Efficiency

Efficiency Improvement vs. Cost Horizontal Optimisation

POINT 1 (AVAILABILITY):

Availability: 79,13%

GSE INVESTMENT: 7,070,000.00 USD

H-OPTIMUM POINT (AVAILABILITY):

Availability: 79,97%

GSE INVESTMENT: 1,765,000.00 USD

analysis of efficiency8
Analysis of Efficiency

Horizontal Optimisation GSE Provisioning

RADICAL GSE INVESTMENT REDUCTION CAN BE REACHED BY PERFORMING THE HORIZONTAL OPTIMIZATION. THE AVAILABILITY LEVELS WON´T BE AFFECTED.

analysis of efficiency9
Analysis of Efficiency

Efficiency Improvement vs. Cost Vertical Optimisation

POINT 1 (AVAILABILITY):

Availability: 79,13%

GSE INVESTMENT: 7,070,000.00 USD

H-OPTIMUM POINT (AVAILABILITY):

Availability: 97,04%

GSE INVESTMENT: 6,850,000.00 USD

analysis of efficiency10
Analysis of Efficiency

Vertical Optimisation GSE Provisioning

VERTICALLY, THE EFFECTIVENESS IMPROVES HIGHLY, BY KEEPING THE PREVIOUS GSE PROVISIONING INVESTMENT RANGE.

analysis of efficiency11
Analysis of Efficiency

Critical Needs in Time

Resource Allocation Strategy with Time

  • Expensive GSEs
    • For GSE39 – PN39 the Optimum Stock Level has been analysed to be 7 units. The current stock is 2 units, ie. The company will need to invest in 5 units to maintain 95.83% availability
    • 5 x GSE39 = 5 x 100,000.00 USD = 500,000.00 USD
  • Large GSEs
    • For GSE43 – PN43 has an extremely large size, taking into account that the Optimum Stock Level has been analysed to be 2 units. We need to study for how long will the company maintain 95.83% Availability with just 1 unit of GSE43.
analysis of results
Analysis of Results

Analysis of the Oblique Stock Results

  • Analysis the current effectiveness of the MRO centre & GSE provisioning investment.
    • Current Availability = 79.13%
    • Current GSE Provisioning Investment = 7,070,000.00 USD
  • Simulation 1: Optimised point curve calculated for current MRO status vs. range of investment.
  • Oblique Optimisation: The effectiveness is improved , GSE provisioning investment reduced
    • Optimised Availability: 95.38%
    • Optimised GSE Provisioning Investment: 5,570,000.00 USD
  • Stock:
    • Optimum Stock Levels found for each P/N
    • Current Stock vs. Optimised Stock compared defining Stock to be purchased and sold. Immediate earnings potential = 1,780,000.00 USD
  • Simulation 2: Calculation of the GSE purchase Delay Allowance
    • High Expense GSE (GSE39): 1.2 years of delay gained
    • Large GSE (GSE43): 0.56 years of delay gained
analysis of results1
Analysis of Results

Analysis of the Horizontal Stock Results

  • Analysis the current effectiveness of the MRO centre & GSE provisioning investment.
    • Current Availability = 79.13%
    • Current GSE Provisioning Investment = 7,070,000.00 USD
  • Simulation 1: Optimised point curve calculated for current MRO status vs. range of investment.
  • Horizontal Optimisation: The effectiveness is improved, GSE provisioning investment reduced
    • Optimised Availability: 79.97%
    • Optimised GSE Provisioning Investment: 1,765,000.00 USD
  • Stock:
    • Optimum Stock Levels found for each P/N
    • Current Stock vs. Optimised Stock compared defining Stock to be purchased and sold. Immediate earnings potential = 5,305,000.00 USD
analysis of results2
Analysis of Results

Analysis of the Vertical Stock Results

  • Analysis the current effectiveness of the MRO centre & GSE provisioning investment.
    • Current Availability = 79.13%
    • Current GSE Provisioning Investment = 7,070,000.00 USD
  • Simulation 1: Optimised point curve calculated for current MRO status vs. range of investment.
  • Vertical Optimisation: The effectiveness is improved, GSE provisioning investment reduced
    • Optimised Availability: 97.04%
    • Optimised GSE Provisioning Investment: 6,850,000.00 USD
  • Stock:
    • Optimum Stock Levels found for each P/N
    • Current Stock vs. Optimised Stock compared defining Stock to be purchased and sold. Immediate earnings potential = 215,000.00 USD
what if analysis
What if Analysis

What if Analysis

  • Another optimisation service is the What if Analysis. This study will simulate different scenarios in which we can vary customer´s utilisation factors of the different aircrafts.
  • “HOW WOULD THE EFFECTIVENESS CHANGE IF THE CUSTOMER 1 WAS OPERATING ITS AIRCRAFT 1 FLEET AT 0,5, AND CUSTOMER 2 WAS OPERATING ITS AIRCRAFT 3 AT 0,5 RATE AS WELL?”

UTILF = 0,5