Aerospace Manufacturer Partners with New Breed Logistics to Improve Distribution of Service Parts
Situation
Several converging factors prompted a leading aerospace manufacturer to reevaluate its logistics operations for service parts distribution:
- The company was experiencing increased demand for its products, creating a need for added production capacity in facilities where spare parts were stored
- Military engagements around the world increased airtime for the company's aircraft and the need for service parts
- Maintenance kits were often shipped with missing parts, delaying service events
- Ongoing efforts at cost control and improved inventory management identified opportunities to streamline service parts distribution while lowering costs
The company sought a logistics partner with extensive aerospace experience that understood mil-spec packaging and the other unique requirements of managing a critical spares program in the aerospace industry.
Strategy
New Breed Logistics was chosen to manage the company's service parts distribution. The operation ships thousands of orders per month around the world from a central facility. Key strategies employed:
- Centralized operations from three facilities into one. This freed up manufacturing space for increased production. RF-based picking was implemented, as well as a focused effort to standardize and streamline processes. On-site industrial engineers from New Breed Logistics continuously evaluate ways to improve process efficiency and accuracy.
- Revamped kitting process. Certain maintenance events require automobile-sized kits that contain thousands of parts. The prior kitting process resulted in incomplete shipments and inefficiency at the receiving end since parts were poorly organized in the crate. New Breed Logistics developed a new kitting process that involved creation of hundreds of sub-kits that get individually packaged, inspected and labeled, making the task of pulling parts into inventory at the maintenance depot more efficient.
- Standardized packaging. Use of numerous packaging suppliers resulted in little standardization of packaging. Also, the quality and delivery records of some suppliers were inconsistent. New Breed Logistics reduced the number of packaging suppliers, increasing business with quality suppliers and standardizing a smaller number of package sizes. This helped to streamline the packaging process and resulted in higher quality packaging with consistent availability.
Results
- Reduced turnaround time for critical parts orders from 10-12 days to less than three days
- Reduced work in progress inventory by more than $8 million
- Increased manufacturing space by moving parts operations to an off-site facility
- Substantially improved order fill rates
