The Top Trend Impacting Airline & MRO Material Procurement Results
How many decisions do you think you make in a day? 1. 1,000. 10,000. Think again. It’s estimated that the average adult makes 35,000 decisions…every single day.
Combine that with all the options you have, once you’ve made your 35,000 decisions, and you’ve gone through 100,000 choices.
And that’s the top trend affecting airline and MRO material buyers. Choices. The dire onset of information overload.
Sure, trends like automation, virtual reality / augmented reality, big data, additive manufacturing, or internet of things, are game changing. But today, they don’t have the biggest, immediate impact for you as a procurement professional.
Most maintenance teams don’t have a problem getting the material they need (this varies depending on the product of course). From MEL rotables to high consumption expendables and consumables, the material is at your fingertips.
No, no. It’s the vast amount of choices you have to choose from.
Top Trend Impacting Airline & MRO Material Procurement
As a purchaser, the boss of the material and purchasing department, a supply chain lead, or the leader of all maintenance activities, the trend impacting your results is the choices you have to sift through, day in and day out.
Every choice you make has a real value and a total value
But how are you to ever make the right choice with so many options? You're not.
Most people regard choices as a good thing. Too few choices creates discomfort or unhappiness. Yet, too many choices leads to confusion, the regret of the alternatives not taken, second guessing, and increased total material costs.
Today’s aircraft maintenance world is more complex than in the past. You're dealing with an international supply chain. Adapting is required to be successful. Adapting requires choices.
Yet, the pace of our industry (24/7) is much more rapid than in most. Rapid change requires rapid choices.
Choice Overload
Most airline, MRO, lessor and military maintenance teams are operating in an environment of choice overload. They have too many choices where their choice has been to make a fast, most obvious choice, solely on price.
The breadth, depth, and complexity in today’s aircraft maintenance supply chains have resulted in most supply chain executives experiencing, CHOICE OVERLOAD and the wrong decision dilemma.
Today's choices impact tomorrow's Total Material Costs. You're making multiple $10,000 - $100,000 choices a day, which adds up to Mega-Choices.
These supply chain Mega-Choices will determine if your operation:
- Rises or Falls
- Grows or Shrinks
- Succeeds or Fails
- Prospers or Declines
- Adapts or Maintains Status Quo
- Strengthens or Weakens
Move beyond the realm of choices
As a material and supply chain team, what are you supposed to do?
How will you overcome this hurdle, and help impact your operation and reduce your Total Material Costs?
The answer seems so simple, yet, as we see time and time again, it's very difficult to implement.
- Define what Mega-Choices need to be made. Are these daily ad-hoc purchases, streamlining your high consumption purchases, avoiding PBH and putting cash back in your pocket? If there are many big choices to choose from, sit down and decide on your top 3.
- Assure that all involved really understand the Mega-Choices. Yes, that means you, engineering, maintenance and yes, even finance. ;)
- Understand what choices others have made and why.
- Define choices for Mega-Choices. Would a VMI be a valid choice for high consumption items? Would an integrative forward exchange program be a more realistic choice instead of a PBH?
- Make a choice.
- Implement.
The biggest takeaway is getting out of your day to day choices. Yes, they're important, but make less of them. Work with a trusted material partner, and limit the choices you and your team have to make.
If you're working with a few trusted partners, you'll be shocked at your results.