Can you explain your standardization approach?
Terry Stone (T.S.) - Satair Group Middle East: In the airline industry, asset downtime is very expensive. Every minute counts. Some parts of an airplane, such as doors, wings, flats and engines, can be standardized. This is not the case for the interior of the plane which is specifically customized by each customer. As a subsidiary of AIRBUS, we are one of the world's leading providers of aftermarket solutions for the civil aerospace industry. We have inventories hubs with stocks of parts which can be quickly dispatched as needed in every region where our customers operate: Dubai, Hamburg, Copenhagen, Washington, Atlanta, Miami, Singapore and Beijing.
Fabien Monleau (F.M.) - BOURBON: The marine industry is not as advanced as the air sector regarding spare parts availability. However, we are duplicating their business model as we have realized that fleet downtime costs are huge compared to repair costs. We have stocks of spare parts in every region where we operate, so that we can reduce the maintenance period. It is especially critical in the coast of West Africa, where we operate 75 % of the time, as it is very difficult procure spare parts locally.
of the 1,700 engines in stock represents the 5 main engine models of BOURBON's fleet
T.S. - Satair: At Satair Group, we have a shipment spare part availability requirement of four hours or less. In some cases, spare parts can eve be hand carried by someone from the warehouse to the aircraft's location.
F.M. - BOURBON: Like Satair Group, our objective is to optimize the availability of spare parts so that we can reduce the maintenance time of our vessels. We are trying to achieve it in all our regions, especially in West Africa. This is also more difficult as we have up to 50 different designs in our fleet. However, thanks to standardization, we now have 10 standardized designs representing 80 % of the fleet. These parts are available in our inventories and can be supplied very quickly. However, our fleet is not fully standardized as vessels are sometimes tailor-made for some customers.
T.S. - Satair: It is also important to highlight the following difference between our two business models. In the aerospace industry, the aircraft manufacturer supports the aftermarket sales while this is not the case in the marine industry. We, at Satair Group, establish long term relationships with our customer and do not walk away for the responsibility of aftermarket support.
F.M. - BOURBON: Things are indeed different in the marine industry as we do not get support from the vessel shipyard where the vessel has been built. This is why we, as the vessel operator, need to compensate by stockpiling spare parts.
Who is Satair Group ?
Satair Group enters into exclusive or primary distribution arrangements for aerospace component manufacturers and supplies the parts to the customers (airlines, MRO). With more than 200,000 different part numbers in stock, Satair Group is one of the leading global providers of aftermarket solutions for the civil aerospace industry. Satair Group sells a large number of spare parts to all the companies operating AIRBUS aircrafts.
Why is the spare parts availability strategic?
T.S. - Satair: Planning for availability is really the key for Satair Group and our customers because it is impossible for 100% of spare parts to be available. In our industry, assets undergo regular maintenance which means that certain events can be anticipated. When an unexpected breakage occurs requiring a replacement, the manufacturers manage the situation in house. In a worst case scenario, when a customer needs a piece that you do not hold, you can obtain it directly from your production line.
F.M. - BOURBON: Even if holding stocks represents a huge investment, it remains key. The main objective of spare parts availability is to reduce technical downtime. In 2010, our downtime level was approximately 3.8 % and it is now down to around 1.1 %, a level close to airline standards. This is because we are now able to send spare parts on short notice to West Africa. In Angola or Nigeria for example, it can take up to 15 days to ship a part from Europe to the vessel, so the loss of revenues can be huge!
"At Satair Group, we have a shipment spare part availability requirement of 4 hours or less. In some cases, spare parts can even be hand carried by someone from the warehouse to the plane's location."
Terry stonemanaging director of satair Group middle east
Which services do you provide to your clients?
T.S. - Satair: We have repair exchange and lease programs – just to mention a few - for aircraft spare parts. We also have programs for small spare parts which are frequently used so they can be available at short notice. In addition, we offer a Plug and Play service and client inventory management. In our partnership with Airbus, we provide a service where all the components inside the aircraft can be detached and replaced completely.
F.M. - BOURBON: We offer similar services but internally to our joint-venture partners as we do not work for external clients. However, we sometimes manage the inventories for external partners, as we rent our own warehouses. This is particularly true in West Africa. We believe standardization is the only way to reduce inventories. At BOURBON, we secure only the standardized fleet. There are approx. 5 million inventories per design. Thus, for 54 vessels, you can share 5 million parts, which is much better than investing 5 million for one vessel. As soon as we know that the spare part is available somewhere in the world and that we can get it on short notice, we no longer hold it in stocks, thus reducing the value of our inventory investment.
"We believe that standardization is the only way to reduce inventories."
fabien monleaumaintenance & sourcing director of bourbon
T.S. - Satair: I agree with Fabien on the key role of standardization and would add that standardization reduces the customer’s financial investment in the inventory they have to carry. If you standardize your equipment, you may need just two parts for a certain reference, while if you do not, you may need more spare parts! We stock parts in anticipation of our customer not having inventories and we provide them with an estimation of the stock they should have.
F.M. - BOURBON: Satair Group’s business model allowing its client AIRBUS to focus on its core business rather than on spare parts stock management, seems very interesting to us and BOURBON is willing to go in that direction.