Aviation is a vast industry generating close to $600 bn annually for the tens of thousands of suppliers, service providers, operators and various types of regulators that work within it. Somehow, this large network of parties with competing interests managed to design and abide to a common set of industry standards which are used in designing systems, components and aircrafts, as well as define how said entities work together and share information. How was this possible?
‘One system to rule them all’
Airbus A380, the world’s largest passenger airline, is made up of more than 4 million individual parts, produced by 1,500 companies from more than 30 countries. When built, components are brought in by smaller Airbus airplanes, a fleet of Airbus ships, and trucks driving on special roads paid for and constructed partly by Airbus and partly by the French government. Granted, not all airplanes require such an impressive supply chain and infrastructure, but many do. And all of this needs to work smoothly, especially when an aircraft requires maintenance or a replacement spare part. Often times while an aircraft is still in the air, the necessary part will already be on its way towards the destination airport so that once the plane lands it can be fixed immediately. None of this would be possible without a common system, supported and used by all stakeholders, which is able to identify and manage all the spare parts involved.
If all spare parts have a manufacturer number, GTIN codes, and hundreds of other standards, how come this is still such a big issue for other fields? Why has Aviation succeeded where other industries have failed? In this article, we will explain the origins of MRO standardization in Aviation and the challenges that other manufacturing companies are still facing until this day.
How far has aviation come?
Up until the late 80’s spare parts identification wasn’t considered an issue at all in Aviation. Companies relied on the experience and knowledge of their maintenance engineers, which was enough for the most part. Unfortunately, this didn’t last. Airplanes became more complex and the world itself became more interconnected. As the scope continued to expand, many realized that keeping this vital knowledge in a silo is inefficient.
Around the same time, several airplane crashes caused by below-standard or outright counterfeit parts, led to an international outcry and the industry was forced to take swift action. Even Air Force 1, which is considered the best maintained plane in the world, was discovered to still contain counterfeit parts as late as 1995. These events drove the standardization within Aviation. The concept of Maintenance, Repair and Overhaul (MRO) was born. Spare parts were registered according to strict regulations and laws were drafted to enforce that safety rules are followed correctly.
The solution that the Aviation industry had implemented was to use a unique part number for every spare part – registered, documented, and traceable throughout its entire lifetime. The system is in fact so effective that since 2005 no accidents of major airlines can be attributed to incorrect spare parts!
What can other industry sectors learn from this approach to identify spare parts?
The fact that Aviation has been able to take control of the MRO process, should be a wake-up call for any industrial manufacturer and be taken as an opportunity. After all, in terms of MRO, production facilities are just a set of machines, consisting of and configured with components, very much like an airplane. In aviation the stakes are extremely high, because people’s lives are involved. But, the significance for all industries to control their MRO is growing. Liability rules are getting stricter, consumers demand more transparency, and defect products can seriously harm your brand. However, for the industrial world in general, the MRO problem is much more complex, because unlike a plane, production lines have an almost infinite number of configurations that are almost always unique per plant and per production line.
Whereas in the aviation industry there are ‘only’ about 2 billion spare parts and 5000 manufacturers, globally, that number is exponentially larger. It’s hard to find exact numbers but from my experience at a couple of leading European manufacturers, they typically have between 30K and 200K spare parts per site, with surprisingly little overlap between sites.
Manufacturers are taking notice and efforts to improve quality and efficiency of maintenance through registration of spare parts has been going on for quite some time. But the sheer number of parts and manufacturers make it very unlikely that this will ever be as effective as it is in aviation. A global standard across all industries that everyone will adhere to? Keep dreaming!
Information that is vital for one company is irrelevant for another, and in the end, all you will produce is a ‘one size fits no one standard’. For instance, if you are working with inflammable materials you would like to know whether the part can cause sparks, but if you produce food, you’d be more interested whether there are any toxins in that same part. Even if specialised industries such as pharmaceutical or electronics, would develop their own standard, there will still be the issue of having to conform to a lot of different data standards. Especially for simple, low value parts like a screw, the data maintenance would be more expensive than the part itself.
Adding to this complexity is the issue of spare parts pricing. The airtight MRO system has led to higher prices in aviation. A simple M10 bolt that could be bought for 2 cents, will cost at least $2 if you buy it with an airworthiness certification. This has also stifled the competition, because only the OEM can certify spare parts. Plotting the same rigorous standards to the manufacturing industry in general, would more than double the MRO expenditure.
So, does this mean that there’s no way out of this MRO nightmare, or as we say at Eraneos: can you break the circle of Bad Product Data? The good news is that with the machine learning and A.I. techniques that are nowadays available, the solution is closer than ever. And it’s affordable, because in addition to the necessary quality improvements, it can also save on costs.
What is a successful approach to taking control of your MRO spare parts? First of all, embrace the disorder and find the overlap and potential in it. Determine what spare part information is relevant for your MRO processes and then work towards having that information present for every item in a concise and structured way. In our MRO Optimization solution, we do this by using a combination of A.I. and machine learning engineering technologies. This allows us to identify and structure the product attributes, and automatically create unique spare part items that contain all the information your business process requires.
If this unique spare parts list is stored and managed in a central data platform, and is retrievable by all stakeholders, congratulations, you are already way ahead of 99% of industry companies! Now you can decide on next steps such as reducing the number of your suppliers or negotiating better price arrangements with them.