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Parts by the Hour –How to Increase Availabiliy for the Customer

Spare Parts Business Platform 2013Dr. Holger Voss

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Agenda

Spares Logistics at Eurocopter

Eurocopter Facts & Figures

Parts by the Hour – An Overview

Success Factors for PbH Contracts

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Agenda

Spares Logistics at Eurocopter

Eurocopter Facts & Figures

Parts by the Hour – An Overview

Success Factors for PbH Contracts

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Eurocopter an EADS Company

Cassidian AstriumEurocopterAirbus

Eurocopter Germany

(5000 Emp.)

Eurocopter France

(8500 Emp.)

Eurocopter Subsidiaries(5000 Emp.)

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Eurocopter – Facts & Figures

Turnover Group 2011: 5,4 Bio. €

… thereof Commercial: 53% Governmental: 47%

Kundendienst

Hubschrauberproduktion

F&E und sonstiges

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EC135 (1996)

AS350 (1976)

AS355 (1982)

AS365 (1980)Single

Light Twin

Twin medium Medium/Heavy

AS332 (1985)

EC225 (2004)

EC145 (2002)

EC130 (2001)

EC120 (1998)

EC155 (1999)

Eurocopter’s Commercial Range

EC175

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Agenda

Eurocopter Facts & Figures

Spares Logistics at Eurocopter

Parts by the Hour – An Overview

Success Factors for PbH Contracts

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Spares Logistics Processes

Back OfficeMaking parts available (defining collections and ensuring availability)

HandlingPhysical flow of parts in warehouse and transportation

Front OfficeInterface to customer and following orders in the system

SupportAccompanying flow to ensure system availability and performance

Key Elements in Eurocopter‘s Spares Logistics Systems

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Eurocopter‘s Global Network

Hong Kong

USA

Paris

MARDON

ALB

Logistics Platform

Mother Company

Subsidiary

Chile

Brazil

Mexico

Canada

UK

South Africa

Russia

Romania

Japan

Australia

Indonesia

Philippines

Korea

Singapore

Malaysia

China

Saudi Arabia

Germany

France

2247 HC

4116 HC

565 HC

1163 HC

405 HC

690 HC

965 HC

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Specifics Characteristics for Eurocopter

Spare Parts Collection Impected by

� Size of Fleet by HC Type

� Variety of Customer Missions

� Age of Fleet (up to > 40 years)

Logistics Capability of Micro Operators

Scheduled & Un-ScheduledDemand

Specific Aviation Regulations� Need of Documents

62,3%

24,3%

10,4%

2,8%0,2%

0%

10%

20%

30%

40%

50%

60%

70%

1 2 bis 4 5 bis 19 20 bis 99 > 100

Helicopter Number per Customer%

of

Cu

sto

me

rAnzahl Hubschrauber je Kunde

An

teil K

un

den

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Helicopoter Types & After Sales

Overview of HC types relevant for Spares Logistics (ECD)

… whereat: 1 HC Type = Multiple Variants!

1970 1980 1990 2000 2010

Bo 105

EC 135

BK 117

EC 145

EC 145 T2

Production Phase

After Sales Phase

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Agenda

Eurocopter Facts & Figures

Spares Logistics at Eurocopter

Parts by the Hour – An Overview

Success Factors for PbH Contracts

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Premium Services at Eurocopter

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Services Offered by Eurocopter

Premium Service

Standard Service

Cu

sto

mer

Exp

ecta

tio

n

Spares Business

Warranty RbH**

* Repair & Overhaul** Repair by the Hour*** Parts by the Hour

R&O*PbH***

ComponentsPbH

Nose2TailPremium

PBH

AOGRush

Routine

Premium Services

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Premium Service – Overview 1/2

Service Concepts in Spares Logistics

RbH (Repair by the Hour) Contract

• Contract for repair of selected components � guarantied lead times

• Covering scheduled & unscheduled events

• Service paid by flight hour � monitor budget

PbH (Parts by the Hour) Component Contract

• Contract for availability of selected components � guarantied lead times

• Covering scheduled & unscheduled events

• Service paid by flight hour � leveling of cost

PbH Nose to Tail Contract

• Contract for availability of all parts (components, hardware, consumable, …)� guarantied lead times / availability of Helicopter

• Service paid by flight hour � leveling of cost

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Premium Service – Overview 2/2

Service Concepts in Spares Logistics – Next Step

Premium PbH Contract

• Target:Improve customer satisfaction

• For selected customers only

• Provide Value Added Services

• Full coverage – Nose to Tail

• Service paid by flight hour

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Agenda

Eurocopter Facts & Figures

Spares Logistics at Eurocopter

Parts by the Hour – An Overview

Success Factors for PbH Contracts

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PbH Success Factors – Overview

PbHSuccess Factors

Parts Pool

MonitoringOrganization

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Differentiation between Repair & Rotable Pool Processes

Repair of Non-Pool Part

• Specific part (a) is being returned

• Estimation of cost and time for repair

• Repair of defect part (a) after customer agreement

• Repaired part (a) is sent back to customer

Part a

Part a

EurocopterR&O

Customer

defe

ct

rep

air

ed

Part a

Part c

Part ePart d

Part b

Part f

Eurocopter Pool

Customer

Premium Services & Parts Pooling

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Allocation of Parts Pool

Reactivity Requires Balanced Allocation of Parts

Customer Demand Availability of Parts

• Rotable Pool is not dedicated to single customer, but all contract customer

• Synergies help all pool customers

Allocation of Pool Parts in the Network – Reaching Customer Proximity

• Consideration of different stocking locations (incl. Consignment Stocks)

• Global optimization instead of local planning

• Reduction of global stock level

• Right balance between central and de-central pool parts

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Pool Sizing & Planning

Prerequisite for Availability – Pool Sizing

Rotable Pool Management requires dedicated forecast & planning

• Having the right amount of parts (new or used) available is crucial

• Having too many parts is a waste of money

• Considering specific parameter (TAT, MTBUR, Penalties, …)

• Considering unscheduled repair & scheduled repair events

Data Quality is key for Pool Sizing

• Availability & Reliability of data

• Choosing the correct parameter setting & forecasting algorithm

Forecasting Tool to Fit Needy

• Integrate Pool Planning & Forecasting in dedicated Tool

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Parts Pooling – Relevance

Rotable Pool is Key for Premium Services

Reduction of Cost• Cost advantage for Customer � Repaired or used part is cheaper than new part

• Cost advantage for Eurocopter � Provide cheaper used part (PBH), reduced inventory

Reduction of Lead Times• Lead time reduction for replacement part � much shorter for rotable pool than repair

Increase Availability • Short term reaction on part request

• Pool parts as additional resource for critical items

… and for which parts?• High value items (> 500€)

• Reparable items

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Performance Monitoring in PbH

Monitoring of PbH Performance

KPI enable Performance Monitoring

• Performance towards customer � e.g. On Time Delivery (OTD)

• Internal Performance � e.g. Turn Around Times (TAT), Open Cores, New-Used-Ratio

Tools for Performance Monitoring

• Centralized KPI Dashboard for all sites

• Utilize Additional Information �Specific Tracking for Rotable Pool

Definition of Performance Targets

• Service Level Agreements between EC and Repair Station on TAT

• Targets on KPI to push effort

Open Cores

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Rotable Pool Monitoring

Specific Importance for Rotable Pool Performance

Reverse Logistics to refill the rotable pool

• Core Unit return from Customer to EC pool

• Often long period between order and return

Monitoring of Rotable Pool Parts Flow by using Transport Tracking

• Visual Management Tool for Customer and Eurocopter

• Monitoring of Transport from Customer to Eurocopter

• Monitoring of Transport from Eurocopter to Customer

• Flow to & from Repair Station to follow up internal TAT

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Organization for PbH

Organizational Set Up to Provide Premium Services

One Customer Interface for all Orders

Dedicated Team for Premium Service Customers ���� 1 Face to the Customer

Reduction of Interfaces ���� Improved Communication Internally

Introduction of Customer Manager ���� Clarification of Critical Issues with Customer & Priority Setting

… in Addition: Building up of Contract Know-how

Order Admin

Segment Premium

Order

Manager

Customer

Manager

Segment End Customer

Segment Network

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Eurocopter‘s PbH Services

Efficient PbH Services help to Improve Customer Satisfaction – 3 Dimensions lead to Success

PbH Services require Service Contracts

Success Factor 1: Rotable Pool Management including Specific Planning

Success Factor 2: Organizational Set Up must match Customer Requirements

Success Factor 3: Reporting & Monitoring of Rotable Pools is mandatory

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Contact:

Dr. Holger Voss

holger.voss@eurocopter.com

Thanks for Your Attention!