Merging companies, moving and culling unneeded inventories can be both energizing and stressful.
There is the excitement generated from new opportunities and the prospect of creating something superior—but there is also the sheer hard work of overcoming unexpected obstacles to make this happen.
Just look at the proposed merger ofand . Instead of celebrating the creation of one of the world's largest airlines in August, the two are scheduled to appear in a U.S. District Court on Nov. 25 to defend anti-competitive concerns.
While the pace of airline mergers might slacken, consolidation in the aftermarket will continue. Kellstrom Materials is a good example of why.
When Kellstrom purchased AirLiance Materials fromon May 17, it combined two medium-sized companies into one large entity with complementary product lines. Clients gained a broader channel of distribution, more parts choices and new customer interfaces.
The deal happened quickly, and Roscoe Musselwhite, Kellstrom Materials president and CEO, immediately started looking for the synergies.
In doing so, he says that “you discover stuff you don't need,” like DC-9 air stairs. “We've been scrapping a lot of material we once loved,” Musselwhite notes, so that the prime commercial material located at Kellstrom's Florida facility will fit into AirLiance's warehouse near Chicago O'Hare International Airport.
It's like moving to a new house—you realize what possessions you value most—and you purge the infrequently used things because the cost of relocating them is high.
Kellstrom's parts-scrapping is not making a huge economic impact, “maybe a couple $100,000, [but] it's a necessary step,” says Musselwhite.
Kellstrom implemented Phoenix—its enterprise resource-planning system—at AirLiance's facility, and went live with it this month. This was an essential step because it didn't make sense to start the physical process of moving the mapped inventory “loc to loc” beforehand—and disrupt the inventory's data integrity.
Parts are now relocating to Chicago, but Kellstrom's sales staff will remain in Florida. However, they have been visiting Chicago on “cultural exchanges” to cross-pollinate ideas.
The parts marketplace—material valuation, ownership options and distribution channels—has drastically changed since AirLiance formed. “Large holders of inventories in this business are seldom rewarded,” unless it is the right inventory—at the right price, says Musselwhite.
And with repair costs often eclipsing the price of a used part, having the three “rights”—part, place, location—is paramount (see page MR04).
I recently left my home of a decade for a new one, 700 mi. (1,126 km) away, so I acutely understand the energy it takes to cull, pack and move. The same week I was transitioning domiciles, Penton purchased Aviation Week from McGraw Hill—my work “house”—so I doubly understand the human side of undergoing a merger, posthaste. But like Musselwhite, I feel privileged to be at the stage of exploring new possibilities and brainstorming ideas with colleagues old and new.
Change can be disruptive, but it can blow open doors you may not have knocked on before. If you're in the Windy City, knock on my new office door, which is open.
Embrace new ideas and move your company forward.
—Lee Ann Tegtmeier Chief Editor MRO