Fast 5: Technology's Role In Driving Efficiencies
Nauman Saeed, chief operating officer at aftermarket parts platform SkySelect, talks about the growing emphasis on utilizing new MRO software solutions for new incoming fleets and navigating industry challenges such as skilled workforce shortages as technology gets more affordable and easier to scale.
Are you seeing a greater role for software solutions that help MRO organizations compensate for their workforce shortages?
Yes. Given the market environment, organizational and cost efficiency are major objectives among airlines, MROs, OEMs and distributors. The best way to achieve both objectives is by automating recurring tasks such that operations can effectively scale with business and market requirements. This is especially true as the market ramps up globally post-pandemic to 2019 demand, in terms of flight hours and beyond. Cash constraints, supply chain volatility and human capital shortages compound the need for operational efficiency.
With an eminent shortage of human capital in our industry, and specifically in the procurement arena, organizations are seeking ways to address requirements and meet their respective shareholder return. Specifically, when reviewing MRO software solutions, one area to consider is the implementation timeline and the resource requirement to complete such tasks. There are legacy solutions in the parts procurement area that are highly complex and time-consuming, taking six to 12 months of implementation and resource bandwidth. On the other hand, new disruptive technologies are available "on-demand," i.e., you can get up and running without significant implementation expenses. It only takes a few hours to see the cost and process efficiency gains. This is achieved through artificial intelligence (AI)-based technology, and a backend service infrastructure providing sourcing, procurement and order management on-demand.
How is the industry digitization process going?
Digitization, which is a recurring theme among organizations, in essence is business process automation, where emerging technologies such as AI and machine learning are poised to help aviation stakeholders speed up repetitive and intensive tasks. Today, more so than ever before, technology is getting more affordable and easier to scale, while enabling current human capital to focus on strategic tasks of the organization.
Post pandemic, we are seeing an uptick in next-generation aircraft deliveries as older fleets are retired. What impact is MRO software playing in these transitions?
As older models retire and newer ones are introduced to fleets, this means the demand for specific parts is constantly changing. With an already resource constrained environment, procurement organizations continue to manage manual processes, experience longer PO processing times, and ultimately make it suboptimal to maintain strong cost and working capital control. For instance, in light of the pandemic, our customers have been requesting OEMs and distributors for expansive customer-specific catalogs, providing price and lead-time stability to enable an auto-PO process, mitigating manual process steps. Both because of limited resources and excessive PO processing times due to manual steps.
From an OEM and distributor perspective, it is highly encouraging to have parts loaded into a customer ERP through catalogs; however, the supply base also faces the dilemma of internal supply chain cost and lead-time volatility for catalog-published parts. Hence, the number of catalog parts seldomly, if ever, meet the complete customer demand requirements.
As an alternative, newer generation solutions are supplementing existing customer catalogs, with the ability to source ‘fresh’ price and lead-time on-demand per RFQ, for millions of parts, while providing an automatic sourcing recommendation (through AI), order placement, delivery tracking and proactive delay management. This is unique as it opens the customer’s buyer bandwidth to manage strategic and high-value sourcing efforts.
Are you seeing many opportunities in the current environment?
Whenever there is a great challenge or problem, within it also lies a great opportunity. And that is what exists for MRO software. There is a tremendous opportunity to transform the entire aviation industry for all stakeholders from airlines and OEMs/distributors.
Are current supply chain disruptions affecting the software market in any way?
Market challenges and needs are driving the software development roadmap. Software companies are adding new functionalities to address pain points caused by supply chain problems. For example, the supply chain crisis is causing long backlog issues. To address that, software should highlight long lead times, so organizations can do better planning. For example, at SkySelect we offer on-time delivery improvement through proactive delay management, powered by AI.
Another major challenge in the supply chain is the need for more visibility. Emerging technology is tackling this issue by digitizing processes that have traditionally been conducted offline. Not only does this greatly improve efficiency, but it also documents the entire procurement process from A to Z, leaving a digital trail where paper documents were lost, misplaced or difficult to find in the past. By bringing this extra level of accountability, all stakeholders can improve their position in the supply chain.