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Collins Aerospace Case Study

The Supply Chain Consulting Group Supports Collins Aerospace To Implement Inventory Management Tools

Goodrich is a global supplier of systems to aircraft and engine manufacturers. They supply a wide portfolio of products – from actuation systems and landing gear to sensors, safety and engine control systems.

The Collins Aerospace division focussing on Engine Control and Electrical Power Systems (ECEPS) is a world leading supplier and aftermarket service provider, through both its in-house facilities and its joint venture with Rolls-Royce PLC. Collins Aerospace offer 200 product families supplying nearly all sizes and types of aircraft – from corporate jets to the largest commercial jets, and helicopters to military platforms. Applications can range from supplying 90,000 lb thrust turbofans to the smallest turboshaft and Auxiliary Power Units (APUs).

Collins Aerospace engaged The Supply Chain Consulting Group (SCCG) team, to undertake a complete review of their inventory planning approach, specifically within their UK Marston Green Spares Distribution and Maintenance facility.

The objective of the project for the consulting team was to work with Collins Aerospace and provide the logic, calculations and models to clearly justify and minimise the inventory, but also ensure sufficient inventory was in place to meet the required service levels. In addition, the consulting team were tasked with helping Collins Aerospace understand the approach adopted, so the internal team could repeat the process periodically, reflecting changes in the Collins Aerospace demand profile.

“Whilst we were already achieving excellent service levels, and had clear inventory targets to maintain that service, I wanted to better understand and analyse the link between the service level and the inventory cost…”
Global Spares Director – Collins Aerospace”…the SCCG team offered us a clear methodology to optimise our inventories, but also to demonstrate the exact relationship between inventory costs and service. They gave me confidence that with their support we would be able to continue our focus on delivering excellent service, but also minimise the working capital costs associated with inventory.”

The SCCG consulting team worked alongside the Collins Aerospace planners, to develop a revised inventory policy, with clear rules for ABC classification, minimum inventory levels and reorder quantities. This inventory policy was then translated into a dynamic MS Excel model that automated all required calculations, making it quick and easy to recalculate inventory levels periodically.

The model developed not only assisted Collins Aerospace, by automating the required calculations, but also allowed the team to test the sensitivity of changes in service levels and supplier lead times, against the cost of the inventory.

“I’m delighted with the approach and models that the SCCG team delivered…not only do we now have the process, rationale and models to periodically optimise our inventories, but I can also use the models as a key management tool. I am now able to demonstrate and manipulate the links between inventory levels, service targets and ultimately operating cashflow.” Global Spares Director – Collins Aerospace.