A Link in the Supply Chain

A Link in the Supply Chain Views from Aircraft Parts Distributors By Michelle Garetson April 1999 This is the kind of day where I don't want to see the boss in the hangar," grimaces Pete Schroeder, director of maintenance for...


Ken Cooper agrees. "AAR's small and midsize FBO customers are not carrying as much inventory. If they can get it the next day from the distributor, then they'll do that."

Botana adds, "We have to forecast with manufacturers and customers. Manufacturers may only be making a certain model or type of product in a certain month, so we have to know that to build in Ôcushions' to be prepared for customer requests."

Paper Cuts
The increased use of electronic trading for parts and components and an increase in customer requests for additional documentation is causing concern with parts traceability. Online documentation is not accepted by the masses yet, but hopefully will be in the near future. Original documents for parts are still the only salvo for customers, so in the meanwhile, distributors need to accommodate those demands.

"One of the most significant industry changes has been the rapid increase in customer requirements for additional documentation with each order, such as FAA Form 8130-3 and manufacturers' certificates of conformance," says Jim Quinn. "The customers ask for them to protect themselves in the current regulatory environment."

Varga's paperwork states that they need traceability documentation with all items. "We almost always get our stock from the manufacturer and those parts all come with certification," says Corsbie. "In those instances where we receive parts or components from other resources, if they are received without proper documentation, they will sit in Ôquarantine' until the paperwork comes through.

Quinn explains the consequences of asking for too much. " A key customer challenge is the continuing demand for documentation that is flatly not required in all cases. The need to generate unnecessary paperwork drives up the cost of doing business, and inevitably is reflected in the price of parts and in additional surcharges."

R U Y2K OK?
There is no escaping this question this year. While those in all industries are scrambling to avert any problems with first, the September 9, 1999 (9/9/99) conundrum, and ultimately the January 1, 2000 test; these parts distributors are confident that they are already, or will be, compliant and things will be business as usual when the calendar turns. Y2K statements are currently on all of their web sites, except Varga's.

"We've received letters on a daily basis as to what we're doing about the situation," explains Corsbie. "We also receive standard forms from customers to spell out our Y2K policies. Varga is implementing all new software and hardware in-house to ensure as smooth a transition as possible and to assure customers that we are concerned about the issue and are taking action."

ISO 9000
Parts distributors fall under the service category of ISO 9002 for certification from the International Standards Organization. There are other types of certification such as AS9000 — Aerospace Basic Quality System Standard, the aerospace version of ISO-9000, and QS-9000, a quality assurance standard specific to management; however, ISO-9000 is the darling of process standardization for those seeking quality assurance from businesses — especially in markets overseas.

"AAR is working towards certification and feels it's an important business decision," states Cooper. "It is certainly important for trade overseas and with the airlines."

Quinn agrees but also adds, "Aviall is ISO-9002 certified. Customers should realize that ISO certification has value to them in that it ensures traceability, and that all procedures have been documented and followed on a continuing basis."

API is in the process of getting ISO 9002 certified and did very well in its preliminary audit at the end of February. "We felt it would help us overseas and it has afforded us more opportunities with regard to large contracts, claims Botana. "The contracts we have received as a result have already outweighed the costs involved for ISO certification."

Varga's Corsbie gave a slightly different view. Varga is not yet rated, but will probably do so in response to customer demands. "Some large customers are requiring their vendors to have ISO certification, says Corsbie. "A company has got to become approved in order to be a player, yet it's not always enough. There are so many different types of certification, there should be one standard."

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