How smarter distribution models can help MROs overcome aviation supply disruptions.
Aviation was one of the industries hit hardest by the worldwide COVID pandemic. More than half of the world's aircraft fleets were stored, or flew less often in the past year. As a result, aircraft maintenance, repair, and overhaul (MRO) spending was 31% less in 2021 than it was in 2019. Global aviation analysts at OliverWyman predict that MRO demand will return to pre-pandemic levels by 2023, but they also say it's unlikely to achieve pre-COVID growth rates for decades to come.
Two-thirds of respondents expect MRO demand to recover to 2019 levels in 2022 or 2023, in line with OliverWyman's forecast of Fleet recovery to pre-pandemic levels in 2022, with MRO following closely." - OliverWyman MRO Survey 2021
Good news, bad news for MRO operations
Although COVID dramatically reduced both air travel and MRO industry revenue, it looks like the tide has finally turned. Manufacturers are once again ramping up production to meet growing demand for new aircraft, and putting older fleets back into service.
The bad news is that parts suppliers are still under intense pressure from aviation supply chain backlogs, the "great resignation", and most recently the war in Ukraine. Business may be picking up, but now it's harder than ever to obtain critical parts and distribute them where and when they're needed.
Across the board, COVID-related shortages are creating longer lead times and driving up prices. Without a reliable supply of parts, MROs can't guarantee that they can meet increased demand for routine and emergency maintenance. The "parts in ports" phenomenon, when critical components and sometimes even entire aircraft are stranded on ships, is creating more uncertainty in an industry that's already struggling to regain its footing.
Brick-and-mortar parts distribution centers offer more flexible fulfillment options
In recent months, major manufacturers like Airbus publicly announced their intentions to accelerate production in the year ahead. Airbus CEO Guillaume Faury also put his suppliers on notice that they need to get creative to keep up with his plans.
In response, MROs and parts distributors are looking for new ways to handle inventory and make service and distribution more reliable. Some report sending their own employees to retrieve critical parts and drive them across the country to factories because there aren't enough commercial truck drivers to handle the loads.
A turnkey fulfillment center close to an airport can give parts sellers more distribution capability to generate revenue faster without the traditional investment in real estate and internal support systems.
Here are five ways a physical walk-in parts distribution center can turn easy and reliable access to critical aircraft components into a competitive advantage:
- Reduce your costs: minimize downtime, cut warehouse overhead, and reduce labor expenses with a fully staffed brick-and-mortar fulfillment location in close proximity to MRO service providers.
- Improve efficiency: provide more and easier access for airlines and freight providers and facilitate prompt shipment of priority orders to aircraft owners and operators.
- Expand your reach: penetrate new markets with a stand-alone or shared distribution facility in areas where you'll get the greatest exposure.
- Advance economic growth: turn underserved airports into profitable aviation hubs for a single service provider.
- Improve customer satisfaction: give MROs and other customers more pick-up and delivery options, including 24/7 ordering and walk–in service for expedited deliveries.
About CURA Resource Group
Cura Resource Group combines the strongest assets of online and in-person order and fulfillment services in one place. Our roots are in last-mile logistics, and we're known for opening fully staffed walk-in distribution centers that make it easier to deliver fast-moving time-sensitive inventory to customers in hard-to-serve locations.