How Pelico helped an Aerospace plant save cash and reduce shortages
The Delivery Assurance Manager at a plant that produces and services equipment for military aircrafts and helicopters explains how adopting Pelico’s Operational Intelligence has solved the data management problems that used to bedevil supply management operations and has empowered teams to take ownership of the Supply Chain.
The background: Plant seeks data intelligence to manage a Supply Chain in constant flux
Between Original Equipment production and Maintenance, Repair and Overhaul operations, the plant handles some 300 different pieces of equipment.
The Delivery Assurance Manager, Thomas P., manages a team of 7 and is responsible for managing supplier orders as well as the associated risks and issues.
The limitations of a makeshift information system used to make it extremely challenging to keep up with endless fluctuations in stock levels and customer order requirements. A lack of real-time visibility delayed response to important issues and hampered ability to focus on priorities.
Until the adoption of Operational Intelligence solution Pelico.
Challenges and requirements
1. The limitations of homegrown tools
In the past, the plant used an Excel-based system developed in-house to extract and review the spare part orders placed with external suppliers. Because the homegrown platform proved hard to use and maintain, the extracts had to be performed manually by one of the two people who knew how to operate it. The extract process, which took quite some time, was only performed once a week. Cherry on top, the information tended to be inaccurate, as the system sometimes failed to retrieve key information (such as acknowledgements of receipts from suppliers). Not convenient, you’re saying? Wait for it.
2. When rigid information systems fail to keep pace with constant fluctuations
Changes in customer orders are a fact of life for the plant. A client may turn out to need flight actuators three months ahead of schedule; another customer might decide to delay the time-to-market of an aircraft due to market conditions and push out the equipment delivery date accordingly. Such volatility in client orders compels Supply Managers to constantly reschedule their own supplier deliveries. In case of customer order pull-ins, it is crucial to bring forward supplier deliveries to be able to produce the equipment within the new deadline. On the other hand, the cost of inventory requires postponing supplier delivery whenever pushed-out purchase orders delay the need for spare parts and materials. Long story short, supply orders have to be pushed backwards, moved forwards or even canceled on a daily basis.
Imagine handling this manually based on a weekly extract that became outdated in a matter of hours. It could take several days for the Supply team to be notified of an issue with inventory levels. Decisions were made based on stale data, and action was taken in response to issues that were no longer current.
3. Prioritizing issues & actions
True, the Delivery Assurance Manager and his team were eventually informed of major changes in customer orders (for instance the cancelation of a large servomechanism order with huge financial impact). But they still had to spend significant amounts of time searching for information in order to understand the ins and outs of the problems and to figure out the appropriate response.
Besides, when faced with the need to reschedule dozens of different orders across dozens of different suppliers, it is key to prioritize and tackle the most urgent first. Without reliable and fresh information, pinpointing the most pressing problems was like finding the proverbial needle in a haystack.
The Benefits of Pelico
1. Empowerment leads to quality leap
The plant implemented Pelico for Supply Chain in late 2020. With Pelico’s platform, shared clarity has driven tremendous improvements in team productivity and work quality.
Where the Delivery Assurance Manager used to manually draw up a scheduled list of supplier calls to be made (to reschedule orders, confirm delivery dates, negotiate adjustment in batch sizes, and so forth), team members now have a tool that they can access and manage themselves. They are empowered to see what needs to be done directly and to address the issues in a more proactive manner.
The system provides real-time visibility into the order book and stock movements, eradicating the delay between the occurrence and the reporting of events and enabling swifter response.
Because of the energy saved on information collection, reconciliation and processing, the Supply Management team is free to focus on the right issues. They now have the time to properly address the most impactful order problems, the most urgent missing parts. In sum, they’re actively tackling issues instead of struggling to identify them. The result? Performance leaps in the quality of supply management operations.
2. Prioritization and smart recommendations assist in problem-solving
In addition to making problems visible, Pelico provides a timeline to prioritize them, highlighting the most urgent and impactful issues. A daily personalized email provides each user with an overview of their priorities to help them focus on the most impactful actions, and delivers recommendations. This smart recommendation system is also integrated into the platform. Pelico’s AI powers personalized user spaces with intelligent next-best action recommendations for each team member, suggesting optimal scenarios to improve alignment between demand and inventory, reduce missing parts and inventory, and mitigate operational risk.
3. From reactive to proactive supplier relations management
Back when supplier updates and negotiations were conducted based on partial or outdated information, it was frequent for the Supply teams to request emergency adjustments (typically to push backwards or move forward a shipment) — only to call back a few hours later to cancel or change the request in the light of newly-available information. As everyone knows, crying wolf only works for so long. The constant twists and turns damaged the relationships with key business partners and harmed the overall credibility of the plant. At the end of the day, suppliers were much less eager to respond to urgent requests. Now, the Supply teams can base supplier conversations on solid hard facts and better anticipate the needs. Thereby re-establishing the foundations for efficient partnerships with the supplier ecosystem.