Pacific Airways

1004 WordsNov 21, 20115 Pages
Robert Traylor and Paul Barwell are tasked with optimizing supply chain management for Cathay Pacific Airways (CX), one of the most profitable and respected airlines in the world. In order to maintain its outlook on growth in this increasingly competitive industry, their team must reduce operating costs while improving their customers’ flight experience. Since spare components represent most of the inventory value in their supply chain, spare parts operations should be the key focus. From the airline’s perspective, the key supply chain issues are as follows: the high level of inventory and the total value that it represents (US$350 Million); Compliance with required statutory regulations (FAA (US), EASA (EU, and CAD (HK)); high…show more content…
Any potential new suppliers should be screened using well-defined Key Performance Indicators. A similar approach should be taken for the spare parts that fit into the Critical quadrant. Long term contracts should be pursued in order to guarantee the supply and higher inventory levels should be maintained to ensure that operations are not disrupted. For both part classifications, additional resources should be dedicated to forecasting. While Aeroxchange is a step in the right direction, it is ineffective because it does not predict unscheduled removals, which account for 79% of all removals. CX should apply some rigor to the preventative maintenance of its critical parts so that repairs and replacements are far more predictable. CX should manage the parts and suppliers for these categories because they affect the normal operation and service of the aircraft. For non-critical spare parts (i.e. anything that falls into the Tactical and Leverage quadrants), CX should explore joint ventures with selected key suppliers or source from distributors in order to drastically reduce the total supplier base. CX should also maximize its use of the PMA program where available, and use procurement cards and/or blanket orders to minimize transaction costs.They could use an integrated materials management approach (for Tactical parts) with an aviation services company# to both increase service levels and parts availability as well as increase support for repair and

More about Pacific Airways

Open Document