Inventory Management Based on Component Reliability Toward Uncertainty of Demand in Aircraft Spare Parts

For the purpose of reducing the inventory costs, aircraft spare parts must be handled within a short Turn Around Time (TAT) due to these parts have unique characteristic with expensive prices. And for efficiency purposes, it is possible to reduce the aircraft maintenance costs by preparing the optimal spare parts supplies, because the aircraft maintenance in aviation industry has costs around 13% of the total operational costs. In the event of component failure while an aircraft is operating, the reliable access to parts and components is essential for airlines to maintain consistency in operations. Instant part availability, however, is not always guaranteed due to various kinds of factors. How airline operators must explore to minimize the disruption via various approaches they can adopt to manage the inventory. An event that delays occurred in an airline's operation is a vital or ‘no-go’ aircraft component failing during flight is also essential. This can result in an aircraft-on-ground (AOG) situation, with the aircraft unable to operate until repaired. The knock-on effect can include penalties, lost revenue and shipping costs. Inability to operate an aircraft even for a half-day can have large cost implications. While it is not possible to predict and prevent all component faults and defects, the sophistication of data analysis today, alongside evolution of parts supply processes, has allowed a number of failure and AOG events to be mitigated. Therefore, to ensure the maintenance effectiveness and use of several profitable assets, controlling the aircraft inventory becomes an important activity. The excessive spare parts inventory will cause high inventory costs and make an influence to cash flow. Meanwhile, if spare parts insufficient, it can cause flight delays or flight cancellations with high cost and a negative impact to the image of the airline. The right inventory model to get a right balance is important, because the aviation industry requires a large number of spare parts and some of which have expensive prices. A reliable inventory management must have regular stock controls or routine cycle counts. In order to control the spare parts inventory in the aviation as well as the maintenance department, there are several requirements that must be met. And to meet these requirements, a software solution is needed to substitute manual input into the administrative system. The research in this paper is focus on studying the stochastic inventory management toward uncertainty of demand in aircraft spare parts based on component reliability analysis, so that we can give data input to purchasing department for procurement.