The scale of aerospace parts distribution is impressive, with $22 billion spent annually by civil and military customers. More than 80% is driven by MRO activity - aircraft checks, engine overhauls, modifications, line maintenance and the like - where speed and avilability are often of paramount importance. The balance of distribution feeds production lines.
Distribution boasts two distinct business models. The first is outbound distribution, where the distributor holds inventory and manages the flow of parts from an OEM to its customers. Distributors are often more responsive than OEMs in fufilling low quantity/high mix orders. They also simplify supply chains, as customers can deal with a single distributor rather than hundreds of parts suppliers. The other business model is inbound distribution, where a distributor manages the procurement and flow of material into a manufacturing or MRO facility via Kanban and kitting services.
In 2006, Boeing purchased Aviall, which at the time was the industry’s largest independent distributor. Last year, Boeing bought KLX, a leading distributor of consumables and expendables. Some parts manufacturers are nervous that Airbus and Boeing are acquiring too much knowledge about their aftermarket activities.
Read the full story, "Parts Distribution: The New MRO Battleground," at www.mro-network.com.
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