Internet ordering has spread to aircraft parts
Paul Seidenman/SAN FRANCISCO
If current industry trends hold, the Internet will become a major factor in aircraft parts sales and inventory management. That is the consensus of parts suppliers and re-sellers, many of which have web sites on line or in the planning stage.
Among manufacturers, Boeing Commercial Airplanes Group was a pioneer in Internet-based parts management when, in November 1996, it introduced a parts ordering and tracking web site known as the Boeing PART (Part Analysis and Requirements Tracking) Page. The web page was established to provide the on-line capability to track parts throughout the order life cycle and as an inventory management tool for Boeing's customers.
According to Tom DiMarco, systems director, airline logistics support, use of the PART Page is restricted to firms registered in the company's customer database, such as airlines or independent repair facilities. To use the web site to shop for parts or place orders, customers must have a user ID and password provided by Boeing, but use of the site is free.
More than 725 customers use the PART Page, DiMarco says. Currently, 11,000 transactions - including orders and inquiries - take place daily via the web site. That number continues to rise. "Based on the surveys we do every 60 days, we have found that the number of transactions on the Boeing PART Page grows by an average of 1,000 a day," DiMarco says. "During the first four months of this year, we did as much business with customers through the PART Page as we did during the first 10 months of 1998."
Since its inception, major improvements have been made to the Page. On 1 May, an order revision capability was instituted, giving the users greater control and intervention ability during the order life cycle. The life cycle of an order can be as little as a few hours for an aircraft on ground (AOG), or as much as several months for customers who have determined their long-term inventory requirements.
"The addition of this feature was in recognition of the fact that, especially for those customers which order on the basis of long lead times, a lot can change," DiMarco says. "As those changes take place, they can make appropriate revisions to the order."
In another development, as of 4 July, the PART Page will list parts for commercial aircraft built by McDonnell Douglas before its merger with Boeing. This is being accomplished by folding Douglas' CO-OP automated ordering system into Boeing's SONIC (Spares Ordering Nonstop Inventory Control System). DiMarco says SONIC lists over 4 million part number records, which include information such as pricing, what older part numbers they may have replaced, supplier source and lead times.
"Over 400,000 individual part numbers are stocked at Boeing's Seattle facilities. Bringing in CO-OP for the Douglas-built aircraft will add between 50,000 and 80,000 additional part numbers," says DiMarco. The Douglas parts, he explains, will continue to be stocked at Torrance, California, near Los Angeles International Airport. SONIC is also linked to Boeing's regional distribution centres in Atlanta, Beijing, Dubai, London and Singapore, and to a new centre to open in Amsterdam in the first quarter of 2000.
Boeing has continued to expand the PART Page's delivery status tracking, as the number of carriers used to transport parts to customers has increased.
The PART Page accounts for 30% of Boeing's total parts transactions, while EDI (electronic data interchange) accounts for 55%. (EDI uses mainframe computers linked via dedicated communications lines.) Remaining parts transactions are executed via phone or facsimile.
"The PART Page has led to a rethinking among many of our customers, especially with regard to traditional EDI," DiMarco says. "EDI will not go away, but as a result of the PART Page and proliferation of Internet-based ordering, I think that those who plan to get into EDI technology are reconsidering, and starting to look at the web as their method of choice. This will be particularly helpful to small and medium-size carriers who have not made the investment in EDI systems."
More spare service
Engine manufacturer Pratt & Whitney inaugurated an Internet site for customers in late 1997. Known as "Spares On Line," the system has several features, says John Costello, general manager of P&W's mature engine spare parts centre.
"The web site, which is password and personal identification number [PIN] protected, permits our customers to query new parts prices and availability - by typing in the part number from the Pratt & Whitney parts catalogue - as well as order placement," he says.
Once the order is placed, customers can find out when it was shipped, how much of the order was sent out, and what remains to be shipped. Because customers can specify their choice of shipper, Costello says they can use the site to send the bill of lading number, via hyperlink, to the carrier's web site to track delivery information in real time.
Costello says provisions are in place to cancel or revise orders, or to request any paperwork that might be missing upon arrival at the customer's loading dock. The site provides the ability to download information, on single parts or the P&W parts catalogue, in an Excel format.
"But, even during the ordering process, our customer can e-mail any questions to our customer service representatives by clicking an e-icon on the web site," Costello says. "In this way, the entire transaction can be executed electronically." Late last year, a provision was added known as "Critical Part Promising." Costello says this is especially helpful to customers in AOG or work-stop situations, as the web site will indicate what he calls "a drop-dead delivery date" for the part.
Further enhancements are under study, such as the capability to order surplus and repaired parts directly from P&W. "For those parts, we display a list on the web site, which is updated daily," Costello says. "However, all of those orders must still be done by phone."
He says the manufacturer is studying the possibility of extending the web site to include Pratt & Whitney Engine Services, which is the manufacturer's repair organisation. "In this way, our customers can use the Internet to make price and availability queries," he says.
Internet commerce is also making inroads among parts resellers, including Chicago-based AirLiance Materials, the parts distributor founded last year by Star Alliance partners United Airlines, Lufthansa and Air Canada.
Dave Sisson, president and chief executive officer, says AirLiance has developed its own Internet-based "E-commerce" tool. The site will be accessible via the company's home page, www.AirLiance.com.
"We are taking an incremental approach to the Internet by introducing the system in its simplest form," Sisson says. "This means that, initially, it will show parts availability and price information, and allow the user to request and receive a price quote." While pricing information will be displayed on the web site only for "high volume expendables," rates for higher cost "low volume rotables" will be available via e-mail, fax, or phone.
The enhanced web site will be dedicated to AirLiance's inventory, and password protected. "By the end of this year, we hope to provide prices, technical data, and on-line ordering capability, as well as parts order tracking," says Sisson. "We will also make illustrations of the parts and all documentation - including FAA Form 8130-3 - available electronically." (US Federal Aviation Administration Form 8130-3 documents a part's history since manufacture.)
"AirLiance materials is putting a lot of resources into web-based tools for parts ordering and management, even though that still constitutes a very small part of our business," he says. "Only a small number of our customers have indicated a desire to use the web site for parts management. In fact, based on our research, no more than 10% are expected to take advantage of it, at least for now. But as the quality of web-based parts ordering and management increases, more will use it."
AirLiance believes that the Internet could lead to parts firms offering total inventory management programmes. "There's no question that the virtual inventory is coming as a result of the worldwide web. We plan to expand this tool every way we know how to improve supply chain management," he says.
But with more suppliers establishing web pages, there may also be a growing demand among consumers for single sites that could be linked to numerous sources of supply.
One-stop shop
A major step toward an Internet-based "one stop source" for airline industry parts information is anticipated by year-end, as the Air Transport Association (ATA) updates its well-known SPEC 2000 system. Introduced 40 years ago, SPEC 2000 is a data standard, or protocol, for the worldwide exchange of business and technical information among airlines. It is also an extensive data warehouse.
According to programme director Brad Ballance, SPEC 2000 was limited during its early existence primarily to EDI systems developed in-house and using mainframe computers. But, about 10 years ago, the data standard was applied to personal computers.
"At that time, more software companies began to develop and market their own SPEC 2000 software solutions to sell to the airlines and their suppliers," he says. "The result is that today, between 60 and 80% of the orders placed by major airlines employ software which is compatible with SPEC 2000."
To date, most of the data transmitted using the system has been over the primary airline communications networks - ARINC in the USA and SITA in Europe. By using the two networks, and software compatible with SPEC 2000, airlines found that they could access literally hundreds of data sources. This has enabled them to handle parts procurement more efficiently - from AOG situations to long-lead planning. Since SPEC 2000's beginning, users have been able electronically to send and receive requests for price quotes, purchase orders, invoices, shipping notices, as well as inquiries about parts and availability.
Ballance says by year-end, most of SPEC 2000's electronic commerce capabilities will be moved to the Internet .
"This means that users that do not have the resources to become involved with ARINC or SITA - or to set up their own electronic interchange systems - will be able to access SPEC 2000 via a single web site," Ballance says. "The only requirements will be a PC and a standard Internet connection."
The Internet-based capabilities will be accessed via the web site www.SPEC2000.com. By October, all of the features will be in place, but access will be restricted to subscribers. According to Ballance, the membership fee will be around $150 a month.
"As it is today, the web site provides users with a database containing information about new and used parts, inventories, prices, lead time information and repair capabilities. But by the end of this year, the web site will, for the first time, offer the ability to carry out electronic transactions over the Internet, including the buying and selling of parts," he says.
Ballance says the SPEC 2000 database system incorporates sophisticated security features that protect sensitive pricing and lead time information. In addition to data encryption, passwords and access codes, the system supports a viewing rights process by which suppliers can specifically indicate which database participants may access. Additional features include the ability for suppliers to list variable price discounts for individual customers, including multiple price breaks for volume purchases. "In addition, the airlines can customise the data they receive according to the aircraft and engine models in their fleets," Ballance says.
A major advantage of putting SPEC 2000 on the Internet is that buyers and sellers will no longer have to contact each other directly by phone or fax, he says. "For airline purchasers, the demand is toward a single web site, especially at a time when supplier web sites are proliferating," says Ballance. "If an airline purchasing agent is looking for a particular part, the use of the SPEC 2000 site means no longer having to contact each manufacturer directly to find out about availability and prices, or to go through numerous parts catalogues or web sites manually. All of this will result in a huge time savings and faster delivery times."
The automated process equates to little human intervention. "The need for huge armies of purchasing agents and support staff to keep parts inventories up to date and managed will end," Ballance says.
Although the web-based SPEC 2000 product will not replace the conventional EDI system, Ballance emphasises it will offer "a turnkey solution" attractive to smaller airlines and suppliers.
The ATA is looking toward enhancing the Internet-based system to add the warranty claim process, long a feature of traditional SPEC 2000 systems. Also under study is the development of bar codes that could be downloaded for use on shipping labels. The capability to add repair manuals to the site is also in development, as is a parts reliability database. Those capabilities, says Ballance, should be ready for release in the near-term.
Source: Flight International
