AAR Corp. deals with big supply chains, and the job of its managers keeps getting bigger.
The company is a leading provider of engineering and manufacturing parts and aftermarket support services to the worldwide commercial aviation and defense industries and serves customers in 110 countries. Founded in 1951, AAR is headquartered in Wood Dale, Ill., and employs about 7,000 people in 17 countries at more than 60 locations. The company has distribution centers in The Netherlands, Germany, Singapore and the United States as well as sales and service locations in the United Kingdom, France, Germany, Sweden, Singapore, Japan, China, Australia and Abu Dhabi.
“Our scope continues to expand,” says Robert Morris, vice president of supply chain and program management. “The supply chain management value chain has grown beyond the traditional walls of purchasing, warehousing and transportation. In many organizations, our responsibilities now include customer service, sales and marketing, legal, engineering, asset management, IT, business intelligence and analytics, quality and compliance. Over the past 30 years, the supply chain management function has evolved from a backroom operation to having a seat in many boardrooms, it has been very exciting to witness and participate first-hand in this transformation.”
“Our jobs become more complex every year as the global economy continues to evolve,” Morris says. “The risks are much bigger and the supply chain becomes more vulnerable, and that only underscores the importance of our profession – how we handle the challenges of today and how we create the strategic roadmap of the future supply chain.”
AAR combines a close-to-the-customer business model with a broad range of capabilities to help customers operate more efficiently, lower costs and maintain high levels of quality, safety and service.
AAR is divided into two operating business segments: Aviation Services and Technology Products. The Aviation Services segment offers one of the largest selections of parts and supply chain services, maintenance, engineering and advanced component repairs in the world. The Technology Products segment serves the aviation and defense markets as a designer and manufacturer of equipment for commercial airlines, OEMs and government/defense agencies.
“As we continue to experience global economic, political, and environmental shifts that redefine requirements and demand, we are preparing ourselves by diversifying our business base,” Morris says. “The commercial aircraft sector is experiencing the third consecutive year of record sales, while the defense sector is at the lowest level in a decade due to the general decline worldwide in the aftermath of the global financial crisis and reduced military spending.”
Supply Chain Services
AAR offers customers innovative supply chain solutions ranging from single-part support to complete supply chain management. Its staff possesses in-depth knowledge of the industry, supply chain solutions, warehousing, customer support and IT solutions, and can tailor custom solutions to meet specific needs.
Airinmar operates independently under AAR’s Supply Chain Segment and provides component parts repair management services to Airlines, MROs and Manufacturers. With more than 25 years of experience in repair management, Airinmar provides its customers with not only online systems that improve asset management, repair loop visibility and internal operating efficiency, but also a back office support team who work with the customer to maximize cost savings.
“Improvements in technology provide opportunity and rewards versus risks and challenges,” Morris says. “We now have more information at our fingertips than ever before to analyze and measure supply chain performance and metrics to measure optimization.”
Morris says one of the biggest challenges today is “the transparency of data in the end-to-end supply chain – having the visibility of instantaneous access to data at any level of the supply chain, from the end-user to the lowest-tier raw material supplier and transportation companies in between.” The question, he says, is “how do we erase the barriers that exist in the communication between these layers – basically eliminating the delay in data and improving accuracy, supply and demand signals, production schedules, transportation, etc.?”
Resolving these issues, Morris says, will have far-reaching benefits, including increasing efficiencies in inventories, cash management, cost containment and reduction, production schedules and delivery commitments.
A continual challenge for AAR is “to ensure we have the right inventory at the right location at the right time and at the right price,” Morris says. “This is critical to our success with our customers. We validate that correct demand gets loaded to generate the replenishment signals and we are constantly monitoring the integrity of our internal data and suppliers’ performance to improve the overall efficiency of the supply chain.
“Our goals are to maintain adequate supply to meet our customers’ requirements and optimize our inventory levels to increase turns and cash flow,” he says.
“Without a crystal ball, accurate and timely information is all we have to rely on, so it’s important to identify requirements, ensure system data integrity and that our information flow between partners is instantaneous and transparent. That’s what sets us apart,” Morris says. “The lowest price, the best quality and on time – that’s all the customer really cares about.”