Surplus Robbery And Why To Avoid Excess

Young-man-surprised

Have you ever walked down a busy urban street to eventually find out you’ve been robbed?

Or, maybe you're like me, a type that goes grocery shopping while hungry.

I’ll go down each aisle, stomach growling and toss junk in my shopping cart.

A week later I’ll reach into the refrigerator and find out that my vegetables are rotting, the meat is smelly and my fruit is beginning to attract several flying creatures.

These two scenarios have one thing in common, lost money. When you're robbed you lose money immediately but when you overbuy money is lost over time.

Now, the problem with these 2 scenarios is your surplus inventory is similar to both.

I know, hold the screaming and crying.

Aircraft surplus robs you blind

I challenge you. Go through your inventory and calculate the amount of money that's been tied up on your shelves for more than 12 months.

Is it 50%? 75% Maybe even 90%?

Now, think of that money sitting in a large pile in the middle of your warehouse. Do you have the image?

Now light it on fire!

Inventory that’s been on your shelf for greater than 12 months is a poor inventory turnover strategy with negative effects on cash flow.

Just picture how this money could have been allocated. I’m sure you have more important projects than just sitting money on the shelf watching it get dusty. This is why we created our aircraft asset management program.

Our goal is to minimize your inventory's shelf life, reduce holding cost and capitalize on generating revenue from your aging material. Aging assets is a poor way to manage your money.

With so much focus on hedging fuel, creating ancillary revenue, you should also focus on minimizing idle, wasted inventory.

Don’t sit and wait.

Look at your inventory, scream out loud and take action. Liquidating this excess is a bright future for your cash flow.

And just possibly an aircraft asset management program may be a good solution for your operation.

If it is, contact us today by CLICKING HERE and saying "Help me eliminate our surplus nightmare."

Why A Last Minute Delivery System Can Save You Thousands

Have you ever heard of the dust thief? This thief is born in your warehouse and waits for the right time to attack. He attacks slowly, without notice. He waits for you to turn away and strikes without notice.

When you first purchase expendables for your aircraft maintenance needs, the thief is born. Maybe something changed where you no longer need the material you procured. After several months the thief gets older and begins to steal the cash value of your inventory.

The longer your inventory sits on the shelf, the more money you spend having to maintain it.

Nobody want's this dust thief in their warehouse, me included.

The less you spend on items that could be stowed away for years the more you'll have to fund your operations.

Now who wouldn't want more of that?

JIT Inventory, The Money Saver

Now imagine getting rid of all your unwanted, unused surplus material. You would free up inventory space for the components that matter most, free up staff having to maintain the unused surplus and reduce your holding costs.

The Just In Time inventory concept allows you to receive expendables as you need them. Since you'll be consuming the material immediately, you'll save thousands on unwarranted spending. Here are the 3 major ways you save:

1. Frees Up Your Inventory - If you have unwanted material taking up space then you'll either have to find additional space for new material or get rid of the excess. If you didn't have excess material taking up space you could down size your warehouse and save thousands on lease payments, mortgages and / or building maintenance costs.

2. Minimize Holding Cost - When you really sit down and think about it, how much does your unused material cost you? Think of the rent for the required space; equipment, materials, and labor to operate the space; insurance; security; interest on money invested in the inventory and space, and other direct expenses. Holding cost adds up doesn't it?

3. Eliminate waste - Now this can be the most troubling because the dust thief takes your expendables and literally throws them in the trash. Once your life limited expendables and consumables reach their expiration point, they're done. Wasted. The same goes for obsolete components. Once the manufacture comes out with an upgrade, the component is no longer of value to you, even on your shelf.

Managing inventory consumption is a strategy that can save you thousands if done right. Stock the important stuff and take in the expendables and consumables as you need them. The best way to do this is to utilize a JIT inventory system backed by the support of your competent suppliers.

P.S. Would you like to discuss the JIT solution we have ready for you? Click here

Why Just In Time Inventory Is Right For You

In a world of torque wrenches and bolts the relationship between aircraft maintenance planning and suppliers is becoming more important by the day.

In the not so distant past we were managing a client's heavy check. In the middle of the project we were requested to supply the expendables for the entire project. This was in addition to the rotables we were already managing. Now, as you know, nothing ever goes entirely as planned. We scrambled, stressed and got the job done but situations like this make the planning process paramount to successful aircraft maintenance check projects.

Last minute procurement and poor forecasting can be costly. It costs more money and time, both being scarce.

The solution to this madness is the Just In Time (JIT) inventory concept.

JIT is a production strategy where you can improve your organization's bottom line by minimizing in-process inventory and carrying costs.

Have you ever thought about the total cost of waste on your shelves because you bought too much material or they're now obsolete or expired?

Just In Time inventory for your expendable needs

Raw materials, such as expendables and consumables, are an integral part of your maintenance processes but they can be costly sitting on the shelf at undesired times. Or even worse, you don't have enough spares available for your maintenance needs. You then have to procure your expendable needs on an AOG basis, increasing cost, stress and the time you spend on the project. Both scenarios are bad.

Just In Time inventory is a strategy you may want to consider to have the raw material available only when you need it. The material arrives and is immediately consumed by your maintenance needs. Reducing inventory and processing time.

Benefits of a JIT system

A buffer of inventory can be extremely comforting but it's also very costly. Once you start holding excess expendables in inventory you begin locking away cash needlessly. These items can be lost, damaged or become obsolete over years of unnecessary storage. They occupy valuable space that you could further use towards your operation.

One of the greatest benefits of the JIT system is it allows you to carry low inventory. You receive the material as you need it, just in time. There's no need to write off large inventories. You consume it when you need it, skipping the inventory process.

Another benefit of a JIT system is the reduction of waste. If material goes beyond its expiration date, corrodes or becomes unusable the cost of material rises. By eliminating waste you control cost.

A third key benefit to the JIT process is high quality production. Since you'll only be dealing with suppliers whom you trust, they will understand your needs and make sure quality is of utmost importance. This will eliminate rejected parts through your quality control process and quicker consumption rates for your aircraft maintenance planning.

JIT, stakeholder relationships and aircraft maintenance planning

The Just In Time inventory strategy is useless without a strong relationship with your supply chain. Providing your suppliers with material consumption forecasts and what you expect from them is crucial to a successful JIT relationship. By tapping into your suppliers to fulfill needs that could cost you millions is an ideal scenario.

This entire process is an evolution of change. As you begin to work with suppliers through you JIT strategy improvements will be made and cooperation will become tighter.

Aircraft maintenance planning can be costly but unnecessary spending is avoidable. With excess inventory comes excess cost, so why not receive goods just in time for consumption? By tapping into strong relationships with your supplier you'll know what parts are needed, when they're needed and receive them as needed.

If you have out of control raw material costs, a JIT strategy may be exactly what's needed for your aircraft maintenance planning needs.

P.S. If you would like to discuss our Just In Time Inventory program, contact sales today.