Executive Briefings

Two Airlines Show How to Merge MRO Supply Chains

On paper, one would think that integrating the supply chains for two maintenance organizations would be easy. Just look for areas where there is duplicated effort and inventory, rationalize those operations and realize the savings. But in practice, it's a very different matter.

Such was the case with the merger of Air France and KLM Royal Dutch Airlines. Between them, the two airlines operated advanced logistics platforms in Singapore and Kuala Lumpur, which would have seemed a natural for consolidation. "On paper, you ask why you don’t do all of the warehousing and maintenance in one facility," says Harmen Lanser, AFI KLM Engineering & Maintenance's components group product development and logistics director. "In reality, merging those two warehouses is not the highest priority because we service different customers and different fleet compositions." In fact, Lanser adds, from a components standpoint, "it's not uncommon to have big warehouses that are only a one-hour flight from one another. Service to the customer is more important than the cost savings of consolidating the two locations."

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Such was the case with the merger of Air France and KLM Royal Dutch Airlines. Between them, the two airlines operated advanced logistics platforms in Singapore and Kuala Lumpur, which would have seemed a natural for consolidation. "On paper, you ask why you don’t do all of the warehousing and maintenance in one facility," says Harmen Lanser, AFI KLM Engineering & Maintenance's components group product development and logistics director. "In reality, merging those two warehouses is not the highest priority because we service different customers and different fleet compositions." In fact, Lanser adds, from a components standpoint, "it's not uncommon to have big warehouses that are only a one-hour flight from one another. Service to the customer is more important than the cost savings of consolidating the two locations."

Read Full Article