We helped an aerospace company lower conversion costs while achieving improvements in inventory management and lead times.

In the highly competitive aerospace industry, where precision, reliability, quality and efficiency are crucial, managing complex logistics and high inventory costs is a constant challenge. An industry leader in the design, manufacture, and service of aircraft engines and auxiliary power units faced these issues head-on, particularly with a critical part that suffered from inconsistent throughput and lengthy lead times.

Challenge: Managing high inventory levels of expensive parts, lengthy lead times, and intricate value-stream logistics while ensuring demand is met without sacrificing delivery performance.

An aerospace manufacturer faced the challenge of preparing for a substantial increase in production volume, driven by the introduction of several new part numbers. At the same time, they needed to address high inventory levels of costly parts, lengthy lead times, and complex value-stream logistics. A key concern was the anticipated rise in demand for a critical part already plagued by inconsistent throughput and excessive lead times. The primary challenge was to overcome these issues and meet the growing demand without compromising delivery performance.

Solution: Create standard work for materials flow. Simplify value-stream logistics for cost and lead-time improvements.

We implemented standard work procedures for material flow, streamlining operations and ensuring consistency. Simplifying value-stream logistics led to substantial cost savings and lead-time reductions. A steady cadence for product movement was introduced, minimizing bottlenecks and improving throughput. Production was further optimized by rationalizing parts manufacturing into the most economical increments, customized for specific processes. Additionally, transitioning from a push system to a pull system aligned production with actual demand, effectively reducing excess inventory.

Results: Inventory was reduced by 45% and 100% delivery-to-requirement for the critical part.

  • Inventory was reduced by 45%
  • Established target and max acceptable quantities at each process
  • 100% delivery-to-requirement for the critical part
  • Consistent daily flow of materials with lead times stabilized
  • Conversion costs reduced:
    • Overtime cost virtually was eliminated
    • Overproduction, pushing parts and “crisis” management was eliminated
    • Reduced time and complexity for internal and external logistics