> British Airways Avionic Engineering (BAAE) > Queensland University of Technology IBN410 International Logistics Management Information Management and Warehousing Case Study Analysis PresentedByTalal Almalki & Natalia Ardila Avila & Siddharth Rohatgi SubervisedBy Dr. Michael Cox
> > Agenda BAAE Business Environment. Automated Storage Retrieval System (ASRS). BAAE ASRS System Requirements (Product, Item and Regulation). Concepts of Warehousing. Traceability in Supply Chain. Traceability in Various Industries. Traceability and the Role of IT Systems. Traceability - Necessary Evil or Business opportunity. Supply Chain Responsiveness. Supply Chain Operations Reference model (SCOR). Supply Chain Responsiveness Matrix (SCRM).
> > BAAE Business Environment – Group Overview British Airways Avionic Engineering (BAAE) has established its operations as a part of British Airways (BA) Groupin 1993. Main business focus of servicing, repairing and overhauling avionic equipment for BA Group and various Original Equipment Manufacturers (OEMs) of avionic components. Business Strategy “ re-certifying any components on its capability list within three days of receipt ” Warehousing strategy“recertify any request that listed under the company capability within 3 minutes for 80% of components and a maximum of 15 minutes for the reminder, instead of one-to-seven days ” Reference (Taylor, D., Global Cases in Logistics and Supply Chain Management. 1997: Cengage Learning EMEA).
BAAE Business Environment –Operational Environment > > Operations within BAAE Reference (Taylor, D., Global Cases in Logistics and Supply Chain Management. 1997: Cengage Learning EMEA).
BAAE Business Environment –Supply Chain Structure > > Reference (Taylor, D., Global Cases in Logistics and Supply Chain Management. 1997: Cengage Learning EMEA).
> > Automated Storage Retrieval System (ASRS) ASRS STRUCTURE DEFINITION Storage structure Modules Storage and retrieval machine Pickup and deposit stations “System that performs storage and retrieval operations with speed and accuracy under a predefined grade of automation”. OBJECTIVES DESIGN Prespective
Improve control over inventories
Improve customer service
Reduce labour cost and increase labour productivity in storage operations
Loads being handle
System’s require output rate and responsiveness
Level of automation
Reference (Taylor, D., Global Cases in Logistics and Supply Chain Management. 1997: Cengage Learning EMEA).
> > BAAE’s ASRSSystem Requirements – Product Based Req. The ASRS must be designed taking into account the Types of Items: Classification Systems to handle the loads within the process. Avionic equipment objects, divided in electrical - mechanical components and subassemblies. Classified as rotables and expendables to identify to determine ASRS Structure Reference (Taylor, D., Global Cases in Logistics and Supply Chain Management. 1997: Cengage Learning EMEA).
> > BAAE ASRS System Requirements – Industry Based Req. Airline Industry is characterised by the high costs involved due to combustibles and equipment (aircraft cost). Airlines try to find cost effective business solutions in maintenance providers. Sector faces high standards of Safety and Security. Specialised knowledge business. Costs of no operation in particular equipments are considerable . A flexible responsive system, that allows meeting orders and services requirement quickly, represents a competitive advantage for BAAE. Reference (Taylor, D., Global Cases in Logistics and Supply Chain Management. 1997: Cengage Learning EMEA).
> > BAAE ASRS System Requirements – Regulation Based Req. Regulation requirements are established by the Civil Aviation Authority (CAA) UK Aviation Regulator. Aviation and operation standards are determined by certifications in : Aircraft related products Avionic parts and appliances Maintenance Working procedures Inside BAAE´s process , all parts shall be tagged and traceable to meet certification, through Automatic Data Capture Technology, this information must be: Date Manufacturing Batch number Reference (Taylor, D., Global Cases in Logistics and Supply Chain Management. 1997: Cengage Learning EMEA).
Concepts of Warehousing > > Traditional Warehousing storage of raw materials/holding of stock Strategic warehousing transportation cost savings, product assortment, postponement, service delivery ( quick response ). e.g. AIM - Value Added Services – Focusing on Postponement. There is a different need of warehousing in organizations depending upon the product type Warehousing the best place in supply chain network to perform Value Added Services because of its efficiency, low labors cost ad proximity to customers. Reference (Taylor, D., Global Cases in Logistics and Supply Chain Management. 1997: Cengage Learning EMEA).
> > Concepts of Warehousing In order for the warehousing to be strategic, it needed to maximize the flexibility in responding to ever changing customer demands by adding value added services Reference (Krafzig et al., 2004, pp. 311-324).
> > Traceability in Supply Chain Internal Traceability - What happens to the product, its ingredients and packaging within the organization or production process. External Traceability Maintenance of product information from one link in chain to the next chain. Its also called Chain traceability. It span across different companies , different countries. Reference (Krafzig et al., 2004, pp. 311-324).
> > Traceability in Various industries Traceability in Aviation Industry – Why do we need it?
Legislation by Civil Aviation Authority – items entered in the warehouse or consumed in the production process
Item Visibility , Accountability and tracking of events – to better manage their inventory
Security Requirement - can help us identifying the “end life” stage and thus can provide indicators for aircraft engineers to repair and replace items when required to avoid accidents in critical industry such as aviation
Traceability in Food Industry – why do we need it ?
Legislative Requirement - for health and safety purposes
Globalization – Complex supply chains consisting of outsourcing and global sourcing created increased demand of external traceability
Change in Consumers perspective impacting consumer purchasing decisions
Increase in Technology and varied Information channels such as websites, blog and real-time online chat rooms have created hunger for information.
Establishing trust through traceability as customer have become more concerned and empowered.
Reference (Krafzig et al., 2004, pp. 311-324).
> > Traceability and the Role of IT Systems. Aviation Industry - technology forms the backbone , which ranges from data capturing example barcode and RFID, to internal traceability systems ( Warehouse Management solutions), technologies interfacing with supply chain solutions( external traceability systems). Manufacturing Industry – In case of Hitachi, the IT systems link the information which is generated in each phase of the product lifecycle to other phases. . Satisfaction Extendibility The IT systems also assist manufacturers in creating their brand image and being able to be accountable to their customers IT systems manages the information related to individual products over the entire product lifecycle, beginning with the planning stage and including design, manufacture maintenance and disposal.
> > Traceability and the Role of IT Systems. Food Industry - A traceability system can be split into two elements Routes of the product - describe the path along which, and the means by which, products can be identified throughout the manufacturing, distribution and retail system. 2. Extent of the system – This defines the scope and is determined by the choice of sub- descriptors. Activities can mean buying, selling, handling, transportation and thereby describe the route of the product Reference (Krafzig et al., 2004, pp. 311-324).
> > Traceability – Necessary Evil or Business opportunity !! IBM, suggested a full value traceability model which can be achieved be becoming more opportunistic towards customer needs whose purchasing decisions now have shifted from traditional look, feel and touch features to being accountable for each segment for supply chain Those producers that already have a basic internal traceability system in place should focus on how they take it to the next level and start getting maximum benefits out of it. Those that do have a proper internal traceability system in place should start thinking of having an external traceability system with the long term objective in mind. The model treats traceability as a journey rather than destination Reference (Krafzig et al., 2004, pp. 311-324).
> > Supply Chain Responsiveness - Overview Many factors play a big role in terms of product/services responsiveness: Stock- Availability Market Uncertainty Customers Demand Strategic Partnership Supply Chain Networking Distribution techniques Some of BAAE responsiveness issues:
Stock and material management
105 million pounds annually spent to maintain stock-level.
Solution ASRS Reference (Taylor, D., Global Cases in Logistics and Supply Chain Management. 1997: Cengage Learning EMEA).
> > Supply Chain Responsiveness – PC industry VS Aircraft industry Reference (Li, L., Supply Chain Management: Concepts, Techniq and Practices Enhancing the Value Through Collaboration. 2007: World Scientific).
> > Supply Chain Operations Reference model (SCOR). Reference (Supply-Chain Operations Reference. [cited 2009 22 March]; Available from: http://en.wikipedia.org/wiki/Supply-Chain_Operations_Reference.).