The encyclopedia · Engineering & Operations · Operational decision · 2023–2025
Pilatus improved parts-on-time while cutting spare inventory 21%
Pilatus's aircraft-on-ground critical parts needed faster delivery; a (Q,R) stocking model lifted on-time service and cut the value of parts held by 21%.
Pilatus Aircraft
the move
Pilatus distributes and maintains Pilatus aircraft across North and South America, so a repair part can be the difference between a plane on the ground and a plane flying. Its high-importance Priority 2 orders are the critical, aircraft-on-ground parts.
The naive approach is to stock plenty of every part, but that ties up a lot of money and still leaves slow movers sitting idle.
The fix was a (Q,R) inventory review model that decides, per part, how much to order and at what reorder point, plus a separate model that flags obsolete parts for liquidation, so stocking and pruning are optimized together.
Over 18 months, on-time delivery for all order types rose 4.7 percentage points and for Priority 2 (AOG) parts by 5.9. In 2024, by its own calculation, Pilatus cut the value of goods held in inventory by nearly 21% (excluding the liquidation effect) while adopting the models as stocking guidance.
why it works
- A grounded plane's part is worth far more than its price, so service and cost are not really in conflict once modeled together.
- A (Q,R) policy sets both how much to order and when, balancing reorder cost against stockout risk.
- Separating obsolete-stock liquidation from new stocking keeps the warehouse lean.
- The result improved service and cut inventory value at the same time, which usually looks impossible.
what transfers
Inventory is a two-part problem: keep the right part in stock when a plane is grounded, and don't let money sit in parts nobody needs. Fix the reorder point and prune obsolete stock to get both.
what came after
Pilatus adopted the models as routine stocking and liquidation guidance, improving on-time parts delivery while reducing the value of goods held by nearly 21%, and published the work in Interfaces.
references
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