By Mark Roboff, SkyThread CEO

Note: this post is part of a 52-week series, but Chuck is taking a break so that Mark can post. This post is Week 9.

Green is Good. At SkyThread, we talk extensively about the benefits of part track and trace to our customers’ bottom line. Going back to what our Chief Strategy Officer, Chuck Marx, first articulated in Data for the Life of the Aircraft, we envision an industry data network supplying full and trusted visibility to any and every part’s history as providing more than $30B in yearly operational savings to the commercial aviation industry. There are indeed several vectors that contribute to this overall number, and the SkyThread team has done extensive work building a top down and bottoms up analysis to validate these savings. However, one vector animates me more than any other, and that’s track and trace’s impact to supply chain visibility.

Most airlines will oversupply on spare parts, stuffing hubs and outstations with material that may sit on shelves for decades waiting for the off chance that they’ll be needed. Airlines do this because their visibility into part data when parts are needed most, such as a critical AOG event, is limited. Airlines need to trust that the parts they put on their planes are airworthy. It’s a safety-critical matter. When an airline’s ability to validate and trust part data is limited to just those parts that the airline directly buys, inventories, and manages, it leads to our oversupply problem.

To illustrate, let’s imagine a major US airline has opened a route to northern Thailand, a tourist destination with many resorts that has been growing in popularity over the last decade. For the US airline, this route is clearly a remote outstation. They are the only US airline that flies to northern Thailand, and their nearest hub is on the US West Coast—say San Francisco or Seattle. Nevertheless, the destination itself is well served by other airlines in the region, and there are several sources of parts inventory stationed at the airport, waiting for that critical AOG event.

Since this US airline has little insight into the history of parts they don’t directly own or manage, even if they may be willing to buy, sell, and trade with other companies, the airline buys and stations their own inventory of needed parts just for the one or two planes they fly to this remote destination. If the US airline had ways to evaluate, and critically, trust the technical and event history of other parts stationed at this remote destination, they could instead buy, sell, trade, or pool with the other parts owners at this station rather than fly and shelve their own parts for a rainy day. In short, an industry validated network of parts track and trace information provides a means for all players to trust the information about all parts, enabling an optimized just-in-time supply chain. With this expanded and trusted visibility, we estimate that the commercial aviation industry would be able to reduce parts inventory and carry by over 30%. That’s an enormous impact.

What excites me most is not just the dollar savings impact on being able to reduce supply chain inventory. Reducing parts inventory by 30% has a substantial environmental impact as well. Imagine OEMs shifting production to needed parts rather than to parts that will sit on shelves for 15 years before they are eventually scrapped and recycled. Imagine the significant reduction in cargo volume when airlines can stop shipping a full array of spares to remote destinations, relying on trades and pools instead. Equating a measured impact—i.e., in carbon reduction—to this use-case is difficult but can be done with the right support from the right players. I strongly advocate that being able to measure the environmental impact on parts inventory reduction is a worthy task the industry should undertake with haste.