Growing aircraft fleets have propelled the commercial airline maintenance, repair and overhaul (MRO) sector into steady growth for the next decade. Pre-Covid estimates by Oliver Wyman estimated the MRO market for 2020 at USD $91.2 billion. Current estimated MRO market for 2020 is $50.3 billion. Facing a continuously growing aftermarket airlines and MRO service providers lack the optimum level of transparency to determine the best price and timeframe of needed material. Consequently, leading to costly resource and supply chain inefficiencies.
With IATA’s MRO SmartHub, airlines and MRO service providers are expected to shave 10-15% off material cost through an innovative web-based business intelligence platform.
Through the platform, users are provided a multitude of value-added statistics presented in a simplified and efficient method allowing for easier demand consolidation, material procurement, inventory valuations, and excess spares resale opportunities.
IATA’s MRO SmartHub is a neutral web-based platform enabling airlines, MRO service providers, OEMs, and appraisers to gain a greater transparency of the surplus aftermarket plus real-time access to fair market values (FMV) for aircraft parts.
Utilizing the real-time fair market value, procurement professionals eliminate the necessity to conduct extensive and sometimes costly market research initiatives.
MRO SmartHub offers industry-tuned capabilities allowing users to quickly and accurately value surplus part inventories for purchase. Combining all necessary procurement statistics with market availability and turnaround time, users can reduce operational resource requirements.
Encompassing customer-provided information, external market data, and historical transactions a mathematical algorithm determines the true fair market value of used aircraft parts real-time.
In addition, the platform enables users to access decision-making support functions for selling, buying, effective utilization of on-hand inventory.
- Purchase price reference – Detailed orientation and baseline prices to enable on-time, on-budget procurement of new and available used parts
- Repair price and turnaround – Accurate and reliable statistics to help you make the best decision for time and budget constraints
- Sale price reference – Fair market value and market assessments unlocking undiscovered inventory value to enable you to price your own parts for sale accordingly
- Recommendation of best course of action – Reduce your workload and inefficiencies with improved visual enhancers, the platform advises whether to purchase or repair aircraft parts, based on availability and pricing
- Material package evaluation – Swiftly determine the fair market value, marketability, and best utilization method for extensive material inventories, parts lists, and fit-lists (e.g. tear-downs
Optimized inventory with seamless transactions
Through a dynamic interface either via the platform or utilizing an organization’s pre-existing tool(s), MRO SmartHub redefines transactional business simplifying and thus expediting a user’s ability to purchase or sale material with preferred partners.
MRO SmartHub creates a distinctive trading channel and culminates all necessary information with associated statists, removing supply chain and sourcing inefficiencies. Coupled with true availability and supplier metrics, users unlock new stock optimization abilities eliminating high safety stock necessities.
With effortless integration, you can connect to all your preferred partners and transact via the platform. Users benefit from seamless information exchange and enhanced trading opportunities of new and used aircraft parts.
- Dedicated tunnel between two trading partners – Buyers can specify what they are seeking. The seller selects the parts to show each buyer, with quantities, prices and availability, providing transparent but confidential information
- Easier interactions – Communication systematized and negotiation simplified
- Easy access to Evaluator – To ensure you have convenient access to the Evaluator functionality without additional integration resources
Exchanging parts lowers total costs
- The economic impact of COVID-19 increased the demand for exchange transactions of spare parts. Scenario: The customer has a broken part and has to replace it. Instead of purchasing the part from the market, the customer can replace this part by doing an exchange. This exchange lowers the total cost of replacing the part and prevents filling the customer’s inventories.
- Since most exchange parts are available on short notice, they can be used to fulfill urgent demands such as Aircraft On Ground (AOG).
- With the increased interest in exchange transactions it became a priority to include this feature into the Connector module of the IATA MRO SmartHub. Together with some of IATA MRO SmartHub key customers, the development team specified and implemented this new feature in Q3 2020.
Effective and integrated exchange processes
- The IATA MRO SmartHub exchange feature is seamlessly integrated into the existing processes and functionalities. Suppliers are now able to list parts for sale and/or exchange on the Connector. To specify a listing for exchange, a set of basic parameters must be specified: exchange fee, core value and core return time. In addition, a set of optional parameters about the exchange offer is available: mark up on repair costs, additional time and fee to return the core.
- Purchasing a part using the exchange feature on the Connector is completely integrated into the existing processes for outright sales. No additional efforts are required to start using the exchange feature. All functionalities are available with a basic subscription to the IATA MRO SmartHub Connector.
The IATA MRO SmartHub Consignment extension eases handling consignment projects with partners through a full-featured project cockpit. This cockpit is designed to make every process step more efficient and more transparent for both the consignor and the consignee. The Consignment extension is part of the Connector module and all processes and interfaces are completely integrated.
The Consignment extension can handle multiple projects simultaneously even if different consignees are involved. Everything within a project is kept private and secure between the consignor and his consignment partner. The consignor can create new consignment projects and is able to continuously update the content of the projects. The IATA MRO SmartHub keeps track of changes within consignment projects.
The first step is the pricing step. Consignor and consignee can mutually agree on expected pricing for the parts within the IATA MRO SmartHub using the project cockpit. The online chat function provides a dedicated communication stream for every consignment project. If the consignment partners agree on the pricing, the consigned parts can be made available on the IATA MRO SmartHub directly from the cockpit. If consigned parts are sold externally, the consignee can enter the transaction details into the respective forms in the cockpit. The consignor will then be able to see the completed transactions in their consignment cockpit.
The key benefits for consignor and consignee are:
- Simplified communication
- Effortless integration into existing processes
- Full control and visibility of updates through online communication features and a real-time cockpit including statistics and analyses
- Evaluator features can be integrated to support pricing decisions
With the effortless integration possibilities, IATA MRO SmartHub customers can integrate the Consignment extension into their existing IT systems and processes to easily manage the scope of their consignment projects. The mission of the IATA MRO SmartHub Consignment extension is to simplify interactions, support pricing and streamline communication!
What Our Customers Say
“The MRO SmartHub is a global platform that is applicable to all. The market really needs this. By creating greater transparency, the MRO SmartHub will generate fair market value. It will rebalance the aviation value chain and help airlines save money.”
- Fabricio La Banca, Head of Group Purchasing Surplus, Lufthansa Technik AG
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COVID-19 offer to airlines
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COVID-19 brought the industry to a stop. In order to support the industry, IATA and Opremic analyzed the impact of the COVID crisis on market dynamics of Used Serviceable Materials (USM). This is the first analyses that has been created using real world historic transactional data contributed by multiple organizations.
Infographic: Impact of the COVID crisis on market dynamics (pdf)
Read full IATA and Opremic’s whitepaper: “Used Serviceable Materials (USM): Impact of the COVID crisis on market dynamics”
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