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Top Ways Having an Inventory Management System Increases ROI

Top Ways Having an Inventory Management System Increases ROI

For aircraft operators and MROs, inventory control in general is about knowing what you have, being able to account for it, and being able to report on it. To do this most accurately and efficiently requires a system built specifically for aviation. Having the right system in place will not only be less stressful but will also increase the bottom line.

Here are the top reasons why using a modern inventory management system will allow your team to work smarter, use your resources better and increase your return on investment.

The top 5 reasons to have an inventory management system

  1. Cost control benefits – Operators and MROs need to be able to understand their inventory levels to avoid overstocking, understocking, or wasting inventory. Having a system will lower costs to carry inventory, which will positively impact the bottom line.
  2. Easier compliance – A robust, real-time system is essential for compliance and record keeping. Keeping explicitly accurate records with state-of-the-art technology that is easily accessible will save time, money, and stress.
  3. Improved efficiencies – Operators and MROs must be able to track inventory in real time to help with the reorder processes and decrease manhours in managing inventory. Having a robust system for tracking in real time will free up staff to do other tasks and prevents the need for data re-entry and increases accessibility and efficiency across the board.
  4. Improving financial reporting/analysisDo you know how much you are spending on purchase orders? What are the actual costs of each part? How many parts are you installing and how many are you discarding? Understanding these details from a bottom-line perspective is tremendously helpful and will improve your financial analysis.
  5. Operational visibility – Knowing the state of your fleet related to inventory and maintenance is crucial. Being able to spot and track part issues along a timeline allows operators to build a history of parts and components in order to see trends. With a system in place, you can easily spot and assess the reasons why maintenance costs may be increasing on a particular aircraft or fleet.
  6. Modern technology attracts a modern workforce – Today’s new generation of employees don’t want to use spreadsheets. They want the most modern, cloud-based technology available. Having a web-based inventory management system can help with employee retention and morale. 

Is my legacy system negatively impacting my bottom line?

Are you an operator or MRO using Excel spreadsheets or technology that wasn’t built for aviation specifically? While these systems may be working, they may be costing you money. If you can’t quickly and easily pull actionable data related to all the aircraft in your fleet, that may be a roadblock to success. 

Forced workflows that don’t pertain to aircraft operators can lead to inefficient use of resources, understocking or excess inventory, wasteful money spent on unnecessary rushing of parts orders, and increased maintenance costs. Inaccurate tracking reduces overall efficiency and disrupts schedules. From a safety perspective, inaccurate information can lead to accidentally introducing faulty parts or compliance issues, which can jeopardize airworthiness certification.

What should people look for in a good inventory management system? 

Besides looking for modern technology, look for a system that is cloud-based and designed specifically for your organization.

  1. Reconciliation tool: Look for a solution that also offers a reconciliation report tool so the finance team can track transactions and transfer them to the general ledger.
  2. Aviation-specific functionality: It is crucial that a great system is not generic, but rather designed for an aviation management team or company and is suited perfectly for operators and MROs.
  3. Platform integration: An important aspect is a system that integrates all your departments, including maintenance tracking, flight scheduling, inventory management, and gives operators a full view of the aircraft.
  4. Customer support: A company that provides 24/7 support and answers the phone on the second ring.
  5. Data security: 24/7 monitoring with geographically dispersed backups of data so that all client data is well protected.
  6. API integration: You want more than just a fancy front-end interface, but also something that that can be integrated into other applications. Look for a system that can push purchase orders into a financial or accounting system to streamline processes and reduce data entry for better insight into purchasing and reconciliation.
  7. Mobile: A great solution will allow your team to manage inventory on the go, instead of running back and forth from the stockroom to a computer. Look for bar code technology that is embedded into the mobile application, and can process inventory transactions through QR codes, or snap pictures of key forms that can attach to inventory items in the system.
  8. Single sign-on: If you are an operator with multiple locations, a web-based platform with a single source of truth will be incredibly beneficial.
  9. Reporting capabilities: A tremendous amount of reporting capabilities that can get down to the transactional level will help your team understand how the inventory is applied to specific aircraft and which parts are saving or costing you money.
  10. Customizable workflows: This gives operators a chance to tailor the system to meet their needs from reports to the user interface. 

Summary

From a business outcome perspective, a modern inventory management system will reduce costs, improve the accuracy of data, and allow for cross-department visibility. Having you entire team on the same page with shared access to all the operational details of aircraft will be a huge cost savings for your organization. 

Imagine getting instant notifications for low-stock items or expired parts, seeing the real time status of shipments, or knowing the availability of a part in seconds. This type of knowledge is integral to any business and will not only help with maintenance, inventory tracking and operations, but can help with communication among team members. Contact us today and get a free demo of our inventory management system!