Cathay Pacific Logistics Study Case

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HERPIN DWIJAYANTI Global Logistics Case Report Aviation Spare Parts Supply Chain Management Optimisation at Cathay Pacific Airways Limited 1. Why is good supply chain management of spare parts so critical for an airline? Good SCM of spare parts for an airline is very critical due to following reasons:  Spare parts are important part of an airline as aircraft needs maintenance to make sure its safety to fly with passengers in a long distance. A bad maintained aircraft will cause accidents. Therefore good SCM is very critical.  It is not simple to manage spare parts of aircrafts. Aircraft components were complex, high-level modules consisting of dozens or hundreds of parts. The life span of a component could exceed two decades, during which it might be repaired or overhauled more than a dozen times. Therefore a good SCM is very critical.  There is strict regulation regarding the airplane safety. The aviation industry was regulated by international and local authorities such as the US Federal Aviation Administration (“FAA”). the FAA had the authority to ground a plane if airline operators did not complete the deferrable repairs within the stipulated timeframe. All suppliers of aeroplane spare parts were required to possess special legal certifications and formal protocols, which were stipulations that indicated assumption of responsibility in case of an accident. Therefore, a good SCM is very critical.  Good SCM will reduce cost. The driving force behind supply chain management (SCM) is to reduce inventory. Higher inventory will cost higher for the company as it needs more holding cost.  Good SCM will avoid wasted materials. Supply chain management is all about having the right product in the right place, at the right price, at the right time and in the right condition. Therefore planning, scheduling and control of the supply chain is so critical. 2.

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