Unlocking value from component exchange contracts in aviation using simulation-based optimisation

Motivated by the entry into service of new aircraft such as the Airbus A380 as well as the pressure to operate existing fleets at lower cost, not only in civil but also in military aviation, a new industry paradigm has emerged where MRO (Maintenance, Repair and Overhaul) service providers or OEMs (Original Equipment Manufacturers) supply spare parts to airline operators on a maintenance-by-the-hour basis. As a consequence, the associated logistics networks have reached unprecedented complexity: Component exchange commitments are now made to multiple operators, not only at their main bases but also at outstations. In this setting, the limitations of conventional Initial Provisioning methods can be overcome with high-fidelity simulation-based optimisation techniques. In particular, this paper discusses how value can be unlocked from new logistics policies for spare parts management in aviation.