Guidance Material & Best Practices for Component Maintenance Cost

Management

Implement Six Sigma methodologies to minimize overhaul and repair costs: use DMAIC 6 to reduce NFF
rate for components with the highest NFF rates (e.g. batteries, emergency transmitter packs, etc.) or
reduce TAT.
o Define the most critical P/N that have unreasonably long TAT

o Measure the effects on inventory level and AOG requests

o Analyze the reasons for long TAT (logistics issues, bad contract conditions with repair stations,
etc.)

o Improve on parameters that lead to long TAT

o Control implementation by monitoring TAT

5.2 Parts Management

This section addresses the various costs associated with parts, the cost of ownership and provisioning
(spare part costs) for components as well as escalation rates. These costs are grouped under the following
categories:
Ownership costs

Component pooling

Fleet configuration
Price escalations

Warranty

Surplus parts or repair

For more details, please refer to IATAs Guidance Material and Best Practices for Inventory Management,
2nd edition (2015).7

5.2.1 Ownership Costs

Each organizations underlying accounting standards, which also account for repaired parts, are a decisive
factor for the cost of ownership. This section provides a brief overview of which general items have to be
considered when managing component maintenance costs. A more in-depth analysis of the effects and
possibilities of accounting methods is not within the scope of this paper.

6
DMAIC (Define, Measure, Analyse, Improve, Control) is a data-driven methodology to improve, optimize and stabilize processes.
7
IATAs Guidance Material and Best Practices for Inventory Management, 2 nd edition (2015) - ISBN 978-92-9252-741-9 Free
download on www.iata.org/mctf

18 2nd Edition 2015