Method of Modelling and Measuring the Airline Spares Supply Process in line with Airworthiness Regulations and Aviation Standards

Diploma Thesis, 2005

148 Pages, Grade: 2,0

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Table of Content

1 Introduction
1.1 Airbus
1.2 Objectives
1.3 Methodology

2 Theoretical Framework
2.1 Airlines
2.1.1 Airline Maintenance Management
2.1.2 Spares Supply Management
2.2 Airworthiness Regulation and Aviation Standards
2.2.1 European Airworthiness Regulation
2.2.2 Air Transport Association Standards
2.2.3 European Norms
2.2.4 General Terms and Conditions
2.3 Business Process Modelling
2.3.1 Process Models
2.3.2 Modelling Methods
2.4 Performance Measurement
2.4.1 Critical Success Factors
2.4.2 Key Performance Indicator
2.4.3 Performance Measurement Systems

3 Thesis Tailored Concept
3.1 Reference Process Model Development
3.1.1 Reference Process Modelling Concept
3.1.2 Process Derive
3.1.3 Reference Process Model Creation
3.2 Reference Process Model Description
3.2.1 Maintenance Planning
3.2.2 Line Maintenance Part I
3.2.3 Repair Management
3.2.4 Line Maintenance Part II
3.2.5 Strategic Supply Management
3.2.6 Operative Supply Management
3.2.7 Goods Receipt
3.2.8 Stock
3.2.9 Goods Dispatch
3.3 Performance Measurement Concept
3.3.1 Time
3.3.2 Quality
3.3.3 Costs

4 Conclusions


Internet Ressources


Table of Figures

Figure 1: Illustrative Life Cycle Cost

Figure 2: Functions of the Spares Supply Management

Figure 3: Aviation Regulation

Figure 4: Organisation European Member Diagram

Figure 5: Rulemaking in EASA context

Figure 6: The Business Process

Figure 7: Business Modelling

Figure 8: Magic Triangle

Figure 9 Friemuth’s KPI Influence-Network

Figure 10: The LogiBest Approach (VDI 4400)

Figure 11: Procedure of modelling business processes

Figure 12: Modelling Objects

Figure 13: Business Process Attributes

Figure 14: Business Process Addresses

Figure 15: Process Flow Connections

Figure 16: Inter-Process Connector

Figure 17: Illustration of Process-Level

Figure 18: Process Derive from Regulation to Process Matrix

Figure 19: Raw Process derived from the Pilot Processes

Figure 20: Process Derive from the Process Matrix to Reference Model

Figure 21: Structure of Main Processes

Figure 22: The Main Process Maintenance Planning

Figure 23: The Main Process Line Maintenance Part I

Figure 24: The Main Process Repair & Warranty

Figure 25: The Main Process Line Maintenance Part II

Figure 26: The Main Process Strategic Supply Managment

Figure 27: The Main Process Operative Supply Managment

Figure 28: The Main Process Goods Receipt

Figure 29: The Main Process Store

Figure 30: The Main Process Goods Dispatch

Figure 31: Performance Measurement Concept

Figure 33: Measurement Points for Lead Times

List of Abbreviations

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“ In the struggle for survival, the fittest win out at the expense of their rivals because

they succeed in adapting themselves best to their environment. ”

Charles Darwin (1809 - 1882), The Origin of Species 1859

1 Introduction

In this chapter the topic of the thesis will be introduced. Its background as well as its objectives and the methodology will be illustrated. The aim is to make it possible to follow the argumentation of the developed concept for any reader.

The airline industry is highly influenced by global phenomena. Central ones has been in 2001 the 9/11 terrorism attacks, in 2002 the SARS-Epidemic outbreak, in 2003 the Iraq War and in 2004 the Indian Ocean Tsunami. These phenomena intensify the global economic recession, which worries the industry for the last years.[3]

The profit from the air industry became lower and lower; this is particularly hard for the traditional airlines. At the same time low-cost carrier became stronger and stronger and compete with their low prices even with public traffic by rail and street.[4]

“ During the worst-ever air transport crisis ”[5] more and more airlines massively review their costly maintenance business to adapt themselves better to the changing environ- ment. They want to know, understand and control their maintenance cost better. Fur- ther they want to control and improve their spares supply processes and to decrease their stock at the same service level. The customers wish the ability to track and trace its spare parts. They also want more robust processes and better policies for different actions, like aircraft on ground (AOG) and leasing, loaning or pooling spares).[6]

With these requirements some airlines approached the market-leading manufacturer of aircrafts. But further it should be mentioned that the airline industry is not alone think- ing to improve their processes. Process Management is an ongoing trend of the last years. According to a survey of IDS Scheer[7] the “Process Management” overtakes

“Cost-Decreasing” in business priority 2004 and is now business issue number one.[8]

1.1 Airbus

Airbus Industries is the leading aircraft manufacturer in the world with facilities in France, Germany, the United Kingdom and Spain. It is a joint stock company (SAS) based in Toulouse, France[9]. They provide support for more than 3,500 Airbus aircraft currently in operation with more than 230 operators around the globe.[10] To End of 2004, Airbus has a healthy delivery backlog of exact 1,500 aircraft, which at current rates represents more than four years of production.[11]

Regarding the questions of the customers a new consultancy service was planned at Airbus. It contains the modelling of maintenance and spares supply processes, its analysis with focus on process flow, time and interfaces and the installation of key performance indicators.

The goal is to give recommendations how to optimise available resources coupled with reduced inventory investment by matching just-in-time ordering and to contribute to the safety of operations. As well customer satisfaction and competitiveness is to be enhanced and improved, while a benchmarking database for spares management should be established.

This consultancy service is quite new and still in its set-up phase. Up to now every consultancy service is a unique solution. Up to now two obstacles difficulties:

-ƒ First obstacle is that the regulation is unclear and an overview of its influence on the maintenance and the spares supply process is missing. A general “To Be” Situation is missing.
ƒ- Another difficulty is that every customer needs the development of special key performance indicators.

From the two obstacles two objectives were derived.

1.2 Objectives

First objective was to create a reference process model for the airline spares supply process in line with airworthiness regulation and aviation standards. This process should be tailored to the operation of one maintenance base with line maintenance ser- vices and should contain the interfaces to forwarder, MRO[12], Airbus and other supplier and authorities. The process should contain the material process of all items, materials and components needed to maintain an aircraft. The reference process should show a virtual airline and represent the optimal “to-be” situation of the airline spares process.

The second objective was to give an approach how to define and implement key per- formance indicators into the reference model. These should measure the performance of the airline spares supply process with the target figures time, quality and costs.

1.3 Methodology

A method is a series of steps taken to accomplish an objective. The objectives are given in the previous chapter.

The following chapter 2 describes the theoretical framework of the thesis and serves the delimitation of the thesis at the same time. The chapter illustrates the topics of the thesis. It begins to introduce into the airline environment. The thesis continues with an introduction to the regulation influencing the airline spares supply management. Fur- ther the basics of modelling business processes and of performance measuring are de- scribed.

Chapter 3 explains the concept constructed to accomplish the objectives of the thesis. The chapter starts with the illustration of the procedure to develop the reference model. It goes on with description of the created model. Next the performance measurement concept is explained, that should measure the spares supply process. Below the developed key performance indicator from the concept are described.

The thesis ends with a conclusion and an outlook for possible future developments.

“ No one wants to increase their overhead or increase their inventory, so they buy one

bolt. It ’ s all about survival. It ’ s about meeting the minimum material requirements - get it repaired and get the product out the door. ”

Match Weinberg, International Aircraft Associates President.[13]

2 Theoretical Framework

In this chapter the theory is represented. That is essential to understand the issue of the thesis. It starts with giving the business background. Next the regulation governing the business is introduced. In the following chapter the basics of process management is illustrated. Finally the chapter ends with giving the essentials of performance meas- urement.

2.1 Airlines

By its nature the aviation industry has always been a global industry. The industry was subject to a very special regulatory regime in the past, national pride was related to the flag carriers and the flight has been a very high respected way of travelling for a long time. This is all in move. Ongoing traffic control deregulation and globalisation, a still more unpredictable environment due to terrorization, entrance of new and aggressive competitors, restricted infrastructure capacities on the ground as well as in the sky are only a selection of factors airlines and policy makers have to manage with.[14]

Airlines complete the modal split of traffic by air[15]. An airline is an organization pro- viding aviation services to passengers or cargo with aircrafts.[16] These aircrafts are connecting airports around the world. The airline industry is different from any other mean of transport. When there is a problem in the sky, it is not possible to stop and wait for support, because of the high altitude and gravity. That is why the airlines are required by the international regulation to meet high maintenance requirements before takeoff (see chapter 2.2 Aviation Regulation). This strict regulation has to be fulfilled to deliver airworthy and safety air transportation.[17] Hence there are two contrary regu- lation trends in Europe. On the one hand the decreasing traffic-control deregulation, which is considering the whole traffic sector, and on the other hand the increasing air- worthiness and safety regulation, which was even more intensified due to terrorist threats.

The airline spares supply management is the business of this examination. This business is part of the high-regulated airline maintenance management. The airline maintenance management is topic of the next chapter. The maintenance regulation follows after the next chapter.

2.1.1 Airline Maintenance Management

Maintenance is the process of ensuring that a system continually performs its in tended function at its designed-in level of reliability and safety.[18] According to Mensen the task of the airline maintenance department is primary to deliver economically airworthy and safety vehicles. The purpose is to meet the flight schedule of the airline operations department efficiently. Additional the quality (comfort and appearance) towards the customers is important.[19]

ƒ- Safety means to minimize accidents, failures in employment, critical systems and complaints from crew.
ƒ- Airworthiness means to minimize failure rate, mean time between failure and complaints
ƒ- Economy includes the parameter of fleet, spares supply and inventory concepts and to minimize aircraft on ground time or maximizing the flight hours.
ƒ- Quality means to minimize complaints of passenger and to optimise the com- fort and appearance.

The special task is to get the optimum of these four targets. For that purpose the given leeway in the area of conflicts should be used to optimise the four partly incompatible targets.[20]

The higher the value and life of a product, the more important is the maintenance of it (see figure 1).[21] Aircrafts have usual costs of up to 280 million dollar (catalogue prize A380[22]) and a usual lifetime of 20 to 30 years[23]. The daily maintenance of aircrafts is rather expensive, so “ Many Airlines are taking steps to reduce maintenance expenses, the third highest operating cost item after labor and fuel. ”[24]

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Figure 1: Illustrative Life Cycle Cost[25]

The maintenance of an airline could be divided into two areas: the maintenance planning and the operative maintenance. Besides these areas there are other not considered in the thesis, because they are hardly influencing the spares processes. These are the technical training and the engineering department.

The maintenance procedures at an airline could be divided into line maintenance and base maintenance.[26]

ƒ- Line maintenance includes routine aircraft checks, malfunction rectification (non-routine), cleaning and incorporating modifications.
ƒ- Base maintenance includes repair and overhaul.

The base maintenance is not in the scope of the thesis. The same is with the shop maintenance for external repairs.[27]

Most airlines support a lot of flight connections. These connections have to be covered of an equal maintenance network. The maintenance of the airlines takes place in three classes of maintenance locations[28]:

ƒ- The maintenance base is the largest, most flexible and best-equipped facility in the maintenance system. It is most times the overhaul and modification centre for the whole fleet. It has the capability to repair almost all aircraft components. The remaining components must be returned to the manufacturer.
ƒ- In major stations are a large number of employees and extensive facilities. They have a significant inventory of spare parts, mainly supplied by the main- tenance base and complete all line maintenance. The stations are mainly in- stalled at the large hubs[29] of airports.
ƒ- Service stations are large stations served by the airline, but aside the hubs. These stations are less equipped with facilities, employees and spare parts.

The maintenance of an aircraft must not be in a department of an airline. The service could be outsourced to a service provider, called MRO (Maintenance, Repair and Overhaul). In this case the MRO manages the maintenance station for the airline.[30]

The regulation makes no differences between the maintenance location classes and whether the maintenance is carried out from the airline itself or from a MRO. So it is assumed that all processes regarding the spares supply derived from the regulation are mandatory for all kind of maintenance stations. That is the reason why in this thesis only one all featured maintenance base and one procurement-level is examined.

To maintain an aircraft it is essential to supply the maintenance line with spare parts[31].

The supply of these spare parts is task of the spares supply management. This is topic of the next chapter.

2.1.2 Spares Supply Management

Objective of spares (secondary products) are all components needed to keep a machine (primary product) serviceable. To the group of spares belong all parts, assemblies and products, which are proposed to replace damaged, worn or missing components. The aviation spare components are especially stressed by vibration and influences of dif- ferences in velocity, pressure and temperature. In this thesis the group of components also consists of all tools and kits needed to carry out the removal at the machine. In the broader sense of components also food, water, waste and fuel etc. is meant. In the fol- lowing mainly the general word component is used, when all kind of supply items are meant.[32]

While in the past many primary products and parts got to be repaired, the trend goes to exchange parts and to repair only expensive parts. The stoppage of a machine could create enormous subsequent costs.[33] So the importance of spare parts grows continu- ally. In the airline industry “ The cost of having planes idle during unplanned mainte- nance is around $23,000 per hour ”.[34] Hence in the aviation industry the expectations regarding lead-time of spare parts are very high. The costs aspect for the spares supply is less important.

The tasks and targets of the spares supply processes are different on the side of the customers and on the manufacturer-side of spare parts.[35]


The manufacturer has to ensure that the machine at the operator could be supplied with spare components over its life-cycle. The expectations of the customers to the spares manufacturer regarding spare customers service determine the suitability of the spares supply management as a main instrument of marketing for the manufacturer.[36] In the most branches the importance of selling the primary product decreases and more and more profit comes from the consumption resources (spares) and renewal invests. But this is not guilty for aircraft manufacturer.[37] They use primarily the marketing function of spares services and do only cover their costs with the production and distribution of spare parts.[38] Consequently they subsidise the spares supply management of the cus- tomers, with the intention to sell more primary products. This case is different at the suppliers, where the profit of spares is more significant. The spares supply manage- ment is part of the distribution, the outgoing process flow from the manufacturer.


The other part of the spares supply management is on the airline-side. The airlines have to take care for the inventory control, vendor management, procurement, order administration, transport, goods receipt, store and dispatch. Their customers are the line and base maintenance stations and technical partner. Suppliers are the manufacturer, technical partner (see figure 2).[39]

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Figure 2: Functions of the Spares Supply Management[40]

The goal is to supply components in the right quantity, quality, time and location with minimal inventory.[41] But more important than an inventory with low costs is the availability and reliability of spare parts, if there are high downtime-costs.

This thesis deals only with the spare processes on the customer-side. The Airline Spares Supply Management is an integral part of every airline maintenance department and both parts are connected closely. That is why additionally the processes of the airline maintenance area are described.

As mentioned the maintenance and its spares supply process are highly regulated. The next chapter gives an introduction to the relevant maintenance regulation.

2.2 Airworthiness Regulation and Aviation Standards

The spares supply process and the maintenance of airlines is regulated from several groups of regulations (see figure 3). On the one side is the mandatory airworthiness regulation and on the other side are the non-committal aviation standards.

illustration not visible in this excerpt

Figure 3: Aviation Regulation

The Federal Aviation Administration of the United States of America and the Euro- pean Aviation Safety Agency, mainly influence the international airworthiness regula- tion of the aviation industry. Both are rather similar, even the most important chapter have the same titles. That is why this thesis is limited to the law of European Aviation Safety Agency.

To the group of aviation standards belong the Air Transport Association Standards, the European Norms and the General Terms of Conditions.

While law like the airworthiness regulation is mandatory, aviation standards and norms are legal noncommittal. But they are not, if they are used in contracts between the airlines and the aircraft manufacturer. A customer or supplier can but must not sign such additional contract. Most times the suppliers and airlines are driven to be conforming to the aviation standards to get the contract about the aircraft.

This thesis is based on the aviation regulation influencing the maintenance. All the important aviation regulation is described in the next chapter. The regulation is part of the social engagements and requirements of given for every organisation. Besides these requirements there are requirements of the customer and internal obligations.[42]

2.2.1 European Airworthiness Regulation

The role of the airworthiness regulation is to ensure that the civil aviation standards are set and achieved in a co-operative and cost-effective manner. The aviation au- thorities must assure itself that aircraft are properly designed, manufactured, operated and maintained; that airlines are competent; that flight crews, air traffic controllers and aircraft maintenance engineers are fit and skilled; that licensed airports are safe to use and that air traffic services and general aviation activities meet required safety standards.[43]

Accordingly nearly all activities in the aviation industry are substantially regulated and influenced by international mandatory rules.

The efforts to correspond and simplify the international aviation regulation began with the foundation of the International Civil Aviation Organization (ICAO) in 1944[44] and on European level with the foundation of the European Civil Aviation Conference (ECAC) in 1955[45]. Based on the ECAC the Joint Aviation Authorities (JAA) was founded in 1990. This organization controlled in Europe the technical and operational norm for aviation safety. But the JAA is an organization without legal enforcement powers. Consequently the current JAA system has resulted in non-binding agreements for the European members to cooperate in drafting their own aviation regulations[46]. This procedure gave the National Aviation Authorities plenty of freedom to interpret and implement rules. At the same time different certification procedures are tiresome and costly to the aviation industry, which is attempting to market their aviation prod- ucts in Europe. Progress to prevent this complication came since 1990 from the Euro- pean Commission recommending an Agency in the European Union (EU). This agency should take the role of an aviation safety regulator for EU member states. At 15th July 2002 the European Parliament and the Council Regulation (REG) No 1592/2002 (Basic regulation) paved the way for a new community system of high and uniform level of aviation safety and environmental regulation. This Regulation was also the basis for the establishment of the European Aviation Safety Agency (EASA), which operates since 28th September 2003. The European Aviation Safety Agency (EASA) takes most parts of JAA tasks for EU Members.[47] The JAA is still responsible for the non-EU countries. At the same time the EASA become an equal counterpart to the Federal Aviation Administration. The intensive political and legislative activities of the EU in the aviation initiated a worldwide dynamic for the aviation industry, because every member of the industry selling products in Europe needs to meet the requirements to the new EASA regulation.[48] Figure 4 visualizes the memberships of the National Aviation Authorities as at November 2004.

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Figure 4: Organisation European Member Diagram49

The European Aviation Safety Agency

The EASA belongs to 16 European community agencies. They are set up by an act (the Basic regulation) in order to accomplish a very specific technical, scientific or managerial task, which is specified in that act.[50]

EASA Tasks

The exercises of EASA are regulatory functions and giving services to aviation indus- try, it:[51]

ƒ- “develops common rules (EASA regulation and implementing rules)
ƒ- issues material for the application of common rules (certification specifications, airworthiness codes, acceptable means of compliance and guidance material)
ƒ- acts as focal point vis- à -vis third countries and international organisations for the harmonisation of rules and the recognition / validation of certificates[52]

EASA Regulation

The agency is still in the set up phase and is replacing current Joint Aviation Authori- ties (JAA) Regulation until third quarter of 2008[53]. The European Commission assisted by the EASA progressively develops the necessary amendments of the Regulation to enlarge its range to all other domains of civil aviation safety. So REG 1702/2003 from 24th September 2003 and 2042/2003 from 20th November 2003 and their appendices amend the basic REG 1592/2002. The appendices consist of European Civil Aviation Requirement (ECAR) Part-21, ECAR Part-M, ECAR Part-145, ECAR Part-66 and ECAR Part-147. Figure 5 gives an overlook about the EASA regulation as at Decem- ber 2004.

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Figure 5: Rulemaking in EASA context[54]

In this thesis the ECAR Part-M “Continuing Airworthiness Requirements” and 145 “Maintenance Organisation Approvals” and its Acceptable Means and Compliances (AMC) has the role of the main part from the European Union Aviation Regulation. Only these both parts have the maintenance and its material supply management as content. The “Acceptable Means of Compliance illustrate a means, but not the only means, by which a requirement can be met. It is up to the Applicant to offer alternative means of compliance which may be acceptable by the Authority.[55] But the means that the AMC issued by the EASA have the same legal validity as the ECAR-Parts.

2.2.2 Air Transport Association Standards

The Air Transport Association (ATA) was founded in 1936 and is the trade and service organization for the major airlines. The member airlines pool their technical and operational knowledge to form a single integrated airline system. Main object of the ATA activities is the safety; other objectives are cost-effectiveness and technological advancement of its operations, the improvement of passenger and cargo traffic procedures and promotion of the industry.[56]

The ATA published a lot of Publications and Standards. Some of these standards gained a great importance. Interesting for the topic of this thesis is the ATA Spec 2000[57] “E-Business Specification for Materials Management” and ATA Spec 300 “Specification for Packaging of Airline Supplies”.[58]

Each individual airline will decide itself whether to adopt these guidelines or other standards to define its own special requirements. Unless and until an airline adopts such rules to control its relationships with suppliers in a common contract, such guidelines have no legal effect. The ATA does not certify or approve this specification. In its extent these specifications are based on consideration of international regulations and other legal requirements.[59]

ATA Spec 2000

The Spec 2000 is the product of 12 international industry associations representing airlines, manufacturers, suppliers and aircraft maintenance agencies around the world.[60] The ATA established the Spec 2000 to meet the worldwide aviation indus- try’s needs for standardized, accurate, automated, procurement and repair transac- tions.[61] It administrates the Spec 2000 by setting policy and providing other strategic guidance. “The technical aspects of Spec 2000 are established and maintained by the

Spec 2000 International Coordinating Group[62]. The main goal is to provide costeffective and state-of-the-art methods for information exchange that are usable by the widest possible number of companies. The standards describe Aviation Marketplace Standards, E-Commerce Standards, File Standards and Bar Coding Standards. As a group these four components comprise the Spec 2000 e-business system. The system is particularly customized to the airline industry's needs for procurement and repair transactions for aircraft maintenance. The Spec 2000 compendium describes several processes mainly in the order administration. This is the focal area of e-business im- provements.[63]

ATA Spec 300

This specification established guidelines for the packaging of aircraft spare parts shipped to an airline and contain the minimum requirements of the airline industry to be used in the design, development, and procurement of packaging.[64]

ATA Spec 300 provides packaging instructions for repairable and expendable units and components. It establishes standards for all spare components, it outlines addi- tional requirements for special types of spare components and describes requirements for containers.

2.2.3 European Norms

In 1998 the aerospace industry established the International Aerospace Quality Group (IAQG) with the objective of establishing and maintaining universal quality standards and requirements on a global level. The IAQG is formed of delegates from aerospace companies in North and South America, Asia, and Europe, and is sponsored by the Society of Automotive Engineers in the United States (AS), the Society of Japanese Aerospace Companies (SJAC), and European Association of Aerospace Industries.[65]

The first single standard available for use across the global aerospace community is

the 9100 “Quality Management Systems” standard based on ISO 9001:2000.[66] The standard is identically published as AS 9100 for Americas and SJAC 9100 for PacificAsia and EN9100 for Europe. The global Aerospace Community has dedicated to implement that model. The standard implements the regulatory airworthiness requirement in order to take into account the importance of safety and reliability. The main focus is on process control, design control, configuration management, management of supplies and their suppliers as well as continuous improvement.[67]

The EN 9100 was expanded with specific additional requirements necessary to address the aviation maintenance needs in the project prEN 9110 “Model for quality assurance applicable to maintenance organizations”. It includes the EN 9100 entirely. Project norms will not be certificated, but the enlargements are interesting for the thesis. That is why this norm was chosen to examine.[68]

2.2.4 General Terms and Conditions

The general terms and conditions provide the rationalisation and simplification of the administration and arrangement of mass purchase contracts. Mainly they are unique in each company. Reference contracts exist, but these mostly do not substitute the unique general terms and conditions.[69]

The international reference contract of the aviation industry is the World Airlines Suppliers Guide (WASG). This document supports the special requirements of the aviation. It is created of the Air Transport Association, the Association of European Airlines, the Comite de Compradores de Material Aeronautico de America Latina, the Orient Airlines Association, and other airlines of the world.[70]

Because of the high standard of safety in the aviation industry, the customers and sup- pliers need exceptional awareness and care to support the airline fleets efficiently and economically. In this area it is important that all parties are fully aware of their respon- sibilities. This regulation supports the clear understanding of these responsibilities. As described in the chapter 2.1 Airlines, the support of a supplier for in-service aircraft is a high priority item, which may be easily failed to notice by manufacturing-oriented companies. The operation of aircraft without proper spares and maintenance support is not possible. The WASG is in harmony with the international regulatory requirements. For the reason of dynamic nature in the global airline industry and the continuing in- come of new suppliers to the industry, it is essential that each supplier establish a sin- gle outline of policy against which all airlines can operate. The purpose of the WASG is to assist in this effort and is not intended to substitute the general terms and condi- tions.[71]

The Airbus implementation of the WASG is the General Conditions of Purchase (GCP). This general terms and conditions are divided into two parts. Part I encloses the content for the production of the aircraft. Part II is for customers support and there- fore the spares supply. The GCP is part of the purchase contract between Airbus and the airlines and supplier. It provides extensive rights for the airlines regarding the im- portant customer service and describes several processes for the spares supply man- agement.[72]

To accomplish the first objective of the thesis processes should be derived from the regulations from this chapter and a reference model should be created. The next chap- ter describes the basics of processes, process management and process modelling.

2.3 Business Process Modelling

Each company is characterized through unique processes. Clever and consequently executed processes are a main precondition for economical success. Up to the last years fewer companies took care for their processes. But according to the survey of

IDS Scheer this has been changed (see chapter 1 Introduction). The organization of companies is most times still very structural, they took care for departments and authorities needed and less for operational customer oriented processes. As a result of that most processes are built unstructured, illogical and copious. These uncoordinated processes have more errors and need more time and costs.[73]

The base for improving business processes is to get an overview and transparency about the structure and organisation of the target organisation. This is the main task of business process modelling.[74] To get a common understanding some theoretical basics are mentioned, before the business process modelling is introduced.

Process Management

According to Delfmann/Reihlen and Schmidt process management is the strategyoriented analysis, assessment, planning, controlling and monitoring of value-added business processes on different level in and between organizations.[75]

Business Processes

Engaged in business means to supply products and services. These products and services are the results of many processes of a company and its suppliers. A business process is a sequence of events, which transform inputs into outputs by a specified method. This method is for example a work instruction. While this transformation a customer-oriented value should be added.

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Figure 6: The Business Process[76]

Processes show a recurrent character and potentially take up time and input. The inputs

are the factors of production like materials, labour, expertise, space and equipment. These factors create costs (figure 6).[77]


A model is the target-oriented, theoretical and abstract illustration of a defined part of the reality into a simplified construct with the purpose to describe, analyse and arrange the system of business processes.[78] The reality and the model-construct are systems, which could be described with elements and connections.[79]

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Figure 7: Business Modelling[80]

To model the reality a survey at several different airlines and MRO would have been necessary. But the aviation regulation requirements (compare with 2.2 Aviation Regu- lation) influence the reality decisively. That is why in this thesis not the complex reality from several airlines itself was illustrated. The model created in this thesis was derived directly from the universal valid regulation (see figure 7).

The modelling of the entire supply process is theoretically possible. But in the reality several restrictions limit the extent and accuracy of modelling. First restriction is the access to the process object. This gives the opportunity to review the model to compare it with the reality. In this thesis the access was given by the regulation only, there was no contact to airlines. Another restriction is given by economical considerations. So it is possible to survey and examine the regulation of the spares supply process with interdisciplinary experts and over a diverse periods.[81]

2.3.1 Process Models

The graphical visualization of processes is important to get the starting position to improve the process procedure. The base for quantitative and qualitative analysis and to improve processes is the creation of models. The model has the target to give a limited illustration of the issue area. By modelling processes, processes are logically and target-oriented connected.[82]

The modelling of a reference model has several advantages. It creates transparency and it could be used as a standard for further examinations. So it decreases the efforts for new creations. The high universal validity is given by the international aviation maintenance regulation, which is mandatory for all aviation maintenance companies. At the same time the reference model is the base for measuring the spares supply proc- ess.[83]

Two means of representation are popular: process chain models and process flow- charts. The process chain models show all business processes and consequently the


whole process flow of information and material in its totality. The flowchart examines each business process and the steps of its (sub process) activities.[84]

The process model of this thesis bases on the process chain model. The process chain models show all considered processes of the organization. Each chain starts and ends at the customer. The customer delivers the request with his requirements and the or- ganisation initiates the value adding processes to fulfil the customer request regarding his requirements. The process chain model shows the logical connections and the rela- tions to external customers and suppliers. They are simply to read and should be un- derstandable without further information about the process modelling methodology.[85] There is no standard for business process chain models for the purpose of business improvement, while there are plenty standards in software engineering, for example the Unified Modelling Language[86].

2.3.2 Modelling Methods

In this thesis the model is used only to visualize the requirements derived from the aviation regulation. We do not need to build a software application on it, nor to calcu- late or simulate with the process model. That is why simple modelling method should be chosen.

A model simplifies complexity, but itself it could be complicated. To prevent it a model is the subject of conventions. These conventions are called modelling methods. For different purposes of modelling different modelling methods exist.[87]

The method describes the business process model formally. The modelling language contains elements, syntax with rules how to connect the elements and guidelines for the orderly construction of models.[88]

While the first objective of the thesis is the creation of the reference model, the second objective is to implement performance measurement indicator into the model.

2.4 Performance Measurement

When a company manages a product or service which fits to the target market, the re- sult in that market will be principally dependent upon three critical success factors, namely time, quality and costs.[89] In the past many approaches appeared measuring not only quantitative financial measures (costs), but also qualitative measures (time and quality) to describe the performance of business operations. The goal of this chapter is to give the theoretical base to measure the performance of the spares supply process affecting these three key factors.

2.4.1 Critical Success Factors

The influence of critical success factors is existential for the company in the long term.[90] The critical success factors for this thesis are time, quality and costs. These factors are very popular in the supply management and also given from the scope of this thesis. Besides these factors, there could be other like flexibility, innovation, productivity etc.[91] The description of target factors gives an orientation and initiates the improvement of performance.[92] These three factors are the basis for the performance measurement concept developed in chapter 3.3.


This critical success factor is the main dimension in the airline supply process. It describes the duration to provide information or to supply components from the source to the destination. The special relevance of time becomes very clear in chapter 2.1.2 Spares Supply Management.


[3] AEA:, p. 3

[4] AEA:, pp. 25; Jacob/Jakešová, 2003, pp. 123

[5] Overhaul & Maintenance, September 2003, p. 25

[6] compare reasons for reorganisation: Ihde/Merkel/Henning, 1999, p.121

[7] IDS Scheer AG is an supplier of business process management software and services

[8] IDS Scheer: sixcms/detail.php/1981; Kley-Steverding, IDS ScheerBusinessProcessReport_04.pdf p. 6,; 2004-08-25

[9] The Shareholder are EADS (European Aeronautic Defence and Space Company, N.V.) with 80 per cent and BAE Systems plc with 20 per cent



[12] Maintenance Repair and Overhaul service provider

[13] Baldwin; Overhaul & Maintenance, July/August 2004, p. 25

[14] Baum/Delfmann: CEMS_Aviation_WS0405.pdf

[15] Maurer, 2002, pp.2

[16] Schiek, 2003, pp. 125; Schmidt, 2000, pp. 76

[17] Kinnison, 2004, p. xxiii

[18] Kinnison, 2004. p.35

[19] Mensen, 2003, pp. 810

[20] Mensen, 2003, pp. 810

[21] Ihde/Merkel/Henning, 1999, p.1

[22] Hennigan:

[23] Penner:; chapter 7.2.3. Time Scales from Technology Development to End of Service Life

[24] Overhaul & Maintenance, May 2004, p. 25

[25] OSD: 1992, chapter 2.2

[26] Wells, 1999, pp. 255; Mensen, 2003, pp. 816

[27] Kinnison, 2004, p. 141

[28] Wells, 1999, pp. 251

[29] A hub is a central node in a network

[30] Maurer, 2002, pp.162

[31] Kinnison, 2004, pp. 169

[32] Mensen, 2003, p. 822; Biedermann, 1995, p. 3; Ester, 1997, p. 118; Ihde/Merkel/Henning, 1999, pp. 9; Kinnison, 2004, p. 145

[33] Biedermann, 1995, p. 1; Ihde/Merkel/Henning, 1999, p.3

[34] Overhaul & Maintenance, April 2003, pp. 33

[35] Ester, 1997, p. 115

[36] Ihde/Merkel/Henning, 1999, p.3

[37] Ihde/Merkel/Henning, 1999, p.1 / p. 92

[38] Ihde/Merkel/Henning, 1999, pp. 9

[39] Biedermann, 1995, pp. 6; Mensen, 2003, p. 823; Ester, 1997, p. 119

[40] Mensen, 2003, p. 823; Pfohl, 2004, p. 20

[41] Biedermann, 1995, pp. 7; Pfohl, 2004, p. 12

[42] Hering/Steparsch/Linder, 1996, p. 139

[43] CAA:, 2004-12-22

[44] Mensen, 2003, pp. 38; Wells, 1999, pp. 122; Sterzenbach/Conrady, 2003, pp. 37; ICAO:

[45] Mensen, 2003, pp. 38; Sterzenbach/Conrady, 2003, pp. 41;


[46] Burchell, March 2004, p. 27; Sterzenbach/Conrady, 2003, pp. 44

[47] Chung, 2004, pp.1

[48] UVEK:, 2004, pp. 8/ pp. 30

[49] Sterzenbach/Conrady, 2003, pp. 41; JAA(a): JAAMemberStates-November2004.doc

[50] EU(a):

[51] EU(b):

[52] EASA(a):, p.14

[53] EASA(d): Maintenance%20Overview.pdf

[54] EASA(b):, pp. 10; EASA(a):, p. 17; EASA(c):

[55] JAA(b):

[56] Wells, 1999, p. 116; ATA:

[57] Spec corresponds to Specifications

[58] Scholz, 2002, p. 7

[59] ATA, Spec 300, 2001

[60] Spec 2000:

[61] Wells, 1999, p. 116; ATA:

[62] Spec 2000:

[63] Spec 2000, 2003, chapter 1.1

[64] ATA Spec 300, 2003, chapter 1-1

[65] IAQG:

[66] QMS:; NQA:; Cop- pinger: 0,6425,100126,00.html

[67] Möller, 2004, p. 4; QMS:

[68] prEN9110, Introduction

[69] Westphalen, 2003, p. 1

[70] WASG, 2003, Introduction

[71] WASG, 2003, Chapter 1

[72] GCP, 2000, pp. 2

[73] Wilhelm, 2003, p. III / p. 18

[74] Kuhn (editor), 1997, p. 12; Schmidt, 2003, pp. 52; Vossen/Becker, 1996, p. 19

[75] Delfmann/Reihlen, 2003, p. 5

[76] Gudehus, 2000, p. 15; Schmidt, 2003, p. 24; Ester, 1997, p. 113

[77] Büssow, 2004, p. 45; Schmidt, 2003, pp. 2; Vossen/Becker, 1996, p. 18; Baumgarten, 1999, pp. 228; Wilhelm, 2003, p. 1/pp. 25; Hüsselmann, 2003, p. 63; Fröschle (ed.), 2002, pp. 27

[78] Hüsselmann, 2003, pp. 46; Vossen/Becker, 1996, p. 19; Reichmann, 2001, pp. 55; Weber:

[79] Reihlen:, 1997, pp. 3

[80] Hüsselmann, 2003, pp. 46; Vossen/Becker, 1996, p. 19; Reichmann, 2001, pp. 55;

[81] Weber, 1995a, p. 34; Wiendahl, 2002, p. 66

[82] Schmidt, 2003, pp. 22

[83] Büssow, 2004, pp. 43

[84] Wilhelm, 2003, pp. 34; Wiendahl; 2002, pp. 56

[85] Wilhelm, 2003, pp. 36; Wiendahl; 2002, pp. 56

[86] Object Management Group:

[87] Hüsselmann, 2003, pp. 55

[88] Fahrwinkel, 1995, p. 7

[89] Broeke, 1989, III

[90] Gladen, 2003, p. 14

[91] Ihde/Merkel/Henning, 1999, p. 93; Kuhn (editor), 1997, 63; Büssow, 2004, p. 45; Fröschle, 2002, p. 18

[92] Friemuth, 1999, p. 68

148 of 148 pages


Method of Modelling and Measuring the Airline Spares Supply Process in line with Airworthiness Regulations and Aviation Standards
Hamburg University of Applied Sciences
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business process management, airline, standards, quality management, spare part, spare parts, service, quality standard, iso, EASA, Air Transport Association, ata, European Aviation Safety Agency, iso 9110, International Organization for Standardization, logistics, process management, kpi, key performance indicator, aviation, mro, Maintenance Repair and Overhaul
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Alexander Ehrlich (Author), 2005, Method of Modelling and Measuring the Airline Spares Supply Process in line with Airworthiness Regulations and Aviation Standards, Munich, GRIN Verlag,


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