The Problem: Replacing a damaged airplane part or component can be an expensive proposition. It costs airlines hundreds of thousands of dollars to have an aircraft out of service. The replacement parts themselves—often many feet high, wide, and long—can be even more expensive. And because there's no way to predict where or when a particular airplane will sustain damage to a specific part, airlines don't want to keep a lot of this high-priced inventory on their books. So when, for instance, a bird strike unexpectedly damages an engine cowl, airlines turn to someone like George Sanford of Jelece Aviation Solutions for help.
Sanford is a middleman who buys "rotables"—high-value aircraft parts that can be repeatedly repaired and restored to serviceable status. He specializes in parts for wings, such as ailerons, stabilizers, and the protective housing for the engines, making sure the parts are repaired if needed, and that they pass a rigorous safety inspection and are certified for reuse. When Jelece wins a bid, Sanford must deliver the certified replacement part whenever and wherever the airline specifies, swapping it for the damaged one, which he then readies for the next order. The time from bid to delivery can sometimes be as little as two days.
When the veteran aerospace procurement professional decided to launch his own company earlier this year, he had to prove to potential customers and investors that he could be counted on to deliver the goods on time. "Being reliable is very important in my business. It gives me credibility in the market," Sanford says.
Customer: Jelece Aviation Solutions
Primary business: Replacement aircraft parts
Headquarters: Fort Worth, Texas
Supplier: Icat Logistics Inc.
Solution: Domestic and international logistics services for oversized, time-sensitive items
Jelece would also have to provide parts at a competitive price, which meant obtaining them not just in North America but also from China. Yet his tiny company was brand new, and Sanford had no experience as an importer. Furthermore, as a broker, he did not want to sink money into assets like a warehouse or trucks. He needed a logistics partner he could rely on to store and move heavy, bulky shipments efficiently and cost-effectively and with little or no advance notice, in both domestic and international commerce.
The Solution: Sanford's previous employer, an aircraft manufacturer, had a relationship with the Dallas branch of Icat Logistics Inc., an international logistics company headquartered in Elkridge, Md. Because Texas is a major hub for the aerospace industry, the local franchise was well versed in the logistical requirements of that business. So when Sanford was ready to launch Jelece Aviation Solutions, he turned to Icat to help him get the business off the ground.
Icat handles the physical aspects of the supply chain, holding Jelece's inventory in its Dallas-area warehouse; arranging transportation between the warehouse, suppliers, repair contractors, and the airlines; and handling air and ocean freight forwarding and customs brokerage for international shipments. Most domestic shipments travel by truck, often on flatbeds or other specialized equipment. Smaller pieces sometimes require expedited air or ground service. International shipments to customers usually move on wide-body freighters that can handle oversized items.
One of the biggest challenges for Jelece is finding the right balance of cost and service. Since time is always of the essence in the aerospace industry, both shipper and forwarder have to react quickly when a call for a replacement part comes in, says Michael Schepers, director of business development and a co-owner of Icat's Dallas franchise. But as a small business with cost-conscious customers, Jelece can't just ship everything express or next flight out.
The forwarder was able to help Jelece meet its delivery commitments at an acceptable cost. "When they have something urgent, we'll call multiple carriers immediately," says Schepers. "We might tell them Carrier A can have it there Tuesday, but Carrier B can have it there on Thursday for less money. They'll do the math and decide whether they want to pay that premium to get the turnaround time."
Icat also helps its customer hold down costs by expediting urgently needed parts while moving less urgent pieces from the same order via more economical means. The forwarder saw another opportunity to reduce costs when it noticed that a regular parts supplier was sending Jelece several small shipments each week. Icat worked with the supplier to consolidate the orders into a weekly shipment, which it picks up and brings to its Dallas warehouse.
As Sanford prepared to import his first aircraft parts from China, he encountered a problem he hadn't anticipated—namely, that the language barrier and the first-time importer's inexperience made communication with the Chinese supplier difficult. Icat arranged for its agent in China to act as Jelece's liaison with the supplier, checking on the order status and conveying information in English or Chinese as needed. "We've become their eyes and ears in China," Schepers says.
Originally, Jelece planned to ship by air from China. But Icat and its agent were able to split the first few shipments, with some parts going by air and the rest by ocean, saving the client thousands of dollars in transportation costs. Things are going so smoothly now that all shipments come by ocean, and there has been no need for air freight since the third order from the Chinese supplier.
Sanford says that relying on experts to help in areas where his startup company lacks expertise has been invaluable. "Their people are supporting us and are willing to be there whenever we need them. ... Without this type of supply chain support, I don't think we could have hit and exceeded our business targets," he says.