Japan Airlines Implements Boeing/Aviall Supply Chain Solution

Airline looks to reduce costs as Aviall manages inventory of maintenance supplies

Airline looks to reduce costs as Aviall manages inventory of maintenance supplies

Dallas — July 19, 2004 — Japan Airlines (JAL) will be looking to reduce maintenance-related costs by avoiding the cost of holding inventory, eliminating spare parts obsolescence and improving overall materials management productivity as JAL becomes the first airline to implement a new supply chain solution offered jointly by Aviall and Boeing.

In other news, Aviall rolled out a new solution for automated replenishment of service parts inventory. Aviall is a solutions provider of aftermarket supply chain management services for the aviation and marine industries.

The program with Japan Airlines allows Aviall to maintain JAL's inventory of maintenance supplies, including spare parts, and provide items to JAL as needed. As the airline reduces its inventory, it will be looking to reduce its cost of doing business.

JAL and Aviall have participated in special "total-cost" focused programs with each other in the past. The Aviall and Boeing partnership, a part of Boeing's Integrated Materials Management Initiative, was originally announced June 16.

"We expect great benefits in our global airline inventory network due to substantial cash flow improvement and enhanced efficiencies in our supply chain management," said Masaaki Haga, executive officer and deputy general manager of Japan Airlines' Engineering and Maintenance Division. "Aviall will make us more productive."

"Japan Airlines completed implementation marks the beginning of a program with great potential for many airlines, and Aviall too," said Dan Komnenovich, president and chief operating officer of Aviall Services. "Not only is it a true, measurable cost-savings program for customers, it allows us to expand the offerings of major manufacturers previously outside our market basket."

Elsewhere, Aviall debuted its eStock Automatic Inventory Management System, rolling out new Web-based functionality designed to give aviall.com customers the ability to automatically manage and replenish their inventory without physically entering orders.

According to Aviall, eStock gives customers the ability to determine desired minimum and maximum inventory levels for parts they purchase on aviall.com. Then customers use a PDA device to scan the inventory at their location and transmit those inventory levels to aviall.com. When inventory on a specific part falls below a customer's previously designated minimum, a replenishment order for that part is automatically shipped to the customer.

Customers can also manage their own eStock items live on aviall.com and determine the frequency and shipping methods for their eStock orders, Aviall said. The eStock program is expected to be in wide release by year's end.

"We know that by saving our customers time, we help them become more productive," said Komnenovich.