Improving Inventory Strategies for Consumable Materials in the Aerospace Industry

Aerospace and defense companies often struggle with effective inventory management of consumable material inventories. Unlike piece parts, which have a known and defined required quantity, consumable material requirements may vary from one build to the next, even on different builds of the same parent assembly or part number. This variation and lack of information causes waste, in the form of both expiration of materials and excess labor required to manage these inventories. A main contributor to this waste is an extreme commitment to risk avoidance within the aerospace industry. Aerospace firms do not want material availability to stop the production line for any reason and will often over-order inventory to ensure that does not happen. The threat of shutting down the production line prevents adoption of legitimate and beneficial inventory policy as traditional inventory management strategy is disregarded. This capstone provides the foundation for a new-to-company approach to inventory management strategy in which WOB Corporation (actual company name disguised) may continue to build and improve upon into the future. A pilot program was created and implemented through the course of this capstone project that successfully integrated a new inventory approach for ten strategically important part numbers without negatively impacting ongoing production activity. The pilot program materials were pushed out to the production floor via a Kanban inventory management system for storage until time of use. Benefits realized include an average 50% scrap frequency reduction as compared to the legacy stock keeping strategy. The project also had a significant positive impact on labor cost avoidance equivalent to approximately $15,000 per delivery set of finished products through improved process flows.