IATA drives down material costs through MRO SmartHub
IATA, the International Air Transport Association, chose MRO Europe 2019 to unveil its new online platform aimed at reducing costs for airlines and MRO service providers
The trade association for the world’s airlines estimates the value of the sector at $81.9 billion by the end of 2019, with a significant portion attributed to material costs. IATA has launched the SmartHub to address some of the industry’s biggest current challenges. Airlines and MRO service providers lack the optimum levels of transparency to determine the best price and timeframe of needed material. This can lead to costly resource and supply chain inefficiencies.
SmartHub reduces materials costs up to 15 per cent
IATA’s MRO SmartHub is expected to help airlines and MRO service providers shave 10-15 per cent off material cost through the web-based business intelligence platform. SmartHub users are provided with a multitude of value-added statistics presented in a simplified and efficient method allowing for easier demand consolidation, material procurement, inventory valuations and excess spares resale opportunities.
The MRO SmartHub was launched at MRO Europe, which IATA was attending for the very first time. Brett Wells, Business Development and Commercial Projects at IATA explained why the platform was launched: “MRO Smarthub is an environment that IATA has created to inject applications and services on behalf of the MRO sector to benefit our members and to benefit MROs and other after market suppliers.”
Evaluator and Connector functionalities
He added that the platform had two specific functionalities, Evaluator and Connector: “The Evaluator provides the specific and unique functionality of allowing users and subscribers to actually assess and access fair market value of components in the marketplace based on their condition at any point in time.”
“This is very useful for material management teams in their decision support of what components to buy, or decision support in ‘should I repair or should I buy from the surplus market?’ It’s very important, unique and from the feedback we have had from all of our airline customers, they are very happy that we are moving in this direction. Not forgetting that IATA neutral in all of this, in terms of being able to provide these services.”
The second functionality of the MRO SmartHub is Connector. Wells explained: “We provide a preferred connection between an airliner or an MRO and their preferred suppliers to interlink them via their own commercial conditions but in a preferred way.”
“So you will actually see the prices you will get if you are buying or selling, and you will know that there is stock that’s available, so from a logistics standpoint there is a guarantee that the stock actually exists. There’s no ghosting, and that’s part of the aspects that the industry is trying to address today.