Reporting for AviTrader MRO 360 Magazine, David Dundas speaks to AJW Group’s Head of Asset Management, Lindsay Cooper, to gain her insights into how AJW effectively manages its surplus inventory.
 

First, Dundas asks about the causes of excess inventory. Due to the dynamic nature of the aviation industry, a business may make the decision to bulk purchase inventory items either for financial reasons or to accumulate safety stockpiles at a time when the industry is thriving, only to later experience a shift in the status of the industry leaving them with a surplus.  
 
However, Cooper states that AJW Group has embraced technological advancements that allow for a more sophisticated approach to inventory management. “As an MRO, AJW Group continuously develops its stock management and logistics solutions. By utilising advanced data analytics, we can accurately forecast demand, monitor turnaround times, and adjust inventory levels, accordingly, ensuring the right products are available when and where they are needed thereby avoiding a surplus, or shortage,” she explains. 

Who is best placed to sell surplus inventory, Dundas enquires.  

Cooper advises that excellent industry connections and relationships are key. “Selling surplus inventory item by item can be time consuming, especially if the items are for near obsolete aircraft. It may not be worth the effort… Whether a company has the resources and knowledge to do this is entirely dependent on its internal capabilities, sales network, and established industry relationships.” To further make her point, she tells us that: “AJW has been around for 92 years, building relationships and collaborating with key players across the industry.” 

What options are available to MROs and airlines to monetise surplus inventory, Dundas enquires? 
 
Cooper comments that “one approach is to sell the surplus on a consignment basis, where the inventory is handed over to a third party who specialises in selling aviation parts. This is particularly useful when the third party can access markets or regions where the original owner does not have a strong presence,” she elaborates. 
 
Continuing, Dundas asks which parts have no value in the surplus inventory market. 
 
AJW Group’s Head of Asset Management confirms that “if older aircraft are no longer flying, the demand for their parts is no longer there, making the inventory for these aircraft obsolete with no market value.” 
 
Finally, Dundas asks Cooper what can be done to adjust supply chain or inventory management practices to minimise surplus inventory in the future? 
 
Speaking to AJW’s extensive experience in strategic inventory management and investment, Cooper states that this approach means the company is better positioned to weather inevitable supply chain uncertainties. 
 

“We proactively and continuously source products from teardowns to replenish inventory, helping to meet our customers’ needs and maintain steady parts supply. Maintenance and repair are crucial to operators to avoid AOG situations, so we try to gain a thorough understanding of our customer’s needs to best plan our inventory levels,” she concludes.