Head Base –Kelowna, BC

BC Supply Chain Council Briefing19 November 2009

Managing the Supply Chain inthe Aircraft MaintenanceIndustry

Bryan AkerstreamMaterials ManagerKelowna Flightcraft Ltd

Agenda

• History• Organization• Business Streams• Geography• Supply Chain Challenges• Supply Chain Solutions• ERP Drivers• ERP Strategic Benefits• ERP Status• Questions

Kelowna Flightcraft was founded in1970 by Barry Lapointe and Jim

Rogers. They identified that therewas a niche market opportunity in

the Okanagan for an aircraftmaintenance company. Theircompany initially performed

inspection checks, maintenance andother various tasks on assorted

small aircraft throughout theOkanagan from the back of a truck.

History

Our Company

KelownaFlightcraft

Ltd.

OntarioFlightcraft

Ltd.

KelownaFlightcraft

R&DLtd.

KelownaFlightcraftAir Charter

Ltd.

KelownaFlightcraft

Leasing Ltd.

Allied WingsProperties

Inc.

Allied WingsF.W. Inc.

Allied WingsProject

Holdings Inc.

Allied WingsInc.

Allied WingsHoldings Inc.

Business Streams

• Maintenance, Repair & Overhaul• Internal• 3rd Party

• Modifications• Avionics• Winglets• Conversions

• Convair OEM• DND SAR

• CC115 Buffalo• CC138 Twin Otter

• Flt Ops• DC10-30• 727-200• Convair 580, 5800

• Allied Wings• Grob 120A• King Air C-90B• Bell 206, 412

Heavy maintenance checks Winglet installationsCargo door installations Avionics modifications

Convair type certificate holder Fire TankersHoneywell avionics dealer Passenger & Cargo Charter

Boeing narrow bodies (727,737,757) Dash 8Convair 340,440,580,5800 Astra 1124 & 1125

Piston/turbine powered light aircraft Cessna CitationEngineering services NDT services Paint Services

Composite services Line maintenance supportField maintenance technical support Aircraft planningAPB approved vendor Bridging maintenance program

Technical review Aircraft Sales and LeasingHeavy maintenance checks Winglet installationsCargo door installations Avionics modifications

Convair type certificate holder Fire TankersHoneywell avionics dealer Passenger & Cargo Charter

Convair 340,440,580,5800 Astra 1124 & 1125Piston/turbine powered light aircraft Cessna Citation

Boeing narrow bodies (727,737,757) Dash 8Cargo door installations Avionics modifications

Honeywell avionics dealer Passenger & Cargo Charter

Our Locations

Primary Maintenance FacilitiesKelowna, British ColumbiaHamilton, Ontario

Satellite BasesVancouver, British ColumbiaCalgary, AlbertaSaskatoon, SaskatchewanWinnipeg, ManitobaThunder Bay, OntarioMontreal, QuebecHalifax, Nova ScotiaSt. John’s, Newfoundland

Legend

Allied Wings Military TrainingCenterPortage la Prairie, Manitoba

Seattle

Phoenix

New York

St. Louis

Atlanta

U.S.A.

CANADA

Supply ChainRole

• Vision

• Provide materials support that exceedsour customers expectations

• Mission

• Support our customers’ operationsthrough timely, cost effective materialssupport

Supply ChainChallenges

• Manual Systems• Paper flow backed by dated database• Difficult to analyze/troubleshoot• Errors cost

• Exponential Growth• Capacity• Experience

• 3000+ Suppliers• Aging fleet/diminishing sources• Quality expectations

Supply ChainChallenges

• Diverse Customers• Diverse Needs/Expectations• Diverse AC Configurations• Multiple Aircraft Types• Multiple Stocking Philosophies• New Age/Old Age Mix

Supply ChainSolutions

• Strategic Planning• Where are we trying to go?• How do we get there?• How do we measure progress?• Continuous Improvement

• Supplier rationalization• Strategic supplier agreements• Consolidation of repair vendors• Performance management

• Continuous Improvement• Integration

• Lawson M3 (ERP) implementation

StrategicPlanning

•Status: Ongoing• Completed:

• Vision• Mission• Environmental Assessment• SWOT

• Next: Objectives• Benefits:

• Team Building• Developing Priorities• Common goals• Evolving focus

SupplierRationalization

• Strategic supplier agreements• AGI• M&M Aerospace• Aviall• Grand & Toy• Unifirst ??

• Consolidation of repair vendors• Status• Focus

• Performance management• Delivery• Cost

ContinuousImprovement

• Re-organization• Focus on materials management• CI driven

• Purchasing Process• Stock priorities

• Re-located Receiving• Improved process flow• Decreased distractions

• Separated/Integrated Receiving/QC• Philosophy: Techs in the “box”

• Materials Cages• Challenges

ERP Drivers

• Growing Complexity in the Business• Long term IT strategy required• Accurate info required to support growth• Current system beyond capacity• Mitigate labour market shortage• Monitor contractual PIF

ERP StrategicBenefits

• Improved control of the business• Meet requirements of DND contracts• Competitiveness• Enable growth: scalable processes/systems• Alignment with industry trends• Future value of business

MM PerformanceCommitment

• What:• 95% Time Definite Delivery Standard• 24 hour to action and have visible req

status• Reduce inventory by $500K per year (3 yrs)

• How:• Improved purchasing efficiency• Integrated system – visibility• Improved analysis

ERP Status

• Acceptance testing delayed• Development on-going• Issues:

• Actual costing of Rotables• Fleet management• Version management

• Goal• Re-start Acceptance testing• Begin implementation Jan/Feb 2010• Implementation plan: flexible

Thank You

Partnered with A.P.B. for Boeing 757-200 / 300 Winglet Installations

Tel: (250) 491-5519Fax: (250) 765-2140www.flightcraft.ca

Bryan Akerstream, Materials Manager

Back-up slides

Our Facilities

• Line Maintenance• Aircraft Painting• Modifications• NDT Services

• Purolator Courier Operations• Heavy Maintenance• Mechanical & Structural• Overhaul Shop• Avionics

• 200,000 sq. ft. of hangar space• 30,000 sq. ft extension in 2008• 5 Hangars

Our Facilities

• 35,000 sq. ft of hangar space• Over 230 employees• Purolator Courier Operations• Heavy Maintenance Checks• Mechanical & Structures• NDT Services• Line Maintenance• Aircraft Painting• Can accommodate wide and

narrow body aircraft

Our Facilities

• 160,000 sq. ft. of hangar space,shops and offices

• 100 experienced staff• Services the Canadian Forces

flight training program• Operates 30 aircraft

(fixed/rotary)• Two full flight simulators

Landing Gear Overhaul

•Complete Landing Gear Repair

•Complete Overhaul

•Disassemble, Strip, Inspect &

NDT Testing .

•Plating Processes are utilized,

including Hard Chrome, Dull &

Bright Cadmiums Plate,

Anodize, Alodine and Nickel

Plating.

•Capable of OD and ID Grinding

•All performed by Certified

Technicians.

Component / Overhaul

•Rotables

•Hydraulics (including test benches)

•Fuel Supply & Control

•Cables & Flight Controls

•Structures Components

•Mechanical Components

•Avionics Components

•Wheels & Brakes

Our Experience

PrivatAir Boeing 737-800 PATS Aux. Tank install and LOPA change.

Flair Air Boeing737-400 Avionics Mods/upgrades, Bridging Inspections and

LOPA changes

Aviation Partners Boeing 757-300 Winglet Prototype.

NAC 737-200 LAP Seam Mod, Scribe Line Inspections, C Checks and Gravel Kit

Installations.

Chartright MD87 Aux Fuel Tank SFAR 88 Compliance

NWA Boeing 757-200 Winglet Installations and various Avionic & Interior

Modifications.

Iceland Air Boeing 757-200 Winglet Installations and Boeing 767-200 Bridging

Checks.

Vulcan Air Boeing 757-200 VIP aircraft C-Checks.

Sunwing Charters Boeing 737-800 Line Maintenance Contract in Toronto.

CanJet Airlines Boeing 737-500 C-Checks.

Sierra Pacific Boeing 737-200 C-Checks.

UPS Boeing 757 Line maintenance in Toronto, Hamilton & Montreal.

Dallas Mavericks Boeing 757-200 and Boeing 767-200 Avionics and Interior

Modifications

Our Achievements

KFL Notable Achievements

Convair Type Certificate Holder of 240/340/440

Partnered with A.P.B. for Boeing 757-200 / 300 Winglet Installations

Joint Venture with Conair Aerospace to build and maintain CV580 Air Tankerfor Fire Fighting role.

With Dugan Air Technologies, jointly created Quiet Wing System Stage 3 STCfor Boeing 727 aircraft.

Created drawing package and won Bolivian Military approval for T33 Avionicsupgrade and overhaul program, (different avionics upgrade program fromCanadian Military aircraft).

Created STC to Stretch CV580 by 14 feet using two 7 foot plugs and upgradeto avionics to an EFIS flight deck.

Created STC for a 122 inch cargo door for installation on CV580 aircraft

KFL Notable Achievements

Convair Type Certificate Holder of 240/340/440

Partnered with A.P.B. for Boeing 757-200 / 300 Winglet Installations

Joint Venture with Conair Aerospace to build and maintain CV580 Air Tankerfor Fire Fighting role.

With Dugan Air Technologies, jointly created Quiet Wing System Stage 3 STCfor Boeing 727 aircraft.

Created drawing package and won Bolivian Military approval for T33 Avionicsupgrade and overhaul program, (different avionics upgrade program fromCanadian Military aircraft).

Created STC to Stretch CV580 by 14 feet using two 7 foot plugs and upgradeto avionics to an EFIS flight deck.

Created STC for a 122 inch cargo door for installation on CV580 aircraft