Jun 12 2014

From Tip to Tail: Precision HeliParts Delivers Posted 10 years 199 days ago ago by Admin

From Tip to Tail: Precision HeliParts Delivers

Article, photos, and video by Lyn Burks

Whether it’s something routine, like overhauling one of its many starter generators, or a more urgent need, like replacing an N1 tach indicator that just quit on a helicopter stuck out in the field, when All American Aviation needs a part they contact Precision HeliParts (PHP).

There is a tongue-in-cheek saying that “A helicopter is 5,000 moving parts all trying to do you bodily harm!” Of course, I strongly disagree with the latter part of that statement. However, since every helicopter is indeed made up of thousands of parts, the scenarios above play out hundreds of times every day in a variety of ways all over the world. Fortunately, for thousands of operators in over 60 countries, PHP is part of their solution.

Precision HeliParts is a Precision Aviation Group (PAG) company.  Their mission statement is:
 
“To provide industry leading aviation MRO services and supply chain logistics world wide.”

It’s one thing to write a mission statement. It is quite another thing to execute the mission.

Please understand at the outset, that this company is not just an MRO. Nor is it just an inventory supplier. It’s really a hybrid of the two, and it takes both sides of its business very seriously.  That’s why it has created a comprehensive global system with its own exclusive name: Inventory Supported Maintenance Repair and Overhaul (ISMRO).

Being a helicopter business owner myself, and a student of the art of business, I immediately see that PAG has mastered the tool of leverage. Their business leverages people, technical skills, industry knowledge, inventory, geographic location, and capital strength in order to build a company that is nine operating units deep, with networks that span the globe.

Inventory Strategy

Inventory and shipping are critical to being a global supply chain leader.  PHP supports 75 OEM product lines (which includes fixed-wing aircraft and nearly every make of helicopter) and has over 4,500 customers in over 60 countries. Whether their clients fly Robinson, Bell, Sikorsky, Airbus, MD, or AgustaWestland, they must keep an adequate inventory of parts to handle planned maintenance requests, and be prepared for AOG support as well. Utilizing 185,000 sq. ft. of facilities, PHP consistently maintains a 75,000 line-item capability with an inventory value of $31 million. From gearboxes to generators, from boost pumps to glass panel displays—from tip to tail—there is hardly a part that they do not have and cannot get to an operator quickly.

Location Strategy

A proverbial key to success for restaurants, real estate, and many businesses is location, location, location. However, as it relates to the ISMRO business of PHP, I did not at first consider the locations of its facilities as being really important. Boy, was I wrong! There are several reasons why they located each arm of PHP where they did, but two are most important.

The first important reason is pretty obvious; go where the helicopters are located. Half the world’s helicopters are located in North America, so it’s no surprise that they have two locations in the United States alone. The company has focused like a laser on specific sectors of the industry, as evidenced by the placement of one of its facilities in Louisiana, the heart of the offshore oil and gas support industry. Additionally, there are PHP locations in Canada, Australia, and most recently, Singapore.

The second important reason as to where PHP establishes locations is logistics. PHP shrewdly leverages every logistical benefit imaginable to save time, contain costs, and promote efficiency. The best example of this can be seen at its Atlanta MRO facility and inventory warehouse. Atlanta is home to one of the busiest and largest international airports (KATL) in the world. Not only is the facility near KATL, but also it’s literally hundreds of feet from the airport boundary.

So exactly how does carefully chosen locations help PHP’s customers? Think speed. With thousands of flights out of KATL every day, including those of major shippers like FedEx and UPS, PHP can have a part to support an aircraft-on-ground client packed and shipped in a matter of hours, not days. The PHP shipping department at the Atlanta facility alone receives over 200 packages and ships over 300 packages . . . daily.

Knowledge Base Strategy

In addition to highly skilled inventory, avionics, and maintenance technicians, another major strength PAG has is its own in-house engineering staff. Setting up a shop that can run diagnostic bench tests across hundreds of lines of avionics is extremely expensive. However, according to VP of Sales & Marketing Ketan Desai, PAG’s high level of engineering capability allows them to reverse engineer and create their own test equipment under certain circumstances. Desai says, “Leveraging this special capability can, for example, bring the cost of a particular piece of test equipment from $50 thousand down to $10 thousand.” Doing this over several lines of equipment not only yields significant savings for the company, but also savings for the customer.

Stability Strategy

Scott James founded PAG/PHP in 1993.  David Mast, the current CEO, came onboard when he purchased half the business in 1996.  Since then, following a steady run of acquisitions and new location start-ups, this 200-employee firm has enjoyed a skyrocketing growth rate that’s catapulted the company into the prestigious Inc. 500 list of fastest growing companies in North America.

Although growth is great, PHP is not just trying to grow for growth’s sake. Many years ago, their first goal was to firmly plant their stake into the ground and become a stand-alone repair station/overhaul facility and to also focus on being the “go-to” place for quick inventory.  Once this was established, the company then leveraged all its previously mentioned assets to service very specific markets, intensely focusing on efficiency and cost effectiveness. Thus far, the plan has been executed to perfection.

From the standpoint of ISMRO in the helicopter industry, PHP’s bread-and-butter clients are what they call “mission critical operators.” These operators typically fly in sectors like EMS, SAR, firefighting, law enforcement, and offshore oil support. When an operator calls with a need, the goal is to to get them a new, overhauled, or exchange part within 24 hours or less. “Our large inventory is what allows us to be so responsive, this is what separates us from the competition,” Desai elaborates.

When it comes to MRO offerings however, they are not trying to be all things to all components, nor to all people. They are very pragmatic in their approach as to the lines of repair and overhaul service that they offer.  According to CEO David Mast, “When it comes to capital investment in our future, we are most focused on tooling up for servicing items that will not be changed much, or become obsolete, by the evolution of technology.” He went on to explain that although components like wheels, brakes, generators, fuel controls, and governors are not sexy items, they will not likely be replaced by touchscreens and LEDs any time in the next 30 years.

Components like avionics and instruments are constantly being changed by technology and have become very reliable. On the other hand, items like brakes and generators are high-use items that can be overhauled many times over a lifetime. At the business dinner table, all that repeat business smells like a lifetime of freshly baked “bread.” Precision HeliParts plans to be there for you when you’re starving for fast parts and great service!