State of The Industry: Gavin’s Interview With Aviation Maintenance
Aviation Maintenance magazine ran a State of the Industry report in the April/May edition, featuring our president Gavin Gallogly among other industry leaders.
What technology advancements are needed in the aviation maintenance industry?
The big drivers of technical advancements in the aviation maintenance industry are tied to the collection, optimization and implementation of data. This process will be a key factor in monitoring the health and predictive maintenance of aircraft in the future. MRO’s are being forced to use this information to create integrated logistics and customer support programs that offer a value proposition to their customers. These new advancements, and the MRO’s who successfully embrace them, will improve their supply chains, cut costs and differentiate their products to deliver “measurable” business value and improved bottom lines.
What innovation that your company has made in the last year are you most proud?
At Mitchell, having just celebrated our 30th year servicing the aviation industry, we continuously look to evolve beyond our traditional business model. Most recently, we formed a PMA Development Company called Mitchell PMA, added major distributorships to our expanding portfolio and signed a multi- year component/inventory management program with a global cargo operator. These initiatives help to create value for the company and expand our profile beyond the ad-hoc transactional part of our business. Each year, a higher percentage of our turnover is tied to contractual business transactions as operators become more focused on squeezing efficiencies from the supply chain. If you’re not evolving, you’re in a slow burn to irrelevance.
Name and explain the hardest challenges you will face this year as a leader.
The biggest challenge Mitchell faces going forward is our ability to maintain our relevance within the supply chain. The aftermarket and the supply chain in general are constantly under assault, making it imperative to develop new business models and revenue streams to remain competitive. This industry transformation, led by improved technology, is designed to lower operating costs and improve margins by exploiting the total product life cycle together with the services to support them
There is a saying, “The only constant is change.” How does your company address change in our industry?
In my 25 years’ at Mitchell, the recent acceleration of changes within the industry has been explosive. OEM’s look to focus on after-sale services for their portfolio of products that yield low risk and higher margin revenue streams over the complete product life cycle. These new advancements will be more disruptive and innovative than anything we’ve experienced previously. The challenge will be to use this technology and transfer it into actionable processes that reduce operator costs while improving efficiencies and bottom line revenue. We are shifting from solely being a service provider to one that offers value. Pushing products is no longer good enough, you must deliver measurable value!
What are the biggest barriers your company faces in your quest for success (government, regulations, OEMs, personnel)?
The aftermarket is no longer an afterthought! The last few years have shown a greater focus on the exploitation of the traditional aftermarket model into the latest battle ground for OEM’s, MRO’s, operators and equity companies to capture a greater share of the aftermarket economics. This has driven a consolidation and collaboration like never before. The realignment of products to one which is focused on value added services are designed to match these new market expectations. Mitchell’s challenge is to maintain its relevance within the supply chain while creating measurable enterprise value for our global customer base.
What should we be wary about in our industry during the next five years?
Parts distributors are the very foundation of the supply chain. As a privately owned and independent company operating in this “aftermarket” space for over 30 years, my concern is that the used serviceable material (USM) market is being increasingly controlled by large OEM’s and PBH providers. This development has accelerated in recent years and I think ultimately could have a more negative effect on the industry by driving out competition and leading to increased pricing pressures. The most desirable material is often controlled and captured by these companies, thereby reducing the availability of feedstock for the broader market and thus impacting supply negatively.
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