Key benefits

• $186m inventory reduction
• 67% reduction in understocks
• workload reduced by 70% due to the exception based planning process
• successful culture change – from purchasing to inventory optimisation
• created a direct link between strategic goals and day-to-day activities
• sustained benefits and results
• integration of financial and inventory planning

Operating environment

• 70 locations
• 600,000 items
• commenced with $675m in inventory
• local & overseas suppliers
• long lead times
• slow moving items
• 140 planners
• MRO environment

$186 million inventory reduction

“We saved $14m in six months – here are the graphs. We’re used to being promised these kinds of numbers; we’re just not used to having them delivered.”
Wing Commander, Royal Australian Air Force (RAAF)


In 1994, the RAAF initiated a project to identify the opportunities associated with improving service levels, reducing inventory costs and balancing assets across the distribution network. An improved process was defined for delivery of the RAAF’s opportunities, and the adoption of an inventory optimisation system / APS was identified as a fundamental part of the solution. After an exhaustive worldwide software selection process was undertaken, GAINS was selected as the preferred system.

The RAAF has been using GAINS to manage the break down spares for aviation equipment since November 1996.

As a result of the implementation of GAINS:

• the RAAF has decreased inventory by $186m, (see figure 1)

• the RAAF inventory has moved significantly towardsa balanced condition,

• the number and the depth of understocks has more than halved (67% reduction) since GAINS was turned on, (see figure 2)

• pro-active redistribution of inventory has reduced excess and improved service levels by using existing inventories to satisfy demand rather than purchasing, (see figure 3)

• the views of inventory performance provided by GAINS are directly supporting RAAF efforts to strategically manage the inventory,

• the RAAF has a significant in-house capability to conduct ‘what if’ simulations on the spares inventory. This enables RAAF to segment the inventory intelligently and to develop better contracting arrangements for inventory.

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Royal Australian Air Force