Background

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.

Challenge

The RAAF has the single largest inventory environment in Australia.

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

Approach

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

In 2001, GRA, a specialist Australian supply chain and inventory optimisation firm, won a multi-year contract to provide inventory management services and implement GAINS, a best-of-breed demand management and inventory optimisation system, across the whole of the Defence Forces.

Outcome

Some of the key results delivered to the RAAF include:

• $186m reduction in inventory (down from $675m to $489m)
• 42% reduction of the number of items held in RAAF warehouses
• 15+ percentage point increase in service levels
• 67% reduction in understocked items, 47% increase in balanced items and 37% reduction in overstocked items
• 70% reduction in the starting inventory management workload
• Importantly – successful culture change

Testimonial: "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)

A Certificate of Appreciation was awarded in recognition of "GRA's outstanding contribution to the optimisation of the ADF's aviation inventory".

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RAAF Success Story