Challenges 21st century logistics.

Engine Safety Stock: An Opportunity to Avoid Over-Sparing Engines

Safety stock is a term used by inventory specialists to describe a level of extra stock that is maintained below the cycle stock to buffer against stock outs. Safety stock (also called buffer stock) exists to counter uncertainties in supply and demand. Safety stock is defined as extra units of inventory carried as protection against possible stock outs.

In today's fiscally constrained environment, correct inventory management has become even more critical than in the past. In "Engine Safety Stock: An Opportunity to Avoid Over-Sparing Engines" Duane Anderson examines current engine safety stock processes and levels and makes a case for reducing stock levels.

Currently, the Air Force computes engine safety stocks in the Propulsion Requirements System (PRS), which computes a base safety-stock level (BSL) with a subcomponent including a war ready engine (WRE) target. The BSL forms the basis of many metrics upon which priorities are set and work around actions are undertaken if an engine goes red (below BSL/ WRE target). The current process disregards the aircraft availability target of the aircraft and computes an 80 percent availability based both on demand variation and wartime flying hours. According to Anderson, this computation creates a glut of engine inventory compared to the aircraft availability (AA) target and commodity stock levels, especially for systems with low AA targets.

Anderson proposes a decrease in engine safety-stock levels and inductions by integrating the D200A item-level planning process, the AA planning process, and the engine planning process. Then, he suggests reclaiming lost assets and developing a burn down plan for engines that are clearly overstocked once the systems are more closely integrated.

War ready engines are safety stock, and the current process, Anderson notes, results in an overabundance of this safety stock with little effect on actual aircraft availability and mission capability. Not only are the targets very high compared to the variability of engine demand, but the Air Force often overproduces beyond the WRE target. Engine availability targets need to be balanced with aircraft availability, otherwise there is negative impact on actual mission capability.