Pilatus Aircraft Optimizes Inventory Management

Pilatus Aircraft Ltd. (Pilatus) is an independent subsidiary of the Pilatus Group, founded in 1996 with headquarters in Broomfield, Colorado. The company markets, sells, and maintains all Pilatus aircraft in North and South America. The company seeks to improve on-time deliveries of all its repair parts, with an emphasis on its high-importance Priority 2 (${\mathcal{P}}_2$) orders, that is, critical parts associated with an aircraft-on-ground status. A (Q, R) inventory review model, that is, one in which an order of Q is placed when inventory falls below R, improves the mix of parts held at the Broomfield warehouse to more quickly service customer orders; a separate optimization model correspondingly motivates antiquated part liquidation. Over the course of 18 months, our solutions improve on-time deliveries of all order types by 4.7 percentage points while specifically improving on-time deliveries of Priority 2 orders by 5.9 percentage points. Correspondingly, during the most recent year at the time of this writing, that is, 2024, by its own independent calculation, Pilatus reduced the value of goods held in inventory by nearly 21% (excluding the decrease owing to liquidation). The company uses our models as inventory stocking and liquidation guidance.

History: This paper was refereed.

Funding: This work was supported by Pilatus Aircraft Ltd.