When it comes to managing MRO operations in an integrated manner, there are two types of solutions that are commonly used. The first is Enterprise Resource Planning (ERP) software that has been designed for use in a wide range of businesses, with the ability to be customized to some extent for each of them. The second is MRO IT enterprise management (MRO IT) system software that has been purpose-built to serve the aviation maintenance, repair and overhaul industry.
What ERPs Can Do for MROs
ERP systems are used by industries such as manufacturing to integrate business functions such as finance, human resources, inventory management, and production planning into end-to-end unified platforms. This makes it possible for all aspects of the business to be seen and managed using a common shared system. Such integration makes it easier for managers to stay on top of what’s going on, and to spot and remedy problems quickly when they occur. Oracle, SAP, and Microsoft are among the big names in the ERP market.
One potential advantage of using standard ERP systems and customizing them for use in the MRO sector is cost. Since ERP systems are widely used across lots of different industries, they often come with a lower price tag compared to MRO-specific solutions. This is because ERP vendors sell in higher volumes than MRO IT systems vendors due to their sales into many markets. This higher volume allows ERP vendors to lower their per-unit cost.
A second advantage of using ERP systems is training costs, but only if employees in the MRO are familiar with using ERP systems from other industries.
As well, ERP systems can be modular in their design, allowing customers to only buy those components that are relevant to their businesses. Meanwhile, basic business practices like accounting, inventory, customer databases, and sales are common to every industry, and can easily be adapted in a standard ERP system. In fact, some ERP modules may not need any customization at all.
A further advantage associated with ERP systems is the ability to enable improved integration across different departments within an organization. Once an ERP system is in place, information flows seamlessly between departments. This enables better coordination and decision-making throughout the organization.
As to whether ERP systems can be sufficiently customized to work well in the MRO sector? That depends on the specific ERP system, said Saravanan Rajarajan Saran, Ramco Systems’ director of solution consulting. “Effective usage of the ERP in core maintenance operations depends on how flexibly the ERP can be configured to unique maintenance requirements, both in terms of usability and functionality,” he explained. “For example, an airline wants to see an aircraft’s manufacturer serial number rather than having it recorded in the ERP as a generic asset number.”
What Makes MRO IT Systems Stand Out
The big difference between ERP systems and MRO IT systems is that the latter have been designed with MRO requirements and functionality in mind. As such, these platforms are tailored to the specific needs of the MRO industry, their clients and suppliers. This means that major program customization is unnecessary, which is not the case with standard ERP system software.
One such MRO IT system is made by Ramco. “The Ramco Aviation Solution is a fully web-centric application developed from the ground up specifically for the aviation industry,” said Saran. This system offers an integrated platform for airlines, defense clients, helicopter operators and MROs to centrally manage functions such as maintenance and engineering, supply chain, safety, compliance, quality, planning and financial control, among others.
“ERP software is generally built to be ‘industry agnostic’,” said Saran. “It can be configured for the given deployment based on specific industry needs, to a certain degree. In contrast, MRO-specific IT systems are built to address the specific industry, segment or function within the aviation industry. ERP systems normally encompass most of the functional modules required for an organization — for example, Human Resources, Finance, Supply Chain, Maintenance, and Engineering — whereas MRO-specific IT systems may need to interface with additional systems to support a company’s complete organizational needs.”
Swiss AviationSoftware (Swiss-AS) is another maker/vendor of MRO IT system software. Its AMOS system “has been on the market now for more than 30 years,” said Chris Clements, senior sales representative with Swiss AviationSoftware. “This solution has established itself as one of the go-to solutions when new businesses are looking to upgrade their current solution or indeed start-ups who are looking for best of breed from Day One. Within a single solution, MRO activities can be managed from first contact, quotation, execution and ultimately billing.”
Like many ERP systems, AMOS is modular. This means that different components can be fitted together to customize the solution as needed.
AMOS starts with a “core solution,” Clements explained. “Then you can add various optional modules such as AMOSmobile/EXEC, the mobile solution for maintenance technicians; AMOSmobile/STORES, which allows stores keepers to work away from the stores counter; and most recently AMOSeTL, which brings AMOS on board the aircraft and puts it directly in the hands of pilots, cabin crew and technicians.
Because they are not cookie-cutter solutions, MRO IT systems tend to cost more than ERPs and can take longer to implement. But that’s the price for adopting an enterprise management system tailored specifically to the MRO industry’s needs, and the benefit. “AMOS’ strength as an MRO-specific software solution lies first and foremost in its integration capabilities, both internal and external,” said Clements. “The totally integrated processes that AMOS provides ensures that the flow of data is seamless, supporting the customer’s processes whilst ensuring consistency and real-time updates.”
In situations where an MRO needs to connect its system to those of external customers such as airlines and suppliers, an MRO IT system such as AMOS “has a huge number of APIs available” to make this possible, Clements said. “This enables consistency and real-time updates across all of the connected systems. Again, as a software solution, AMOS has been developed from day one from within an aviation environment (Crossair) to ensure that industry needs were met directly.”
One area where ERP systems may not be able to meet MRO requirements is the specialized maintenance and repair processes used in the aviation industry that are not employed anywhere else. In contrast, MRO IT systems are specifically designed to manage complex aircraft maintenance workflows, track aircraft components and their service history — which is very important in this time of widespread counterfeit parts — handle work orders and inspections, and ensure that everything being done within the organization complies with regulations.
As well, trying to adapt a broad-based ERP system to meet MRO industry needs can be daunting. At the very least, doing so will require “considerable time, deep expertise, and customization costs to develop and maintain this ERP system over the life cycle of its usage,” said Saran.
In addition, there will be exposure to risk by the ERP’s users due to the reconfiguration of the system and the use of potentially untested alterations to make it work. “Then there is the learning curve for the users,” Saran said. “The ERP may not work the way they are accustomed to, so learning to use the ERP tends to be longer when compared to MRO-specific IT systems.”
Because they are purpose-built for aviation, MRO IT systems are more likely to integrate seamlessly with related software applications such as flight operations management and inventory control. This allows for better coordination between different departments within an MRO or airline, justifying the decision to use an MRO IT system rather than an ERP.
A further area where ERP systems may fall short is with respect to industry-specific analytics and reporting requirements. Many MRO IT systems are designed to provide detailed insights into aircraft performance, maintenance costs, and forecasting for future needs. These features allow airlines to make data-driven decisions regarding fleet maintenance, and MROs to tailor their offerings to these decisions accordingly.
“MRO IT systems are designed within the context of industry practices, which means that the solution can be deployed with no, or minimum, customization,” said Saran. “As MRO IT systems R&D is focused on a specific domain, products get enhanced continuously with respect to regulatory and statutory requirements. In ERP deployments, such enhancements may result in additional costs, depending on the extent of vendor support and/or customization.”
Making the Choice
We’ve seen the facts. So how does an MRO decide between an ERP and MRO IT system? Should they base the decision on cost or capability?
The answer lies in what the MRO is seeking from its enterprise management platform. “If the organization wants a higher degree of fit or quick turnaround, then the MRO IT systems options would be the best fit,” Saran said. “An ERP could be the best fit if the organization has the preparatory knowledge to execute whatever needs to be customized and has the internal talent to maintain the system.”
Another salient question to ask is what is the ‘Total Cost of Ownership’? For instance, an ERP may cost less than an MRO IT system initially, but a user has to factor in the additional costs of making the ERP work in an MRO environment? Is the ERP really ‘off-the-shelf’ ready or does it require customizations and maintenance that will push up its total cost? And remember: It’s a well-known fact that cookie-cutter ERP systems make their bread and butter on customizations.
“At Swiss-AS, convincing customers to invest in AMOS can be a challenge for our salespeople,” Clements admitted. “However, this challenge is quickly overcome when clients determine the best path for realizing added value in their business. “When supporting our sales prospects in making their best decisions, we are able to demonstrate that AMOS offers the opportunity to implement industry best practices, ensure consistency in data quality and ultimately have control of all the events driving financial data and processes. As well, for those clients who want to digitalize their businesses, Swiss-AS is able to provide digital solutions that combine mobility and paperless processes.”
The Bottom Line
There is no doubt that standardized ERP systems, when properly customized, can provide efficiencies for the MRO industry. Nevertheless, there is no doubt that the more focused functionality offered by MRO IT systems is more intrinsically suited to the needs of the aviation industry.