A typical day at the material management department of an operator:
Notification arrives that a component has been dispatched and is on its way. With an airway bill number provided by the supplier, we can track the shipment, make preparations and schedule the task to replace the component with the next downtime of the aircraft. The day before this maintenance task is about to take place, we get the news: “Part is in quarantine due to mismatch of information on the Authorized Release Certificate (‘ARC’)”. After further clarification, it seems that the ARC is missing the signature in block 20 on the FAA 8130-3. The potential consequences: the aircraft is AOG, there are flight delays, expensive AOG sourcing of an alternative part and/or waiting until we receive a revised ARC from the supplier. In summary, an avoidable situation, which happens way too often and is costing airlines and operators a lot of money throughout the year.
A missing signature is just one example of many, when it comes to ‘incorrect paperwork’ and when parts need to be held in quarantine until the issue is clarified. The dollar value of parts held in quarantine varies between organisations. However, the fact that these parts cannot be used for a certain period of time causes stress and additional cost to an organisation, both of which are avoidable if suppliers and operators would take advantage of digital technology.
This article looks at ways of how to avoid incorrect paperwork with the use of digital technology and without revolutionising or replacing the entire operating system of suppliers or operators.
Before we get into potential solutions, let’s have a look at how things are done commonly when it comes to exchange of documentation.
Common process
While we understand that organisations might have specific procedures, in general the handling process for an ARC can be described as follows:
Problems with the ARC can originate on both sides, which in most of the cases can be traced back to human factors. The supplier might issue an ARC with incorrect information or forgets to sign the ARC. Equally, errors can also happen on the operator side during the receiving process.
When the supplier sends an email with shipping information to the organisation, a subset of this information contained in the email usually gets transcribed into their own IT system. After the part has arrived in the receiving section of the organisation, the visual inspection process including document check is carried out. Once the document check is successfully performed, the ARC information might have to be transcribed again, depending on the existing IT infrastructure of the organisation (ERP vs. warehouse management system vs. M&E system).
Independently of whether the part is supposed to be stored, or directly prepared for dispatch to the aircraft, the ARC usually needs to be scanned and stored itself, which requires multiple steps of paper handling.
Overall, this manual process is quite vulnerable to error and can cause major disruption in the supply chain and flight operations, costing a huge amount of money.
Shouldn’t our goal be to reduce our vulnerability and develop processes that make use of technology and involve less human intervention?
So what could a new way of handling ARCs look like?
Generating electronic ARCs
In order to handle ARCs digitally, they first need to have a digital representation at the origin, meaning that the supplier needs to be able to ‘sign’ the ARC electronically, i.e. generate an electronic ARC (‘eARC’).
Not all M&E systems allow suppliers to sign off electronically and therefore to issue eARCs. However, it would only require a small investment to add a digital layer of capability to the current M&E system.
In order to trust a digital document, the following needs to be the minimum that is ensured:
Authentication: Ensure that the person signing the document is who they claim they are.
Data Integrity: Assurance that the data has not been altered or tampered with, once it has been electronically signed.
Non-Repudiation: ARC Author cannot dispute its authorship.
One IT firm, Ramco, for example has this feature included in the Ramco Aviation Suite. Once certifying staff is authorised and authenticated to issue certificates of maintenance in the system, they can then access the work orders that can be inspected and for which an ARC needs to be issued. The system connects all the associated master data of the certifying staff like the employee code, employee name, work centre, license number, skill code, and authorisation reference numbers. These are then directly matched to the work order attributes like work centre, part number or aircraft model, etc. to ensure that the certifying staff is authorised to issue an ARC for particular work orders.
Once the ARC has a digital representation, it can be further processed and transmitted electronically. The benefits of an eARC are obvious: avoidance of paper documents and improved data accuracy from the time of generation, as data is pulled from the IT system of the supplier.
Handling of eARCs
Now that we know that we can issue ARCs electronically, we can look at how that would impact the entire process.
We can expect an immediate improvement in the quality of the ARC and the related processing downstream as data accuracy is highly increased at the stage of generating the eARC. The next question is, how do we make sure that the information is transmitted securely?
The solution for this is provided by Aeroxchange. Aeroxchange was established to function as a hub, acting as a single point of connection for all participants, whatever M&E system they use. Aeroxchange "translates" the electronic business documents from one trading partner into a format acceptable to the opposite party. Aeroxchange also maintains a common system of record with transaction time stamping for business operations. Once security and encryption is established with Aeroxchange, secure communications are enabled between all other parties.
In this particular example, both, the supplier and the customer need to have subscribed to an Aeroxchange service such as AeroRepair®.
With this service, Aeroxchange enables both organisations to electronically transmit not only repair order or purchase order related information and documents, but more importantly in this context, it allows the secure transmission of the eARC. Other related documents could include tear down and workshop reports.
For the purpose of a comprehensive comparison, let’s see how a digital eARC would potentially impact the receiving process.
It is of no surprise that we can see a more efficient process. By digitising the ARC, we reduce human intervention to the extent of data validation and the task of linking the ARC to the aircraft record once the component is installed. The actual physical inspection and receipt will be performed based on the validated information provided by the system. It will only be a matter of time that these steps will also be taken over by artificial intelligence and machine learning capabilities embedded in the M&E system.
As a result, we can see a shortened and more efficient receiving process, while at the same time the risk of errors and loss of physical documents through paper handling is reduced.
Summary and benefits
Clearly the eARC is an enabler for more efficient and secure processes for suppliers and customers.
The receiving process today still consumes a lot of resources and takes too long (sometimes extending to weeks). A lot of this time is spent to inspect, cross check and finally transcribe the information from the paper copies of the ARC into the IT system of the operator. Every day a component is stuck in the receiving area, it is not available for the use on an aircraft. As a consequence, inventory levels need to be increased in order to fulfil the demands, which again increases inventory holding cost and CAPEX.
The eARC enables organisations to digitise the entire receiving process. Exchanging the information electronically makes it possible for the documents to arrive well before the part shows up. Any discrepancy in the document can be resolved while the part is in transit, saving time and avoiding parts being quarantined. The organisation does not need to transcribe all the information from a paper ARC into their own M&E or inventory systems reducing the chances of typos and errors.
Also, retrieval of this information is never an issue when operators or suppliers are required to present documentation to regulators or auditors as the information is stored electronically.
In order to satisfy regulatory demands, ARCs have to be stored and archived. Paper copies tend to take up more storage and hence cost more to store. In addition, it usually takes quite some time to retrieve a record. With eARCs, the information is stored electronically and tagged with data elements. Cost for storage is dramatically reduced, space can be made available for more productive operations and the records can be retrieved within seconds, which in return demonstrates strict compliance in processes in front of regulatory bodies. Since data is communicated in a structured manner, it lends itself to be stored and retrieved consistently and reliably.
Digitising the ARC can be achieved without replacing an existing M&E or ERP system or developing a digital strategy first. Often these small steps of digitisation will help to form and develop a natural path of digital transformation. The recommendation here is to seek support from digital enablers such as Ramco and Aeroxchange who have technology ready to go and ready to use, rather than utilising internal resources to develop an unscalable in-house solution.
Many operators are working on adopting the digital transfer of documentation and it will only be a matter of time, when operators will mandate that suppliers need to send the ARCs electronically.
Talk to us, if you want to find out more about the digitisation of ARCs and how your organisation can benefit specifically.
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