Like several other companies in the aviation industry, Delta Air Lines Inc. has come to the realization that it needs to install third-party spare parts management software to fill in functional gaps in its enterprise resource planning (ERP) and supply chain management system.
The Atlanta-based airline this week announced plans to augment its SAP AG back-office system by adding a maintenance management application developed by Xelus Inc. in Fairport, New York. Walter Taylor, Delta's ERP program director, said he expects the Xelus software to help reduce the size of the airline's spare parts inventories and ensure that parts are available at various airports when they're needed.
Delta went live with the finance modules in SAP's R/3 suite last July after doing "a great deal of analysis from the business perspective," Taylor said. But, he added, the airline picked Xelus for its maintenance operations because that application has industry-specific features aimed at optimizing the handling of spare parts -- capabilities that SAP doesn't offer.
The decision by Delta follows a similar move late last year by London-based British Airways PLC, which is also doing an SAP R/3 implementation to replace a series of homegrown applications (see story). Other aviation-related companies that have signed on with Xelus include Alaska Airlines Inc. in Seattle and Aviall Inc., an aircraft parts distributor in Dallas.
Delta plans to flip the switch on the Xelus application next summer along with SAP's warehouse and inventory management software and its demand planning tools, according to Taylor. He declined to disclose any details about the cost of the project or the return on investment that the airline expects to get by using the software.
Taylor did say that the Xelus software should be especially useful at smaller "spoke" airports, such as the one in Jacksonville, Florida. That's a high-priority location for Delta, he said, but the airline doesn't have access to other carriers with which it can swap parts as needed. The software is supposed to forecast parts requirements based on sophisticated variables, such as how busy an airport is and what sort of planes typically land there, Taylor added.
A spokesman at SAP's U.S. subsidiary in Newtown Square, Pennsylvania, said the Xelus software is "a minor component" of the overall ERP and supply chain system that Delta is installing. The third-party application isn't replacing a similar module from SAP as part of the airline's system, the SAP spokesman said.
Dwight Klappich, an analyst at Meta Group Inc. in Stamford, Connecticut, said SAP's Advanced Planner and Optimizer (APO) supply-chain tool is the most comparable product to the Xelus software that's offered the Walldorf, Germany-based vendor. But APO doesn't have the same kind of airline-specific maintenance management features that the third-party product does, Klappich added.