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Efficient Supply Chain Management at the U.S. Coast Guard Using Part-Age Dependent Supply Replenishment Policies

Author

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  • Vinayak Deshpande

    (Krannert School of Management, Purdue University, West Lafayette, Indiana 47907)

  • Ananth V. Iyer

    (Krannert School of Management, Purdue University, West Lafayette, Indiana 47907)

  • Richard Cho

    (University of New Brunswick Saint John, Saint John, New Brunswick, Canada E2L 4L5)

Abstract

The United States Coast Guard (USCG), now part of the Department of Homeland Security, has the mission to secure the U.S. coastline using a combination of air and sea capabilities. This paper focuses on an application of operations research techniques at the USCG to improve the performance of its aircraft service parts supply chain. We focused on evaluating the supply chain benefits from linking the aircraft maintenance database with the aircraft parts inventory database. This required us to (a) develop an approach to link the databases and (b) use aircraft maintenance information to improve the inventory management of service parts at the USCG. We first used mathematical programming tools to merge the maintenance database with the demand database. We then developed state-dependent supply replenishment policies that use part-age information to manage the service parts supply chain. We show that one of the proposed policies permits analytic estimation of the benefits of linking the data sets. The impact of these inventory policies was evaluated using empirical demand data for 41 critical parts over a five-year period. Computational results suggest that our proposed policies can lead to significant reductions in inventory cost over the current system, as high as 70% for some parts. Based on the insights from this study, the USCG is currently contracting with commercial vendors to develop an operational database and decision-support implementation across all parts.

Suggested Citation

  • Vinayak Deshpande & Ananth V. Iyer & Richard Cho, 2006. "Efficient Supply Chain Management at the U.S. Coast Guard Using Part-Age Dependent Supply Replenishment Policies," Operations Research, INFORMS, vol. 54(6), pages 1028-1040, December.
    • Handle: RePEc:inm:oropre:v:54:y:2006:i:6:p:1028-1040
    DOI: 10.1287/opre.1060.0327
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    References listed on IDEAS

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    2. Zhu, Sha & Jaarsveld, Willem van & Dekker, Rommert, 2020. "Spare parts inventory control based on maintenance planning," Reliability Engineering and System Safety, Elsevier, vol. 193(C).
    3. Yongquan, Sun & Xi, Chen & He, Ren & Yingchao, Jin & Quanwu, Liu, 2016. "Ordering decision-making methods on spare parts for a new aircraft fleet based on a two-sample prediction," Reliability Engineering and System Safety, Elsevier, vol. 156(C), pages 40-50.
    4. Feng, Haofang & Zhang, Sheng Hao & Zhang, Yong, 2023. "Managing production-inventory-maintenance systems with condition monitoring," European Journal of Operational Research, Elsevier, vol. 310(2), pages 698-711.
    5. Dursun, İpek & Akcay, Alp & van Houtum, Geert-Jan, 2024. "How good must failure predictions be to make local spare parts stock superfluous?," International Journal of Production Economics, Elsevier, vol. 267(C).
    6. Lin, X. & Basten, R.J.I. & Kranenburg, A.A. & van Houtum, G.J., 2017. "Condition based spare parts supply," Reliability Engineering and System Safety, Elsevier, vol. 168(C), pages 240-248.
    7. Adem Örsdemir & Vinayak Deshpande & Ali K. Parlaktürk, 2019. "Is Servicization a Win-Win Strategy? Profitability and Environmental Implications of Servicization," Manufacturing & Service Operations Management, INFORMS, vol. 21(3), pages 674-691, July.
    8. Michael R. Wagner & Zinovy Radovilsky, 2012. "Optimizing Boat Resources at the U.S. Coast Guard: Deterministic and Stochastic Models," Operations Research, INFORMS, vol. 60(5), pages 1035-1049, October.
    9. Igor Rosa Dias Jesus & Helder Gomes Costa, 2015. "Interfaces between production engineering and the public affairs: evidences from bibliometric analysis," Scientometrics, Springer;Akadémiai Kiadó, vol. 105(2), pages 1183-1193, November.
    10. Van der Auweraer, Sarah & Zhu, Sha & Boute, Robert N., 2021. "The value of installed base information for spare part inventory control," International Journal of Production Economics, Elsevier, vol. 239(C).
    11. Bram Westerweel & Rob Basten & Jelmar den Boer & Geert‐Jan van Houtum, 2021. "Printing Spare Parts at Remote Locations: Fulfilling the Promise of Additive Manufacturing," Production and Operations Management, Production and Operations Management Society, vol. 30(6), pages 1615-1632, June.
    12. Fabian Taigel & Anselme K. Tueno & Richard Pibernik, 2018. "Privacy-preserving condition-based forecasting using machine learning," Journal of Business Economics, Springer, vol. 88(5), pages 563-592, July.
    13. Dinis, Duarte & Barbosa-Póvoa, Ana & Teixeira, Ângelo Palos, 2019. "A supporting framework for maintenance capacity planning and scheduling: Development and application in the aircraft MRO industry," International Journal of Production Economics, Elsevier, vol. 218(C), pages 1-15.
    14. Kent Everingham & Gary Polaski & Frederick Riedlin & Michael Shirk & Vinayak Deshpande & Ananth V. Iyer, 2008. "Operations Research Enhances Supply Chain Management at the US Coast Guard Aircraft Repair and Supply Center," Interfaces, INFORMS, vol. 38(1), pages 61-75, February.
    15. Topan, E. & Eruguz, A.S. & Ma, W. & van der Heijden, M.C. & Dekker, R., 2020. "A review of operational spare parts service logistics in service control towers," European Journal of Operational Research, Elsevier, vol. 282(2), pages 401-414.
    16. Van der Auweraer, Sarah & Boute, Robert N. & Syntetos, Aris A., 2019. "Forecasting spare part demand with installed base information: A review," International Journal of Forecasting, Elsevier, vol. 35(1), pages 181-196.
    17. Basten, Rob J.I. & Ryan, Jennifer K., 2019. "The value of maintenance delay flexibility for improved spare parts inventory management," European Journal of Operational Research, Elsevier, vol. 278(2), pages 646-657.

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