South African Airways Technical Case Study

EXECUTIVE SUMMARY

South African Airways Technical is a leading MRO organization, located at the hub of Oliver Tambo International Airport in Johannesburg. SAAT currently maintains 67 aircraft for the SAA Mother Company as well as third party customers such as Comair, Air Rwanda, Air Zimbabwe and Air Namibia. SAA Technical has proven itself to be the most technologically advanced full service maintenance, repair and overhaul company with full FAA certification, in Africa.
The SAA Corporate Group Strategy and the SAA Technical long term turnaround strategy have been outlined. Overseas Repairs, a subsection falling under Supply Chain in SAA Technical will be analyzed in terms of the current strategic direction of the department, and how it supports

The associative costs of shipping, lost and damaged goods, packaging, government taxes, customs and excise taxes and the logistics provider fees combined would effectively save the organization millions. SAAT’s budget for logistics is estimated around 240 million rand annually. Using the break-even-analysis (Ch 2 Pg 53 Supply Chain Management) would be an effective tool to determine cost effectiveness of the current process and correct any assumptions. Combining the transaction and associative costs with the cost of repair and comparing them with the cost of acquiring the technology and expertise to do the work in house would be a good way to determine which option is in actual fact, to the real benefit of

Develop a strategic alliance with certain suppliers, to the benefit of both organizations.

WHAT CAPABILITIES DO WE HAVE
• Our geographic location allows us direct access to the major hubs of the world via a single flight. This would enable us to source and develop alliances with key suppliers from major MRO suppliers worldwide instead of using multiple suppliers.
• SAAT, as the biggest MRO in Africa can maximize on the concept of ‘taking Africa to the world” by aggressive marketing of services within Africa.
• SAAT’s reputation is one of having the highest safety records worldwide and can be effectively used in marketing strategies.
• Idle, trained capacity at hand to take on more work if in-sourcing does occur
• Adequate facilities with sufficient space to house more equipment and tooling for the technological advancement of workshops.

CONCLUSION

We now ask ourselves, that should strategic change not come about in the Overseas Repairs department, how then are we aligning the department to support the organization in meeting the goals and objectives of the long term turnaround strategy? Will there be a resultant tendency towards strategic