Copa Airlines broke ground for its new hangar in Panama Jan. 19. Copa Airlines Concept

Copa Airlines’ Purchasing Director On Preparing For 737 MAX

Copa’s MRO strategy stresses efficiency improvements as it prepares for service entry of the 737 MAX.

Printed headline: Copa Airlines

Rafael Samudio, Copa Airlines’ director of technical purchasing, joined the airline in 1989 as a part-time Boeing 737 mechanic while he finished college. He finished his degree in electrical engineering and moved up to maintenance planning and eventually to technical purchasing. He spoke with Lee Ann Shay in Panama about the impact of Copa’s growing fleet on technical purchasing.

What are your responsibilities?

My responsibilities span from buying bolts to repairs for aircraft and engines, as well as warranty management. I also have the material planning organization, which estimates the rotables and consumables we need to buy based on past usage and future demands. Based on requisitions from material planning, procurement agents start sourcing parts. I’m also in charge of the warehouse and the inventory at our line stations. The AOG team includes technicians who we’ve taught how to buy. It’s easier to teach technicians to buy than teach others how to fix aircraft. They will send parts, tooling, technicians or whatever is needed to rescue an AOG aircraft at any station. Those are the main functions of my organization.

How do you manage warranty claims?

Copa Airlines

Copa plans to finish this new hangar in the fourth quarter.

Twenty years ago, we operated second-hand aircraft that didn’t have any kind of warranty. When we started getting new aircraft, we realized there were a lot of warranty remedies that you’re entitled to, but you have to have an organization that can trace them. It’s not just the parts that break, but it’s also any kind of repair you do. You can say to the OEM, ‘I’ve spent X number of hours on this aircraft,’ so you can claim repair labor-hours. When there are service bulletins or service letters, those are free of charge and are open for a set number of years, so if you don’t claim them, you lose the remedies. So this team chases service bulletins that can improve your reliability and places purchase orders from Boeing, in this instance, to get the parts or kits to install on the fleet. This helps us increase reliability and lower costs: If you don’t have this kind of follow-up, you’ll have to pay for it later.

As your fleet expands, will your inventory correspondingly grow with it? Will you be able leverage greater buying power?

The advantage of the 737 MAX and NG is that they have a lot of parts in common. When we were planning initial provisioning, we determined that we already have most of the consumables, so it’s just a matter of ordering more parts but not many new parts. The main difference between the MAX and NG is the engine, so those are the parts we’ll need. The MAX is more fly-by-wire, too, so there are some differences, but nothing to worry about. The main concern is the engines.

How are you preparing for the 737 MAX entry into service?

This is my third entry into service (EIS) because I also did it for the introduction of the 737NG and Embraer E190. This time it will be easier because of the similarities with the NG. EIS is complicated because you need to coordinate a lot of tasks among maintenance, flight ops, training, inflight, crew, onboard services—so there are lots of tasks to accomplish to be ready for the first flight. We have a list of about 300 tasks in different categories including the main areas I mentioned, as well as safety, IT, etc. Each month, I prepare and distribute the next 120 days of tasks that will be due. The idea is to have meetings with all of the teams and Boeing to see if there are tasks that are putting the delivery or entry into service in jeopardy. So far, everything is green.

Copa prides itself on being lean and efficient. What is your budget?

I can’t give you the exact number, but doing budgets is a challenge for us because of all the details we track. For repairs, for example, based on the number of hours that we estimate to fly, we predict the number of removals per component to form our budget. We are very detail-oriented; even for life vests, we estimate how many we will remove. We track price and quantities, so we can see how they align with the budget, and we can see whether we’re having more repairs than estimated. Components under power-by-the-hour agreements are easier, because you just multiply the rate times hours. Time-and-material repairs take longer to plan for.

How do you decide what to in-source versus outsource?

We try to find opportunities to save money every day. If we have a component that we’re removing too often and the price is too high, we start looking at return on investment (ROI) to see if it makes sense to start an in-house capability. If it makes sense and has a positive ROI, we’ll invest to save money—but not to open shops for the sake of opening shops. All of our shops have gone through the ROI process, where we review all costs, even electricity, personnel, parts—everything—to see if it’s a valid ROI. Every year when we prepare our repair budget, we take the top five removal components to see if it makes sense to bring them in-house. We always look for opportunities to open in-house capabilities.

It seems like the industry wastes a lot of composite material due to not effectively managing quantities and shelf life. Given that Copa’s composite shop will be expanding in both size and capabilities, is this an issue?

Three years ago, we used to scrap a lot of materials because they expired. So we started a program that involved warehouse staff and purchasing agents in both quality control, maintenance and engineering. Together, we review what will expire in next two months. We work with planners and look what maintenance can be done before the material expires. We also used to throw away a lot of decals due to shelf life. We proactively manage them too and have saved more than 25% of scrap in each of the last three years—25%, 25% and 25%. 

This was a group effort. We started reviewing who bought the part or material and why they bought it: Were there minimum buys or an AOG? Out of that investigation, we realized that sometimes maintenance asked for more than what they needed because stores never had the parts when they needed them—so instead of just buying one, they requested more than what they needed. So we started putting names to the purchases for accountability and sending the reports to their managers. Mechanics saw that they shouldn’t order more than what they needed. We worked together, and started changing that mentality. 

Copa Airlines

Rafael Samudio, Copa Airlines’ director of technical purchasing,

Copa Airlines

FLEET: 2017 (100), 2018 (106), 2019 (111), 2020 (125)

2018 FLEET: 19 Embraer E190ARs, 11 Boeing 737-700s, 71 737-800s, 5 737 MAX

Average Fleet Age: 7 years

Number of Technical Ops Employees: 2017: 1,007 2018: 1,103

Destinations: 78 in 32 countries

Panama Tocumen Airport (Copa’s hub): Copa represents more than 80% of daily operations

2017 Flight Completion Factor: 99.4%

2017 Fleet Maintenance Dispatch Performance: 99.6%

 

 

Caption: Rafael Samudio

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