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Aviation History
1995
1995 - 0028.PDF
MAINTENANCE Herculean support Providing back-up for the world's Lockheed C-130 Hercules is a big and growing business GRAHAM WARWICK/ATLANTA With more than 1,800 Lockheed C-130 Hercules transports in service with 68 countries, supporting the popular transport is big business — and not just for its manufacturer. Independent com panies play a major role in supporting the Hercules worldwide, a role which is increasing as the fleet ages and operators become more sensitive to parts prices. The C-130-support market, excluding US Government sales, is estimated at $300 million a year by the biggest independent provider, Milwaukee, Wisconsin-based Derco Indus tries. Derco had sales of $57.5 million in 1993, mostly on the C-130. That places the company second in the market behind Lockheed, with $140 million in C-130-support sales, and ahead of third-placed Certified Aircraft Parts, with 1993 sales of $25 million. Derco's sales are increasing at an average of almost 19% a year, says president Eric Dermond. In contrast, Lockheed's product- support revenues are decreasing. In April 1994, the manufacturer formed a venture with Florida-based Certified, called Lockheed Aeronautical Systems Support (LASSC), to compete more effectively with independents such as Derco. Hercules use is increasing as peacetime demand for the aircraft outstrips that expected in wartime. As the fleet ages, customers are less willing to buy new parts for old aircraft, pre ferring instead to have components repaired or to buy reconditioned parts. This trend has fuelled the growth of independent support- The UK's Royal Air Force is a major user of independent C-130 support providers, to Lockheed's disadvantage. Now, the manufacturer has responded by forming LASSC, an independent, low-over head, subsidiary, dedicated to supporting com mercial and foreign-military operators of the C-130. Derco is responding by extending its total-support programme to encompass Lock heed's new C-130J Hercules II and die manu facturer's P-3 Orion maritime-patrol aircraft. The support business is becoming increas ingly sophisticated. Derco maintains an inven tory of some 17,000 line items, worth more than $20 million, with consignments stationed at eight locations worldwide. Customer orders can range from individual items to complete shipsets of components pre-kitted by Derco to support major overhauls. The company is introducing electronic data-interchange. Customers can now check their order status electronically. Ultimately, they will be able to request quotes and place orders via "paperless communication", using the commercial-airline SPEC 2000 standard, Dermond says. Derco has developed from a parts provider to a distributor for C-130 component suppli ers. The company has distribution agreements with more than 30 original-equipment manu facturers (OEMs), ranging from the supply of improved bleed-air ducts to the joint market ing of a Hercules air-refuelling tanker conver sion developed by AEL Industries. Agreements cover Hamilton Standard pro pellers, cockpit armour developed by Simula and a Cubic Defense Systems ground-collision avoidance system. NETWORK ADVANTAGES According to Derco, die advantage to an OEM is that, through a network of more than 40 in- country customer-support representatives work ing with operators of some 550 C-130s, the company is.able to forecast demand for a part more effectively than the component manufac turer. Derco takes the inventory risk, allowing the OEM to move from producing components for stock to just-in-time manufacturing. The customer benefits from Derco's buying FLIGHT INTERNATIONAL 4 - 10 January 1995
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