Wesco Aircraft Holdings, Inc. distributes and provides supply chain management services to the aerospace industry worldwide.
The company’s services range from traditional distribution to the management of supplier relationships, quality assurance (QA), kitting, just-in-time (JIT) delivery, chemical management services (CMS), third-party logistics (3PL) or fourth-party logistics (4PL) programs and point-of-use inventory management. It supplies approximately 550,000 active stock-keeping units (SK...
Wesco Aircraft Holdings, Inc. distributes and provides supply chain management services to the aerospace industry worldwide.
The company’s services range from traditional distribution to the management of supplier relationships, quality assurance (QA), kitting, just-in-time (JIT) delivery, chemical management services (CMS), third-party logistics (3PL) or fourth-party logistics (4PL) programs and point-of-use inventory management. It supplies approximately 550,000 active stock-keeping units (SKUs), including C-class hardware, chemicals, electronic components, bearings, tools and machined parts.
The company serves its customers under both long-term contractual arrangements (Contracts), which include JIT contracts that govern the provision of outsourced supply chain management services and long-term agreements (LTAs) that set prices for specific products; and ad hoc sales.
The company serves approximately 7,000 customers, which are primarily in the commercial, military and general aviation sectors, including the major original equipment manufacturers (OEMs) and their subcontractors, through which it supports the company’s major programs, and also sells products to airline-affiliated and independent maintenance, repair and overhaul (MRO) providers. The company also services customers in the automotive, energy, health care, industrial, pharmaceutical and space sectors. It operates across 55 locations in 17 countries.
Products
Hardware: Fasteners, the company’s major category of hardware products, include a range of engineered aerospace parts that are designed to hold together two or more components, such as rivets (both blind and solid), bolts (blind bolts), screws, nuts and washers. Majority of these fasteners are designed for use in specific aircraft platforms and others could be used across multiple platforms. Materials used in the manufacture of these fasteners range from standard alloys, such as aluminum, steel or stainless steel, to materials, such as titanium, Inconel and Waspalloy.
Chemicals: The company’s chemical product offerings include adhesives; sealants and tapes; lubricants; oil and grease; paints and coatings; industrial gases; coolants and metalworking fluids; and cleaners and cleaning solvents.
Electronic Components: The company offers interconnect and electro-mechanical products, including connectors, relays, switches, circuit breakers, lighted products, wire and cable and interconnect accessories. It also offers assembled products, including mil-circular and rack and panel connectors and illuminated push button switches.
Bearings: The company’s product offering includes various standard anti-friction products designed to both commercial and military aircraft specifications, such as airframe control bearings, rod ends, spherical bearings, ball bearings, needle roller bearings, bushings and precision bearings.
Machined Parts and Tooling: The machined parts that the company distributes include laser cut or stamped brackets, milled parts, shims, stampings, turned parts and welded assemblies made of materials ranging from steel or titanium to nickel based alloys. It stocks a range of tools needed for the installation and removal of majority of its products, including air and hydraulic tools, as well as drill motors. It also offers factory authorized maintenance and repair services for these tools. In addition to selling these tools, the company rents or leases these tools to its customers.
Services
In addition to its traditional distribution services, the company has developed services, such as QA, kitting, JIT supply chain management, CMS and 3PL/4PL programs for its customers.
QA
The company’s QA function is a key component of its service offering. Its QA capabilities also allow its JIT customers to reduce the number of personnel dedicated to the QA function and reduce the delays caused by the rejection of improperly inspected products.
Kitting
All of the company’s kits and components contain certified and traceable products and are assembled by its kitting department at its central stocking locations, or at its customer sites.
JIT Supply Chain Management and CMS
As part of its JIT programs, the company assumes custody of the customer’s existing inventory at the onset of the contract, reducing their inventory on-hand and the associated management costs. As the consigned inventory for each SKU is exhausted, the company’s stock of Wesco-sourced product is then used for replenishment. In certain circumstances, it also provides its JIT and CMS customers with additional value-added services, including the implementation of process control and usage reduction programs; safety data-sheet management, support for environmental, health and safety compliance and reporting; and assistance with the development of waste management strategies.
Aftermarket Sales
The company sells products to airline-affiliated, OEM-affiliated and independent MRO providers on both a Contract and ad hoc basis. It has presence in both the commercial and military aerospace MRO markets. In addition, the company has targeted domestic and international airlines and maintenance centers.
Customer Contracts
The company sells products to its customers under two types of arrangements, Contracts, which include JIT supply chain management contracts and LTAs, and ad hoc sales.
Contracts
JIT Contracts: Under JIT contracts, customers commit to purchase specified products from the company at a fixed price or a pass-through price, on an as needed basis, and it is responsible for maintaining high levels of stock availability of those products. JIT contracts contain termination for convenience provisions, which allow its customers to terminate their contracts on short notice and provide for it to be reimbursed for the cost of any inventory specifically procured for the customer or inventory that is not sold to its other customers.
LTAs: LTAs allow the customer to buy contracted SKUs from the company and might obligate it to maintain stock availability for those products. Once an LTA is in place, the customer is then able to place individual purchase orders with it for any of the contractually specified products. LTAs contain termination for convenience provisions, which allow for the company’s customers to terminate their contracts on short notice and provide that it is reimbursed for the cost of any inventory primarily procured for the customer or inventory that is not sold to other customers. LTA customers also frequently purchase products from it on an ad hoc basis, which are not captured under the contractual pricing arrangement.
Ad Hoc Sales
Ad hoc sales represent products purchased from the company on an as-needed basis and are supplied out of its existing inventory.
Customers
During the year ended September 30, 2019, Lockheed Martin represented approximately 13% of the company’s total net sales, consisting of multiple contracts across multiple independent programs such that no individual contract is material.
During the year ended September 30, 2019, 73% of the company’s net sales were derived from major OEMs, such as Airbus, Boeing Company, BAE Systems, Bombardier, Cessna, Embraer, Gulfstream, Lockheed Martin, Northrop Grumman and Raytheon, and majority of their subcontractors. Government sales included 16% of its net sales and were derived from various military parts procurement agencies, such as the U.S. Defense Logistics Agency, or from defense contractors buying on their behalf.
The company also services international customers in markets that include Australia, Canada, China, France, Germany, India, Ireland, Israel, Italy, Malaysia, Mexico, the Philippines, Poland, Saudi Arabia, Singapore, South Korea, Turkey, and the United Kingdom.
Suppliers
The company sources its inventory from approximately 6,000 suppliers worldwide, including Amphenol; Arconic, Inc.; CAAP Company; Esterline; Henkel; Lisi Aerospace; PPG Industries; Precision Castparts Corp.; TriMas; and 3M. During the year ended September 30, 2019, Precision Castparts Corp. and Arconic, Inc. supplied 9% and 8%, respectively, of the products that the company purchased.
Regulation
The company is subject to government rules and regulations that include the U.S. Foreign Corrupt Practices Act, the UK Bribery Act 2010, the International Traffic in Arms Regulations, the Export Administration Regulations, economic sanctions, and the False Claims Act.
History
Wesco Aircraft Holdings, Inc. was founded in 1953.
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