Third Such Restructuring In 10 Years

Dassault Falcon has embarked on its third parts pricing overhaul in the past 10 years, assessing the cost of over 18,500 individual items. The company said in a news release from EBACE that spare parts service has always been a priority. Efforts long focused on ensuring the ready availability and timely shipment of parts, and the company now sets the industry benchmark in spares dispatch. Most of the focus has since shifted to pricing, with the aim of reducing or realigning the prices of some items that customers may still perceive to be too high.

In 2012, the process reduced the price of over 14,000 parts. "These moves have had a positive effect but they're still not enough to meet our exacting standards of customer satisfaction," said Jacques Chauvet, Senior Vice President of Customer Service for Dassault Falcon. "As much as we've reduced prices, the perception is still that in some instances they remain too high. Nearly everyone has an example of a part whose size, technology or material of construction suggests one level of price but the invoice turns out to be quite expensive, leaving the customer perplexed."

As a result, Dassault Falcon has decided to embark on a completely different approach for pricing, starting with the most commonly used parts. Dassault terms the new approach "Rightsized Pricing." "Up to now," remarked Guillaume Landrivon, Vice President of Worldwide Spares for Dassault Falcon, "company pricing methodologies have been linked to the cost of manufacturing or purchasing spare parts, without taking into account how much the customer perceives the parts to be worth."

Rightsized Pricing will put perceived value at the center of the equation. It will involve a review and realignment of pricing for a certain number of Dassault Falcon parts references to eliminate inconsistencies and make the process more transparent to customers. "The goal," said Landrivon, "is to align thousands of parts we provide to our customers with a price that meets their perception of value."

Aligning prices with perceptions is a process that was started in the automobile industry but will be new to the aircraft sector. It entails the detailed analysis of customer expectations using sophisticated software tools and processes that take into account key criteria of individual spare parts such as size, weight, complexity and function and other pertinent parameters.

Introducing Right Pricing will lead to numerous price readjustments and new pricing benchmarks that Dassault Falcon is convinced will give customers more perceived value for money and help them significantly reduce their operating costs.

While reducing parts prices has always been a key goal at Dassault, getting parts to the worldwide customer base as quickly as possible has had an even higher priority. The company has as many as 300,000 different parts to support current and legacy Falcon aircraft, which go back to the 1960s. Having the right parts in the right places to be able to satisfy AOG needs is a logistical challenge.

This process is facilitated by having key depots -- such as Teterboro, New Jersey, Paris-Le Bourget, France and Singapore -- adjacent to major transportation hubs. 10 other spare parts depots are spread around the world. Virtually all AOG parts are picked, packed and in the shippers hands in less than 60 minutes. Of course, the worldwide service network and its many satellites are also tapped for parts when they are closer to the customer.

Dassault is the market leader in spare parts availability and shipping timeliness and has maintained a 98% spares service level for all shipments for several years running. In the first half of 2013, Dassault further reinforced spares inventory in strategic regions such as China and India.

(Images provided by Dassault Falcon)

FMI: http://falcon2000s.com/