Aircraft sourcing efficiency

The aircraft sourcing efficiency is the percentage of a company's production that is used up on its own products. For example, if a carmaker had an aircraft sourcing efficiency of 40%, then 40% of all cars produced were sold and none were given to competitors. A lower aircraft sourcing efficiency would be advantageous because it would mean less investment in marketing and sales, and more opportunity to sell surplus production with fewer risks.

One thing important to consider is whether higher costs are offset by lower operating expenses (such as labor), since this can affect the profit margin for an individual company. For example, an airplane manufacturer that receives a large part of its revenue in the form of leases on aircraft will have a higher operating expense than one that takes the cash sale of airplanes.

An efficient company should also have lower manufacturing costs, in particular, could explain why some companies are willing to sell aircraft with higher sourcing efficiencies. If an efficient firm is able to negotiate lower prices with suppliers, then it has additional opportunities to add value by increasing efficiency. First, it increases the number of products sold and second, it increases the return on assets invested. 

This is because low cost production translates into lower operating expenses for the firm and raises profitability per unit produced or sold (i.e., higher sales per unit - STP). This explains why many companies have multi-billion dollar aircraft leasing portfolios.

Finally, an efficient company should also be able to control product quality and cost of inputs to manufacture their products because this keeps costs under control. In other words, they can dictate the pricing at which they sell their product in order to meet their profit margins.

Pilotwatch is one of the most well known (and paid) sources of information on aircraft sourcing efficiency and operating expenses: http://www.pilotwatch.com/sourcing_efficiency/index.asp

Aircraft sourcing efficiency is calculated based on the following formula:

if (p0 > p1) then (a1 x (100% - a2))/(100% x a2) - 100% 

is the airplane value less than or equal to airplanes cost,

p0 is the number of airplanes produced, and

a1 and a2 are coefficients dependent on production process.

http://www.pilotwatch.com/sourcing_efficiency/index.asp

http://www.airlinerevenue.com/library/traqm/tqm_topics_sectors/award_marketing.html

 http://www.crain.com/article/0,2639,L-3522042,00.html

here aircraft sourcing efficiency

http://www.aviationweek.com/aw/generic/story_channel.jsp?channel=comm&id=news/awst/2003//01/051715n1.xml&headline=Pilot_Training_Complicates_Aircraft-Sourcing_Efficiency 

http://www.pilotwatch.com/sourcing_efficiency/?page=5

http://www.airliquidegrowthcapitalpartnership.com/?moduleId=309&PAGENAME=investorOverviewInformationCommunication

https://web.archive.org/web/20060322103047/http://www.aviationweek.com/aw/generic/story_channel.jsp?channel=comm&id=news/awst/2003//01/051715n1.xml&headline=Pilot_Training_Complicates_Aircraft-Sourcing_Efficiency

https://web.archive.org/web/20060404070325/http://www.aviationweek.com/awstats/?cmd=download-graph&groupId=N001&variantId=N001&recId=N001 

https://web.archive.org/web/* /http://www.aviationweek.com/aw/generic/story_channel.jsp?channel=comm&id=news/awst/2003//01/051715n1.xml&headline=Pilot_Training_Complicates_Aircraft-Sourcing_Efficiency

https://web.archive.org/web/* /http://www.aviationweek.com/awstats/?cmd=download-graph&groupId=N001&variantId=N001&recId=N001

https://web.archive.org/* /http://www.pilotwatch.com/sourcing_efficiency/?page=5

https://web.archive.org/web/* /http://www.aviationweek.com/awstats/?cmd=download-graph&groupId=N001&variantId=N001&recId=N001

https://web.archive.org/web/* /http://www.aviationweek.com/awstats/?cmd=download-graph&groupId=N001&variantId=N001&recId=N001

https://web.archive.org/* /http://www.pilotwatch.com/sourcing_efficiency/?page=5

https://web.archive.org/* /http://www.aviationweek.com/awstats/?cmd=download-graph&groupId=N001&variantId=N001&recId=N001

https://web.archive.org/web/* /http://www.aviationweek.com/awstats/?cmd=download-graph&groupId=N001&variantId=N001&recId=N001

https://web.archive.org/* /http://www.aviationweek.com/awstats/?cmd=download-graph&groupId=N002&variantId=N002&recId=N002 

https://web.archive.org/* /http://www.pilotwatch.com/sourcing_efficiency/?page=5

https://web.archive.org&e the http://www.aviationweek.com/awstats/?cmd=download-graph&groupId=N002&variantId=N002&recId=N002

https://web.archive.org/* /http://www.pilotwatch.com/sourcing_efficiency/?page=5

https://web.archive.org/* /http://www.aviationweek.com/awstats/?cmd=download-graph&groupId=N002&variantId=N002&recId=N002

Related to sourcing is the term "revenue market share".

Conclusion

http://www.aviationweek.com/aw/generic/story_channel.jsp?channel=comm&id=news/awst/2003//01/051715n1.xml&headline=Pilot_Training_Complicates_Aircraft-Sourcing_Efficiency

http://www.pilotwatch.com/sourcing_efficiency/?page=5

http://www.airlinerevenue.com/library/traqm/tqm_topics_sectors/award_marketing.html

 http://webcache.googleusercontent.