Known for thinking differently and finding out-of-the-box solutions to meet customers’ supply chain needs, Farsound truly believes that no one shoe fits all, and hence they tailor their solutions to fit customer needs. This month, we have selected Farsound as our MRO of the month, a cut above the rest when it comes to supply chain needs. We had the chance to speak to Lee Kelsey, Group Sales Director at Farsound a few days back and got to know the making of Farsound, its history, and what separates it from the crowd.
The name
The name Farsound is rather unique, just like the solutions they provide. “We believe that the name is unique, different, and stands out within the market,” says Lee with a smile, when asked about the name. “Over the years we have looked at changing the name but realized that it was well established and thought of, within the aerospace community,” he further adds. In 2020, the name tag Aviation was dropped from the name as a rebranding effort and now the company stands as Farsound.
The History
Farsound Engineering was founded as a manufacturer of small machined and fabricated aerospace parts in 1986. Looking back into the past, Lee says, “The journey has been like a rollercoaster to some degree. The founder of the business sadly passed away, which was a very hard time for the business but his wife and family members picked up the reins and pushed forward.”
At around this time, Farsound Engineering distributed the items that were manufactured, thus adding a new dimension to the business. Due to this Farsound Engineering won a major contract with HAESL or Hong Kong Aero Engine Ltd after which the winds of change started blowing in the direction of success.
In 2012 the company was sold to a venture capitalist, Rubicon Partners. They quickly realized that the business could be split into two companies, one doing machining, which is now called Xcel Engineering and the other being Farsound Aviation. During the 7 years under Rubicon, Farsound Aviation quickly expanded, due to fresh investment, in people and stock. “This allowed us to move to a new facility and win more new business. In 2015/16 we deployed a new strategy, where we would only focus on Engine MRO business and hone our focus on becoming the best in the business,” Lee further adds.
The Growth story
In 2018 Farsound acquired Sterling Aircraft, a small family-owned business in Canada. With this acquisition, Farsound expanded its footprint in North America and in turn the entire US market. This gave birth to Farsound Inc. In July 2019, a private equity company called AIGC took over Farsound Inc. However, they saw the potential and direction in the Farsound work and team. Just when AIGC’s funding started pouring in, COVID -19 pandemic hit the aviation industry thick and hard.
The next six months were a struggle for Farsound. “We opened our communication channels with new MROs for Adhoc business,” says Lee “We signed numerous contracts with MROs from the UK and the US spreading our roots in the global market,” he further added.
In 2020, when the COVID19 pandemic was at its peak, Farsound was barely able to touch the profit lines slightly above 2019. Then with the dawn of 2021, Farsound grew in customer base and overall revenue. “Just last year, we dropped the suffixes – Aviation and Inc from our name – Now we are just called Farsound,” Lee concludes.
Farsound – The missing part of the jigsaw
The market competition is stiff and to survive the competition, you need to be unique, and different, Farsound not only understands this strategy, but they implement it while dealing with their clients. When asked what sets Farsound apart from its competitors, lee says, “We listen and we don’t try to fit a square peg in and round hole. We are not there to try and sell you an idea or product that you don’t want. Farsound wants to work with you, be a partner, be that missing part of your jigsaw. As per our new branding, we bring that human touch and are always contactable at any time.” Explaining how Farsound has handled difficult clients and has always exceeded expectations Lee particularly recalls one customer from Spain that was reusing parts and wanted us to look at a way in which we could handle all the Adhoc parts, reused parts, and then supply them back. They were not being difficult, just wanted a tailored solution, which we knew we could provide.
“We decided that we would supply kits that were 100% mandatory replaced and non 100% kits, where there would be a mixture of reused and new parts for that specific engine number. This is extremely complicated, and we needed to open a facility near the customer that could receive the parts that were potentially going to be reused. We would have to check and inspect the parts, receive all the new material, and then build many different kit models. Not only have we succeeded in this, but we have beaten the TAT (turnaround time) that was targeted to us by the customer.”
Lee recalls another incident where the fitter had dropped or damaged a part needed to complete an engine. Farsound came up with instant solutions like vending machines on the engine build, quick TATs from site locations, etc, as Farsound holds consignment stock on-site and are now expanding into kitting/consignment.
“We are now working on an eCommerce system for all customers, where it will beana interface showing all stock that is allocated for them, a place to drop and scan their orders, with immediate acknowledgment of the order and showing picking/despatch movements, “ says Lee “The interface will still have that human touch because when the customer logs in, we will be notified and a chat box will be available,” Lee further adds.
Customer feedback
Farsound’s outstanding work with some of the leading MROs in the industry speaks for itself. Below are a few of the comments from Farsound’s clients
“Farsound never said ’no’ or asked ‘why do you need this? They simply did their very best to support our requirements. The relationship with Farsound works so well, that we don’t give it much thought. It’s a bit of a no-brainer, really,” – HAESL.
“Farsound’s price, quality, delivery, and customer service are all excellent and is a good partner for our engine MRO business and I strongly recommend you to have business with them,” MTU ZHUHAI.
Effective inventory management
In Inventory management, the sole issue is that of uncertain demand for around 80% of aircraft spare parts, where planners can’t predict what part will need to be replaced, where, or when, in such cases, the easy way out is to hold surplus stock, but that is not good for business besides it ties up a lot of cash. Farsound has a different way of dealing with the inventory problem, …goes on to explain with an example. “Back when we won our first major MRO customer HAESL, we needed to think differently as we won a portfolio of around 4,000-part numbers. We faced money constraints as Farsound is a family-owned business,” Lee further explains, “Due to the lack of space at HAESL, we had to forecast/predict what was going to be used in an ever-changing environment. We designed our own EDI/Consumption report, looking at trends over the last 18/12 and 6 months. Spikes in demands and where these parts were used. Tweaking the forecast going forward based on engine induction and knowledge that we gather from the market.”
Going ahead, as the business grew, Farsound continued to use the same strategy but with upgrades and improvements. “As the customers grew, we can see different usages patterns and lay this over each other to see where items might increase/decrease. We have a great rapport with our manufacturers and suppliers, giving us a better understanding of the supply chain, lead-time, and material shortages. We have increased our knowledge, by employing new people from within the industry but we are also really focusing on new tech solutions. Every day we keep adding to the huge jigsaw puzzle, understanding how we can better support our customers/partners,” he further adds.
Dealing with the pandemic
With a far-away look in his eyes, Lee recalls,” the pandemic was tough. We knew there would be a bounce back, but this time things were uncertain. First of all, we streamlined our purchase orders, but at no time did we cancel them, just moved them out but still committed to the supply chain that we were all in this together and will come out better together. We moved stock around to support customers’ needs in different parts of the world, utilizing the stock that we had. We have always run a tight ship and due to our systems of forecasting/predicting usages, we were not holding massive amounts of stock that were tying up cash at such an important time of business.”
“Once we got a sense that things were changing and the pandemic was moving to a different stage and people might be allowed to travel again, we decided to increase all our lead times and commit to new orders. This would put us first in the queue for production, giving us an advantage and ensuring that we can sustain the outstanding performance for our customers. Everyone can see that the market is bouncing back strong, but lead times have increased and with the war in Ukraine things have gotten worse within the supply industry. We have stayed in front of this curve and we intend to do so going forward,” he says sounding more positive and confident than ever.
Speaking about the looming challenges that are about to hit the aerospace logistics sector, Lee comments on the Shortage of parts, especially on legacy engines. “This is either because of material issues or due to the pandemic, some manufacturers have gone bust or diversified their business. Unfortunately, there is no quick fix to avoid this problem.”
Sustainability & Farsound
When we bought forward the topic of sustainability, his face lit up with a big smile, Farsound is at the forefront with regards to sustainability and reducing carbon emissions. He says, “We have undertaken various projects and made changes in the working policies as we move towards a sustainable future”.
Some of the policies adopted by Farsound are –
- Move to paperless processes.
- Monitoring of use of energy and processes that impact sustainability.
- Ability to work from anywhere in the world inside or outside of company premises.
- Reuse of inbound cardboard boxes as packing filler for the outbound product.
- Biodegradable packaging including AEO compliant packaging tapes.
- Move to electric/hybrid company vehicles.
- Installation of electric car charge points.
- Auto-shutdown of energy-consuming systems when not in use.
- Waste segregation and recycling.
Green systems are a prime consideration for the Management Team as the company moves to new premises. Year on year business improvement targets is driven by every employee in the business because for Farsound the journey to protect the environment for future generations has started but will never end.
Farsound has global facilities in the UK, North America, Spain, Singapore, and Japan, when asked about the expansion plan going ahead, Lee humbly says,” As of now we don’t plan to open a new facility, maybe in future we might consider opening a facility in the US. Also, we are moving to a new facility in the UK in early 2023 and a bigger premises in Spain,” he concludes.
