MD invests heavily in customer support
MD Helicopters (booth 9554) is on track to deliver around 24 helicopters this year, which closely matches its 2021 performance. The estimate includes a memorandum of understanding the OEM recently signed with Texas dealer Trinity Aviation to take 15 helicopters over the next five years.
The Mesa, Arizona OEM has spent the better part of the past two years improving product support and quality, investing $24 million for a larger parts inventory, improving its forecasting capabilities, and apply the automotive industry’s Kaizen process, or continuous improvement.
These results have paid off, according to CEO Alan Carr, who joined MD in 2020. The overdue backlog has been reduced by 37% and fill rates have increased from 80% to 92%. “Customer satisfaction has increased,” Carr said. “Without good customer service, it’s hard to sell your next helicopter. People are talking. They want references. If people have AOGs, they won’t be a good reference. Taking care of our past takes care of our future when it comes to new sales.
Under Carr’s leadership, managers were empowered to be more entrepreneurial and a client ‘SWAT’ team was set up to improve coordination between the procurement team, operations and programs ‘to get to the source of the problem and figure out where customer service fell. ,” he said. Product upgrade programs for the MD902 twin and MD600 single were abandoned in favor of focusing on its MD500 series singles, which Carr calls “our bread and butter.”
“He almost has a cult following and loyalty to him,” Carr said of the 500 series. “You get in there and you know what it is—the Harley-Davidson of heaven.”
The Taliban takeover of Afghanistan ended MD’s large and lucrative “indefinite delivery, indefinite quantity” (IDIQ) U.S. military contract, but Carr said MD managed to get all its personnel out of the country safely before the American withdrawal. And MD has consistently delivered militarized helicopters through IDIQ to other countries, including Lebanon and Kenya, as well as additional foreign military sales outside of IDIQ to forces such as Malaysia, where it recently delivered six helicopters. In total, even after Afghanistan, military sales represent 50% of MD deliveries.
At the same time, MD is putting more energy into the civilian market where it has had recent sales to a variety of police, utility and private operators. It sells over $1.2 million worth of 530E to 530F model conversion packages and the company continues to make product enhancements to new production helicopters, including a “slimline” glass panel avionics package that offers better forward visibility. A new base 530E costs around $2.7 million.
MD’s workforce is over 250 and the company is hiring. “Society is very different from what it was two years ago,” Carr said.