Lufthansa Technik Services India: Modernizing material-returns management to keep customers airborne
Taking off with a new material-returns management solution
In providing aviation maintenance, repair, and overhaul (MRO) services, Lufthansa Technik Services India Pvt. Ltd. (LTSI) wanted to optimize its material-returns management process to support airline operations. LTSI and the Customer Innovation Services organization at SAP codeveloped an integrated solution based on a clean core strategy using SAP Business Technology Platform.
| Industry | Region | Company Size |
| Travel and transportation | Bangalore, India | 300 employees |
reduction in material-returns reconciliation cycle time expected.
improvement in data accuracy in recovering unreturned parts projected.
decrease in manual effort in returned-parts tracking and follow-ups anticipated.
Chief Executive Officer, Lufthansa Technik Services India Pvt. Ltd.
Streamlining material returns to support operational continuity for airlines
Lufthansa Technik Services India Pvt. Ltd. (LTSI) is the strategic arm of Lufthansa Technik AG, specializing in aviation MRO. LTSI provides comprehensive support services for components, including component provisioning, logistics, repair-cycle management, and material reconciliation. As a trusted MRO partner, it supports regional and global carriers by ensuring high service reliability, reduced aircraft downtime, and strict regulatory compliance. Its services are central to maintaining operational continuity for airline customers, positioning LTSI as a key enabler in the aviation value chain.
LTSI uses a material-returns reconciliation and balancing (MRRB) process to manage the lifecycle of aircraft parts that are replaced during maintenance events. In response to maintenance requests, it ships replacement components to customers, who are contractually obligated to return the original, or “core,” components within a specific time frame. LTSI inspects and verifies the parts once received, recording the returns in SAP software and matching them against the original outbound transaction. The company also tracks overdue returns and, where necessary, applies penalties based on agreed terms. And it captures all this activity in a monthly reconciliation report that forms the basis for financial settlement and compliance tracking.
Despite being a well-defined process, the MRRB setup was heavily manual, depending on Microsoft Excel–based spreadsheets, Microsoft Access databases, and e-mail threads to track shipments, returns, and penalties. As a result, reconciliation cycles could take anywhere from six to eight weeks. This created delays in financial closing, billing, and inventory recovery. With no real-time visibility into a return status, there were often customer disputes due to inconsistent reporting and outdated data. The significant number of return components meant LTSI was losing revenue from missed penalties and untracked returns. Addressing these issues was critical to improving efficiency, protecting revenue, maintaining customer trust, and helping ensure financial accountability.
Chief Executive Officer, Lufthansa Technik Services India Pvt. Ltd.
Remodeling the material-returns process using a clean core approach
LTSI partnered with the Customer Innovation Services organization at SAP to codevelop a modern, integrated solution for material-returns reconciliation and balancing. The approach focused on clean core principles and incremental modernization of the process. First, business logic was decoupled from the SAP ERP application, LTSI’s ERP software system. This allowed its legacy systems to be upgraded without disrupting core functionality. New modular applications were then built on SAP Business Technology Platform (SAP BTP), replacing fragmented tools with scalable, maintainable applications.
LTSI developed SAP Fiori apps to meet its user interface needs without altering its ERP back end. The apps provide a clean, flexible user interface that connects directly to the company’s business data—without customizations to the ERP system. This strategy allows the solution to scale efficiently and evolve alongside future SAP software updates.
As shown in the figure below, the redesigned MRRB solution was built using the ABAP RESTful application programming model on SAP BTP. Data is replicated from SAP ERP using the SAP Event Mesh capability and OData provisioning capabilities, helping ensure real-time integration. Business rules govern automatic approvals of return cases while allowing manual intervention where necessary. SAP Fiori apps give LTSI’s employees access to a modern interface, allowing them to track return statuses, trigger reconciliation workflows, and resolve exceptions directly. Approval outcomes are written back to SAP ERP, helping ensure consistency between LTSI’s systems.
Customer Innovation Services delivered the robust extension for the MRRB solution, providing expertise in design, development, testing, integration, user acceptance, cutover, and support after the go-live event.
Chief Executive Officer, Lufthansa Technik Services India Pvt. Ltd.
Making material-returns management more reliable and transparent
Both LTSI and its customers are benefiting from faster, more-transparent, and more-reliable material-returns management as a result of transforming its MRRB solution. There are measurable improvements, for example, the company expects its returns reconciliation cycle time to be reduced by more than 80% and accuracy in recovering unreturned parts to improve by more than 90%. It anticipates a decrease of more than 70% in manual effort for tracking and following up on returned parts.
The MRRB solution represents a major step forward in digitalizing a traditionally manual and error-prone MRO process. For LTSI, it has improved operational efficiency, strengthened contract compliance, and reduced revenue leakage. For customers, the solution has delivered greater transparency, faster reconciliation, and a better overall service experience. As such, LTSI estimates that customer disputes have dropped by roughly 60%. And it forecasts that compliance with service-level agreements for returns could improve by more than 80%, leading to more-predictable service delivery.
Chief Executive Officer, Lufthansa Technik Services India Pvt. Ltd.