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Six Sigma in the Airline Industry?

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Viewing 18 posts - 1 through 18 (of 18 total)
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  • #28917

    Fernie
    Participant

    Hello All,
    Does anyone know if any / what Airlines have implemented Six Sigma programs ???
    Thanks and have a great week,

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    #72794

    Mike Carnell
    Participant

    Fernie,
    I am not sure how much you fly but if anyone other than Southwest or Sing Air is doing it – it is not working. They just got a great excuse as well, anything that makes you angry – they tell you the FAA tells them they have to do it. It is only getting worse.

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    #72850

    Ø6 Sigma BB Coordinator
    Participant

    Thai Airways International (public) Co. Ltd. have implemented Six Sigma in their technical department (aircraft repair shop/hangar). I am not sure if now they expand to other area.
    Six Sigma Black Belt Coordinator

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    #72885

    Ashman
    Member

    Certainly several (British Airways, Delta, Southwest, Singapore Airlines plus many more) of GE Aircraft Engine’s customers have had staff take six sigma training as well as have GE Black belts based at their facilities, as part of GE’s Six SIgma – at the customer, for the customer initiative

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    #72942

    Satish Yadav
    Member

    To quote Jack Welch, CEO, General Electric,
    “If you think about airlines, they run two operations. They get you from point A to point B at from 7 to 8 Sigma. Your bags get there at 3 Sigma.”
    It sounds reasonable, considering the safety record of the airline industry.

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    #72947

    john beaudoin
    Participant

    No current Airline is using 6-Sigma for Customer/Passenger Satisfaction.  Airlines mentioned by other respondents are using it only in conjuction with suppliers on parts and maintenance repairs.
    The airlines are, however, the poster child for why 6-Sigma is important to a company.  Many customer delays, lost baggage, etc. examples were used in my 6-Sigma training class 2 years ago.
    Several times, Southwest airlines has been mentioned as one of the more satisfying airlines in terms of on-time, efficiency, and profitability.  They, I believe, as I studied them in obtaining a BS in Aeronautical Engineering with an Air Transportation Major, have been successful because they have forgone the use of hub and spoke distribution of passengers and have concentrated on point to point routes.  They have a highly motivated workforce that share in the company’s profits. They gain efficiencies in not having assigned seats (This encourages everyone to show up early to get boarded).  They only have one type of Aircraft, the Boeing 737.  This makes training of maintenence staff simple, decreases spare part inventories because you don’t have to have the minimum parts to keep on hand for several different aircraft.  Last, they don’t have 1st class seating, and can maximize the paying customers on an aircraft.  Their success was the reason congress deregulated the airlines, as before Southwest grew successful in Texas flying point to point between Dallas, Houston, and San Antonio (Intrastate Airlines fell out of regulations), it was assumed that regulation was necessary to keep airlines profitable.
    Southwest was able to accomplish their success on sound business practices, innovation by their creative founder, hiring and maintaining a motivated, friendly staff with a sense of humor and a stake in the company.  They also employed “Lean Thinking” to thier processes.  A lot of the flexibility Southwest has also comes from being non-Union, with some specialized exceptions.
    Delta Airlines is the only other airline that has a large pool of non-Union employees to my knowlege.  While Unions are good for employees in some cases, they can make it more difficult for management to communicate directly with employees and can make it difficult to implement changes quickly without an additional level of approvals required.
    Does anyone have experience working with Unions and 6-Sigma?  If so, does it provide any unique challanges that are not faced in a non-Union environment?
     

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    #72952

    Fernie
    Participant

    John,
    It’s nice to read comments of people who really knows about the industry.
    My original question was directed towards the transactional processes that take place behind the scenes, after the passenger has been flown from point A to point B. I’m sure you are familiar with processes such as reconciliation, leg fare calculations, lift processing, code share processing, agency sales reconciliation, revenue recognition, etc.
    These processes are extremely manual in nature, even in today’s “High-Tech ” environment.
    I really think a lot of the big airlines would benefit from implementing SS in their back office operations, don’t you think so ??
    Thanks for your reply,

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    #72957

    john beaudoin
    Participant

    I currently have a Transactional Greenbelt, and have a Project Engineer job title.  There are many areas of data gathering that are performed to meed FAA requirements in addition to gather financial data to aid in the operations of the airline.  Wouldn’t it be good to know that you have an underperforming route ASAP, for example.  You have to approach these issues in a structured way.
    First:  Learn why the data is being gathered, Identify necessary data for goverment regulations, numbers used by the company, etc.
    2nd:  Flow chart the processes for gathering the data.  Note what is manual and what is automated.  Be detailed and show every process, every decision made by an individual – especially where some exception may be encountered, etc.  Realize that exceptions may reduce the efficiency of the process, and then look for ways to remove the variability of the exceptions.
    3rd:  When you know your process, you should be able to know what the process costs in terms of labor, materials, etc.  If you have errors being made during the process, and you have corrections and rework, you can use this informaiton to show a sigma level, you can use Cause and Effect, FMEA, and Pareto Diagrams to break down the reasons for the errors, which ones occur most often, and which ones can have catastophic results.
    4th:  Implement a cost effective solution to reduce errors and improve the process.  You may need an ROI here to show that new equipment, etc. will eventually pay for itself.  You will need to flow chart your new process, identify that some errors may still take place, calculate your new COPQ and thus get your COPQ Savings for the project.
    Last:  Track your savings for at least a year and create a control chart to insure that your fix is not a temporary one.
    Since Customer’s Do not experience this behind the scenes stuff, there is no value-add directly experienced by the customer, unless efficiencies here will translate into lower air-fare.  I expect that with the airline industry, some of there largest expenses are Jet Fuel, Leasing/Maintenence/Purchasing Aircraft and support equipment, space to operate and slot fees, and then labor.  An Airline should target the needs of the customer.  In this case, the primary focus of the customer, for a business traveler, for example, is not so much the cost of the airfare, but: 1) Safety and Reputable Name, 2) On-Time Perfomance 3) Comfort in the Air and Prompt Service, 4) Quick and Easy Check-in and Baggage Handling, and 5) not so much price, but value for the price.
    Projects that go into effect that will help an airline meet these targets will be much more valuable than any behind the scenes efforst to decrease the costs of operations.  Projects that increase revenue will most always be much more valuable than projects that hold revenue constant by decrease costs.

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    #72973

    Spoon26
    Member

    Interesting insight on Southwest.  I’ve always loved them but been surprised that their business model works.  More power to them.
    Regarding unions and Six Sigma, it’s bad news like any change is with unions.  Since SS is all about improvement, and they are all about job security for those who have mentally given up, there’s a culture clash.  They sometimes seem supportive because they want people to get free training (i.e. GB training) and “qualifications” (i.e. GB certification), in order to then demand higher pay for the same work.  But their true colors show when you tell them that (a) they’ll have to make some sacrifices and (God forbid) maybe even extra hours or non-paid time for training, (b) there will be MEASUREMENTS on them and their peers, (c) there will be REQUIREMENTS for them to complete to get certified, and (d) you don’t get to be the top Six Sigma person just for being there the longest, unlike their regular job.
    At my last job we had 2 identical plants – one union and one not (different states).  Our non-union plant was 50% cheaper at making the same product, largely due to our Six Sigma program including a basic SS “yellow belt” program for our shop floor associates (which they used to better themselves .. true American work ethic).  Our union plant dragged down the overall business so bad that they put us up for sale. 
    Not that I’m bitter …

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    #73028

    amin khan
    Participant

    We started this program in Malaysia Airlines in August 2000.  We officially launched it as a company wide initaitive in July last year. Even though it is still at an infant stage, we have seen success stories in terms of acceptance and financial results. Should you need more info, please let me know. Rgds.

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    #73030

    Mike Carnell
    Participant

    Satish,
    Let’s think about Jack Welch’s comment. The 7-8 sigma is relative to crashing airplanes. The airline is 7-8 sigma only if you have a single CTQ of not dieing on the airplane.
    If I have a “no crash” sigma level of 7-8 sigma then the RTY for the airplane had better be 7-8 sigma which means the yield at every operation must be what? (just a hint – it is bigger than 8).
    If you can’t produce at that level then the only way you deliver an air plane at the 7-8 sigma level is through extensive inspection and test. Is test and inspection value add or non value add? There is a huge amout of opportunity in the airline industry.
    Theis assumes the only success factor is not crashing. The poor luggage service is only one aspect. In the busiest period we had (wjile supporting GE Aircraft Engines – which by the way is a benchmark for SS launch execution) I was on 6-9 flight per week. I have about 1.2 million Frequent Flier miles and have had my luggage lost  5 times since 1995. Three of the 5 times was on ASA from Atlanta to Wilmington. I will assume common cause.
    The real issue is airline quality since they really don’t kill that many of us is service. You can use RTY calculation to determine your probability of ontime arrival. The travel agents can give the OTD info right off their computer. It sucks. Then the games they play with the data. Does just pushing back from the gate and sitting in a deice station for 2 hrs on OTD. No but they really only want to quote their metrics not the success metrics of the customer.
    If you want to do customer satisfaction – how about American and Delta jamming seats togrther so they can get a few extra seats on planes that rarely ran at capacity befor 9/11.
    The airline industry is NOT even close to having a vague idea of what six sigma means to anyone.

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    #73083

    john beaudoin
    Participant

    Your company has started something, that if you are able to be successful, will completely revolutionize the airline industry.
    Good Luck!

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    #73565

    Lada
    Participant

    Hello Amin,I meant to reply but posted a new message. So this one is just to repeat another post.I belong to the working group researching 6 sigma implementations in transportation industry (we are ship owners). Would you mind to email me directly, I have some questions. If anybody else has anything to share about 6 sigma implementations (full scope, scaled, etc.) by transportation companies, service providers, that would be great! Cheers

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    #73568

    Mike Carnell
    Participant

    This probably a good week to talk about Six Sigma in the airline industry. This being the week when most airlines have canceled commissions for travel agents when they book the tickets. Travel agents are very important to a lot of business travelers. The business travelers are probably the largest single group of clients the airlines have. So do they drop the price of tickets. No. So why drop the price? To fund inefficent operations? Probably. To fund the new security arrangements. No there are fees already added to cover the cost of the Federal Agency which is funded by tax dollars.
    Talk about disconnected from customers. They drop commissions. Tickets stay the same . Travel agents now charge to book flights. Why? Trying to get you to book on line. Doesn’t work for most of us. If you are laying out a nice leisurly vacation maybe. If you are driving to the airport, going home and get called to go somewhere else – I’m going to stop and log on so the airline is happier. Probably not.
    The cavalier attitude by the airline industry is amazing.
    If you believe Malaysian Air is getting there – try again. Buy a ticket in KL with a return from Penang and try to change the date you return. You just end up buying another ticket.

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    #73579

    Terry
    Member

    Judging by my prior experiences, I would say that none of the major airlines have applied it in their baggage handling processes.  Of the last 11 times I’ve been forced to check baggage (I had too much Six Sigma stuff piled in it), it wasn’t at the other end 6 times – Pretty disgusting DPMOs.  I’m hoping the odds improve …
    Terry

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    #76123

    Terry S. Lauck
    Member

    A correction on the previous post… Southwest Airlines is actually one of the more heavily unionized airlines.  Much of their success can be attributed to the KISS principle (a very flat organization where having fun is a priority).

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    #76124

    john beaudoin
    Participant

    Thanks for the info.  Most airlines have unionized pilots, flight attendants, and mechanics, however Delta Airlines for example does not have unionized ground crew, ticket counter employees, etc.  I thought Southwest was the same, especially when I heard their employees volunteered to work with no pay after the Sept. 11th attacks, when passenger volume dropped to all time low levels.  I assumed no union employee would be able to do such a thing.

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    #133390

    Chaturvedi
    Participant

    Hello,
    Could you please give me more information on what areas within the airline have started using six sigma. I am planning to do a thesis on six sigma applications in the airline industry, but I could not find any related articles on that. I’m totally lost and don’t know where to start.
    Thanks,
    [email protected]

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