Taking the Fat Out of MRO; The MRO industry may lag in the adoption of Lean, but some leaders are applying the tools, techniques and best practices to improve their operations.
BY BOB TREBILCOCK
1 December 2008
Overhaul & Maintenance
48
ISSN: 2147-7483, Volume 14, Issue 12
English
(c) 2008 McGraw-Hill, Inc.
When planning began for a new 46,200-sq.-meter MRO facility at the Sabiha Gokcen International Airport in Istanbul, myTECHNIC's board of directors determined that Lean principles would guide the project.
'Lean is often applied retroactively to a facility as a method for change,' said Remzi Saltoglu, myTECHNIC's director of continuous improvement. 'But one of our investors had read an article about Lean initiatives, and we decided to infuse Lean into every aspect of the design and layout of the facility.'
Case in point: Visibility into operations is a central tenant of the Lean philosophy. Instead of locating maintenance offices next to the repair hangar, myTECHNIC incorporated its offices into the center block of the three-story repair facility. 'That center block is our control center,' said Saltoglu. 'It's right in the middle of the hangar and from there we have perfect visualization of the aircraft.'
By all accounts, the myTECHNIC facility is one of the few MRO centers designed from the ground up to be Lean. 'Relative to other industries, we're 15 years behind the times,' said Hal Chrisman, a principal at AeroStrategy. 'We saw military depots begin implementing Lean to control a steady escalation of operating costs back in 2000. But many companies are reluctant to make an investment in Lean.'
But as MROs look to control those escalating operating costs, reduce their inventory and cycle times, and bring predictability to an inherently unpredictable operating environment, more overhaul and maintenance operations are looking at Lean to change the way they do business.
That is especially true for MROs that must meet service level agreements in their maintenance contracts. 'We recently signed a 10-year contract with easyJet that requires us to get an engine back in service in 50 days or pay a penalty,' said Cristina Seda-Hoelle, a master black belt in global operations at GE Aviation. 'To meet those types of stipulations and provide a consistent output, we have to operate in a Lean environment.'
Still, to make certain that Lean is an effective tool and not just another business buzzword, it's important to remember that Lean isn't a process or technology. Rather, it is a philosophy aimed at optimizing processes across an enterprise, from the point of order to the point of delivery. What's more, the most successful operations understand that Lean, like a diet or exercise regime, is only effective when it's combined with a program for continuous improvement. Holding a few training sessions and changing processes once will not result in lasting improvements.
And while Lean was created by Toyota for the predictability of a manufacturing environment, the bottom line mission of Lean is the 'absolute elimination of waste' from overproduction, waiting, downtime, unnecessary product movement, excess inventory, unnecessary motion and defective products. The elimination of waste is a concept that can translate to any operating environment, even if Lean in a maintenance organization looks different from the assembly line. After all, manufacturers that have Leaned out their plants are now Leaning out the rest of their supply chain operations to reduce waste.
What are the benefits of Lean' Done right, Lean leads to a reduction in inventory, space and cycle time. 'Depending on the type of aircraft and check, we have seen 30-50% reductions in the amount of time an aircraft was out of service for maintenance,' said Brian Prentice, an associate partner with the consulting firm Oliver Wyman. 'You're increasing the capacity of the airline and allowing an MRO to process twice as many events in the same amount of time. It's a win-win for both.'
While the industry may be behind other verticals in the adoption of Lean, there are companies and facilities like myTECHNIC and GE Aviation that have delivered results. Here are seven of the best practices already being employed to improve the quality of overhaul and maintenance operations, from first steps to next steps.
A Clean, Well-Lighted Place
While no two companies approach Lean the same way, one characteristic common to all is that there is a place for everything and everything is in its place. 'The stereotypical view is that an MRO facility is a bit dingy, with grimy floors and parts lying around,' said Chrisman. 'You walk into a facility with a Lean culture and they're clean, orderly and well-lit. The benches are laid out with the appropriate tools in the right spots. Order is the key word.'
In fact, when Horizon Air introduced its Lean program in its Seattle maintenance operations, the first event following the introductory training sessions was a three-week-long, all-hands-on-deck clean up of the hangar. In part, the clean up sent a message to employees that things were about to change. The over-flowing dumpsters also demonstrated how many unused tools, parts and supplies had been squirreled away, wasting money. 'By the time we were done filling dumpsters, we had freed up about 10% of the space in the hangar,' says Jim Brownlee, director of maintenance operations.
More importantly, adds Gabe Stark, Horizon Air's Lean manager for maintenance, cleaning up set the stage for what came next. 'Getting organized was the building block for everything we did after that,' says Stark. 'It was visible to everyone, and they gained efficiency just by knowing where tools and parts were located.'
Mapping Out The Value Stream
After a clean up, the next step is to map out what you currently are doing, and then focus on steps that add value to the process while improving, minimizing or eliminating everything else.
For example, to optimize the handling of inbound freight, GE Aviation created a system to differentiate at the receiving dock between parts that are needed for an engine assembly now and those that won't be needed for a few weeks. Then, areas on the receiving floor were clearly designated for parts that were needed today, parts that were needed tomorrow, and so on.
'As we bring parts off the truck, we put them in the right spot on the floor based on priority so we touch the inventory once rather than multiple times,' said Clint Morley, business manager, global operations. 'And when our inspectors walk in, they know based on where things are stored what they should work on next.' That way, parts can move from the inspection area to a maintenance area.
Size Facility Based On Cycle Times
In a manufacturing facility, the assembly line creates value. Everything else, from storage to receiving to shipping, is a necessary evil that costs money. That's one of the reasons plants that have adopted Lean eliminate as much warehousing space as possible and optimize the size of their work cells to maximize the amount of revenue generated by the manufacturing space.
StandardAero, an early adopter of Lean, takes a similar approach to its MRO operations. 'When we are designing a repair facility, we design it to support specific cycle times and throughput,' said Dan Gonzales, VP business development, government and military sector. 'A facility supporting the T56 is designed for a 35-day cycle time. For other engines, we might design for a 20-day cycle time.'
Designing for speed, Gonzales adds, reduces the amount of work-in-process (WIP) and inventory on site, reducing the need for additional floor space.
To make that happen, StandardAero takes a cellular, or work cell, approach to its facilities: The idea is that rather than routing an engine or a piece of an engine through, the mechanic and engine are kept in one location. That means that all the processes from inspection through repair and assembly will take place in that location.
'Before we begin a job, our teams will spend a great deal of time upfront determining what it will take to repair an engine,' said Gonzales. 'Based on what the tech order tells us to do, we will bring together the parts and the machines required in that location.'
Flexibility is built into the process. Technicians with specialized skills that may be required in more than one location, like a lathe operator, can be moved between cells. Finally, by installing data collection systems in each cell, StandardAero can more easily track the progress of a repair. 'We can give the mechanics in a work cell real-time feedback on how they're doing,' said Gonzales. 'If they're not meeting time requirements, we can use that data to analyze what went wrong.'
Treat Your Operations Like A Surgeon
One way to make a repair or check Lean is to treat it like a medical procedure in an operating room, said Joann Michalik, an associate partner specializing in Lean operations at Oliver Wyman. 'Before an operation, everyone understands what needs to be done, a surgical kit is delivered to the operating room, and the surgeon lays out all the tools in the order they'll be needed for the procedure,' said Michalik.
'In MRO, we treat the mechanic like a surgeon, providing them with point of use kits, so that their time is spent on value-added processes and not looking for tools.'
To develop point of use kits, Michalik first brings operators together for a Kaizen event. The mechanics deconstruct a repair process, identifying the specific parts and tools required for each task. That information is then put to use before a maintenance check is performed. 'Early in the check, we identify which modules need to be worked on and what are the supplies and tools that will be needed to support the work,' said Michalik. 'We then put together the tools and the parts in a kit that is delivered to the mechanic when its time for that part of the process.'
Moreover, tools that are used in a variety of tasks, like jacks, ladders and grease guns are available and easy to identify in a work area. Finally, Oliver Wyman creates point of use general service carts for consumable materials that might otherwise be stored in a central storage area. 'In one facility, we found that mechanics were walking two to three miles a day to get the consumables they needed to do their jobs,' said Michalik.
'After we put in the carts, they were walking about a quarter mile. You don't want a mechanic to walk clear across a hangar just to get a screw driver kit or a new pair of gloves.'
Streamline Inventory
Automotive plants that implement Lean are often able to eliminate on-site storage areas by moving to a just-in-time operating model: A shift begins and ends with empty receiving docks; in between suppliers deliver parts and components in small quantities that will be consumed in just one or two hours. To make that possible, auto manufacturers share production plans so their suppliers can plan to have the right inventory available when it is needed.
While an MRO facility can't eliminate all just-in-case inventory, Lean MROs take a variety of approaches to reduce the amount of inventory on hand.
Vendor managed inventory, or VMI, is one approach myTECHNIC adopted in its engine overhaul operations. The MRO signed service level agreements with a few selected partners who manage inventory levels on site. myTECHNIC shares long-term projections about how many engines it plans to serve, how many checks it expects to perform, and when they are expected to be performed. 'We lay out our plans in increments of time, over both the long-term and short-term,' said Saltoglu. 'Their planners, buyers and logistics personnel get involved in our operations. This really is a joint collaboration.'
Just as StandardAero designs its facilities around cycle times, inventory levels are set to maintain a 90-95% first pass fill rate. The goal is to hold just enough inventory to fill a mechanic's first request for a part 90-95% of the time. StandardAero then designs its replenishment and logistics practices to deliver a back-ordered part in five days or less. 'That allows us to control our investment in inventory and still meet the cycle times that we've set for a facility,' said Gonzales.
Oliver Wyman reviews inventory and material usage levels over the previous few years. Clients not only analyze what they had on hand, but identify the parts they had to order and the parts that resulted in an aircraft on the ground. Inventory minimum/maximum levels are then prioritized based on the parts that have the biggest impact on operations. That allows them to reduce inventory levels on those parts that can be back-ordered without slowing down a job. The result: 'Before we implemented Lean, one facility we worked with only had 50% of the materials they needed in the hangar before a check,' said Michalik. 'After we implemented Lean, they had 85% of what they needed before a check, but they were carrying less inventory because they had the right parts at the right time.'
Continuous Improvement
Lean is not a once and done approach to overhaul and maintenance. A truly Lean culture is focused on continuous improvement: The best organizations improve their processes one step at a time, and then start the process over again, looking for ways to make things better. It's no coincidence that an organization like myTECHNIC has a manager dedicated to continuous improvement.
'Continuous improvement is at the forefront of everything we do,' said GE's Morley. This year, for instance, GE's Services Global Operations team kicked off a series of events known as Sensei Showdowns. As part of the program, site leaders are sent to facilities around the globe to share best practices they have learned in their operations with other managers and to look for ways to improve those facilities. To improve turnaround time on CFM56 engines at GE's facility in Strother, Kan., for instance, a Lean team focused on standard work in the disassembly process. The team divided the processes into two-hour standard work segments, and then looked for areas where each segment could be improved. The result, said Morley, has been a four-day reduction in turn around times 90% of the time.
Change The Culture
In the best Lean operations, the culture changes along with the processes.
Communication is a key to making that happen. Over the eight months following a major Lean initiative, for instance, Horizon Air held four meetings where Lean managers talked to every employee on every shift about the changes that had been made and the changes that could still be made to improve their jobs.
'One of the things we learned is that our mechanics were over-working some of the planes, performing tasks that weren't scheduled at that time, so they weren't later blamed if something went wrong,' said Brownlee. 'We were spending a lot of time doing the work and writing up all the non-routines associated with that work.'
To counter that, Horizon Air put in place a process with its planning, engineering and quality control managers to agree on and lock down the work that was going to performed during any given maintenance check. In addition, a process was put into place to do a root cause analysis of what went wrong'rather than point fingers'if a problem was discovered later.
Since then, Brownlee said, Horizon Air has seen a 50% reduction in dwell time in C checks without a reduction in quality. In fact, the reliability of the aircraft in the first 50 hours after a C check also has improved by 50%.
More importantly, said Brownlee, the 400 employees working in maintenance have bought into the idea and are looking at ways to do things better, faster and safer. 'Yes, our operational numbers have improved, but so has the morale of employees and supervisors,' said Brownlee. 'We have managers who are looking at their areas and coming up with ideas on how they can make a change. That's significant.'
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