Monday, March 24, 2014

Focus and Leverage Part 327

In posting Part 326 I laid the foundation of an actual case study of a Maintenance, Repair and Overhaul contractor to one of the Department of Defense (DoD) military installations.  The primary purpose of this DoD entity was to train future aviators, how to fly a variety of different helicopters.  In this posting we will “dig deeper” into how we were able to turn this contractor around in terms of on-time completions of flyable aircraft.  As I stated in my last posting, because of the sensitive nature of this business, I will code data in terms of actual cycle time and rather use percentage improvements.

The way this contractor makes money is to maintain a variety of rotary-wing aircraft to a fixed contract that calls for “x” amount of aircraft to be available to this military training school. And as I said in my last posting, this contractor was clearly underperforming.  They were also spending quite a bit of money on overtime in their attempt to complete the maintenance on these aircraft.  Because they were underperforming, they were forced to pay significant financial penalties which was rapidly eroding their profitability.  The first area I want to discuss is how this contractor was scheduling their aircraft through their scheduled maintenance process.

Since the contractor considered each new aircraft an individual project, they were using a hybrid version of a traditional project management software to schedule the sequence of how the aircraft should be maintained.  Because each aircraft must go through the scheduled maintenance process after using an allotted number of flying hours (e.g. 1,000 hours), this contractor was starting the aircraft immediately because they believed that by starting an aircraft sooner, they would finish it sooner.  So, in effect, this contractor was “pushing” aircraft into their scheduled maintenance process.  As a result, there was an excessive amount of aircraft waiting to enter the maintenance hangar. Remember, all of these aircraft waiting to enter the hangar were unflyable which reduced the pool of acceptable aircraft available for the student pilots.

There were other problems facing this contractor, not the least of which were part’s “stock-outs” needed to complete the scheduled maintenance on the aircraft.  In addition, as I mentioned earlier, this contractor was using excessive amounts of overtime and even sub-contracting aircraft outside in an attempt to increase the number of flyable aircraft.  In fact, this contractor’s on-time completion rate was right around 60 percent with no apparent way to improve it.  It was clear to everyone that there was a significant lack of synchronization of aircraft through this maintenance process.

As I said, this contractor treated each aircraft as an individual project and if you asked the If you asked the project managers why their project aircraft were late, the common response was to blame everything on things they had no control over.  That is, uncertainty or the Murphy bug was the culprit.  For example, if a part comes in late from one of the back shops, or there was absenteeism, then these could be the reasons why the aircraft was late.

When this contractor developed their project management plans for the aircraft to be maintained, numerous individual sequenced tasks were listed with individual task durations listed.  Each task time was estimated by the maintenance group and “safety times” were added to each one just in case the Murphy bug hit.  Most of the time, these safety times were 50 % of the total duration of the scheduled tasks.  So you have to ask yourself, why, with a 50% safety margin imbedded in each task, were the projects still coming in late 60% of the time?  I mean, with all of this safety added to each task, shouldn’t they be completed at a higher rate than 60%?  After an aircraft was completed, this contractor had “After Action Reviews” to discuss what worked well and what didn’t work well and in almost every case, things they had no control over was reported as the reason it was late.

The contractor measured progress on each project as the aircraft was being maintained by measuring the number of tasks completed against the total number of tasks to be completed and then calculated a percentage of tasks completed.  What they typically observed was that the first 90% of the project seemed to move along quite well, but the remaining 10% dragged on endlessly.  This is not uncommon when organizations use a project management known as the Critical Path Method (CPM) and this contractor was using their own version of this method.  Ninety percent of the project managers around the world are using the same method and if you ask a typical project man­ager about the factors that delayed a project, most will tell you that something they didn’t expect, or had no control over cropped up in some of the tasks and caused a delay. In other words, uncertainty or the Murphy bug bit them.  Every project from virtually every environment has uncertainty associated with it and how this uncertainty is dealt with determines the ultimate success or failure of the project. So in order for a project to be successful, there must be a way to protect it from uncertainty.

In my next posting we’ll look at how this MRO contractor discovered how to protect their projects from uncertainty and how they had begun to significantly reduce the time required to get aircraft through their scheduled maintenance process faster and more reliably.

Bob Sproull

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