Our case study involves the repair and
overhaul, or remanufac-ture, of JT8 jet engines. The organization
involved, a major international airline, repairs and overhauls
these engines within its own maintenance facility to support its
sizeable 737 fleet.
The overhaul process includes the following
main steps: engine disassembly into modules; module disassembly
into individual parts and components; parts cleaning and
inspection; parts repair as required; module assembly; engine
assembly; and final test.
The Events that Led to War Being Declared
Prior to carrying out this major TBM project,
the overhaul of a JT8 engine required over 90 days to complete.
Engines were overhauled at the rate of about one per week; thus
work-in-process inventory was about 12 engines (about $15 million
worth!). At the same time, high levels of spare parts inventory
existed, and the Engine Shop was plugged with work.
As with virtually every other airline during
the late 1980s, this organization was faced with extreme pressure
to reduce operating costs. The company recognized that a
major opportunity existed to reduce engine and spare part
inventory investment; to improve productivity and thereby reduce
operating expense; and to potentially take on third-party engine
overhaul work as a means of generating additional revenue; by
significantly reducing the time required to overhaul and repair
JT8 engines. The company also knew that other leading airlines
around the world were either working on similar lead time
reduction efforts or had already achieved significant improvements
as a result of focusing on speed.
Thus, the enemy was clearly identified as being
engine overhaul lead time. The airline realized that its
ability to reduce costs and improve productivity relating to JT8
overhaul was linked directly to its ability to be competitive, on
a world scale, in the time required to overhaul engines.
Preparing for War—Setting Strategy and Battle Plans
With the enemy clearly identified and the need
for lead time improvement well understood, senior management set
out a number of specific battle objectives, including:
• Slash overhaul lead times
• Reduce engine inventory investment
• Free up capacity to take on third party work
• Reduce overhaul cost per engine
• Provide better engine availability
With these objectives set, the focus shifted to
determining how the improvements were to be achieved. Based on
some preliminary investigation of how other organizations,
including airlines, were achieving lead time improvements, it was
found that an operating approach called Just-in-Time (JIT) was
at the heart of these improvement efforts. Thus, the senior
management team set out to learn about JIT, and to determine how
JIT techniques might be implemented within their own organization.
Stepping Up Battle Preparations— Weapons Testing
Based on initial indications that the JIT
process made sense for their operation, senior management decided
to carry out a pilot JIT project in the DC-10 Brake Repair Shop as
a means of testing the applicability of JIT and to create an
example of success. Like many other organizations, this airline
had its share of past improvement projects that had promised more
than they delivered; thus there was a healthy degree of
scepticism towards new ideas that needed to be properly dealt with
prior to significant implementation efforts taking place.
The DC-10 Brake Shop project resulted in lead
time and inventory investment improvements in the range of 30% to
40% after the first wave of improvement implementations, with
further improvement determined to be achievable. These gains were
made largely by the Brake Shop employees (some consulting and
engineering support was provided) based on detailed analysis of
the existing process workflows and the adoption of several JIT
techniques, including cellular layout and the elimination of
non-value adding activity. As well, minimal capital expenditure
This initial learning phase was a key step in
the organization getting properly prepared to take on a major
improvement project. It helped senior management and others to
better understand what they were about to get involved with; and
it helped greatly to demonstrate to all employees both the JIT
philosophy and approach, as well as a considerable degree of real
life success within this airline's own operations.
To be Continued
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