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Time-Based Manufacturing

 

PART III. 

 

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 was required.

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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