Is your flight department creating value? Is it an easy target for cost cutting?
What can you do about it? Vince Restivo, who provides metrics consulting for Mente Group, lays out what the modern flight department can do to keep operating, and to keep operating safely, in today’s economic environment.
In aviation, measurement matters. It matters more than in most industries. We are taught to have a critical eye, because to ignore the details can be the difference between providing a valuable service or being a liability greater than any other.
By Vince Restivo, Vice President of Program Management
Your assigned altitude is 15,000 feet, but you are at 14,300 feet. Does this matter? Your mission requires 18,000 lbs. of fuel (including reserves), but you only uploaded 16,800 lbs. Is this important?
The maintenance manual says to torque the wheel lugs to 140 ft./lbs., but your torque wrench is out of calibration, so you really only get the lugs to 118 ft./lbs. Close enough?
Measurement matters in the cockpit and the maintenance hangar. Yet, for many, the door from the hangar to the office is where the importance of measurement stops. What about in the back office? Are you as disciplined in managing your flight department as you are in flying the jet and performing maintenance? Are you willing to bet your success as a business unit on “seat of the pants” knowledge of your organization?
The corporate leader you work for may think the flight department is a high-tech cost center. He is looking for a partner to help navigate the growing pressure to hold costs and yet provide an ever-improving level of service to his (and your) internal clients. He may or may not be authorized to use the corporate aircraft and, therefore, can’t readily relate to the benefits of travel in the company jet. He knows aviation is expensive but is unfamiliar with the day-to-day operations and what it really takes to keep the operation running smoothly.
From your perspective, your job is to get your passengers to their destination and return them home safely in support of their busy schedule. While you are certainly aware of the cost to keep the operation going at the pace your passengers require, you don’t often look into the nooks and crannies of the operation for opportunities to learn more about every aspect of the organization. You work within your budget and you provide a great service to your passengers.
So far so good, right?
But what happens when the industry you serve takes a downturn? What is the atmosphere around the hangar when the quarterly-earnings call puts your CEO and CFO in a difficult situation…especially when it has been more than one quarter with the same or worse results? We all know that when earnings are down, the pressure to reduce costs and eliminate spending goes up. Often, one of the first places that gets looked at is the flight department.
A flight department that is not creating value continuously is an easier target for cost cutting measures. Why not preempt that conversation by proactively measuring, adjusting and saving?
But, what if the flight department is operating efficiently? So efficiently, in fact, that it is difficult to find financial waste and abuse? What if, upon looking deep for cost savings, the flight department is not only running very safe and efficiently, but some of your methodologies and processes are so good that you are asked to share them with other areas of the company under a “best practices” initiative? When this happens, you have successfully transitioned your flight department to operating with world-class efficiency with the confidence of the leadership team and proven you are faithfully stewarding the portion of the corporate treasure entrusted to you. With this confidence, the flight department can be defended as an asset, a tool used to conduct business…operating as efficiently as the world class manufacturing arm of the company. The funny thing is, being a highly efficient operation that is not only safe but is a demonstrated business leader is just not that difficult to attain. The path to efficiency nirvana is via metrics.
What are Metrics?
How do you become a world-class business partner to mahogany row? Where do you begin? It all starts with metrics. Metrics is the use of measurement to produce actionable data.
Metrics are parameters or measures of quantitative assessment used for measurement, comparison or to track performance or production.
The Efficiency Movement of the early 20th century is recognized as the birthplace of metrics as we know it today. During this period, the United States, Britain and other industrial nations became interested in reducing waste and maximizing efficiency in manufacturing. The efficiency movement is also referred to as “Taylorism,” a result of the influence of Frederick Winslow Taylor (1856 – 1915).
Taylor was a mechanical engineer who became focused on eliminating waste in the manufacturing process. He pioneered the idea of applying engineering processes and principles on the factory floor. As a result, Taylor was instrumental in the development of what is now known as industrial engineering.
Metrics have played a vital role in the growth of virtually every industry since the industrial revolution. Henry Ford measured the manufacturing and assembly time of each component in his newly established assembly line. In doing so, he used metrics to form the basis of his overall business analytics system. Ford understood the power of metrics to evaluate how efficiently his workers were using available time, energy and material.
Fully understanding your organizational efficiency and “spend culture” are important to success in good times, and critical when an industry downturn occurs.
Who should use metrics?
Short answer: Everyone.
I was raised (professionally) in an organization that lives and breathes metrics. The culture, nay the very DNA of the company’s success, is founded on metrics. In fact, it can be argued that metrics are so important to this company that the culture of measurement has propelled it to the forefront of the industry.
When it was determined that more manufacturing capacity was required to keep pace with the introduction of new models and the associated increase in sales, metrics played a key role in the company’s confidence that the required increase in capacity could be attained by shorter cycle times and higher throughput within the existing real estate. In-depth knowledge of current operating performance, coupled with identified efficiency opportunities, were the foundation on which a world-class design and manufacturing process were built. All of this information came from metrics. Cycle times came down dramatically within 18 months and, in the process, quality went up. Additionally, deliveries became very predictable, which enabled leadership to plan for the future with confidence.
Any organization interested in operating as efficiently as possible with a culture that is constantly on the lookout for savings opportunities should have a robust metrics program.
Is it difficult? No, not at all. Applying metric principles to every aspect of your operation is quite simple. Beginning with learning the mechanics of “good” metrics and where to find the low hanging fruit, immediate results are virtually a given.
A great place to start is with your direct reports. What elements of the business do they have in common? Typically, safety, human resources, and training are areas that affect every department. By selecting common elements to measure, you not only can improve your performance across the board, you can introduce the concept of Horizontal Metrics. Horizontal Metrics are common metrics that can be applied for comparison across different organizational / business units.
For example, what is the employee turnover rate of the various departments within your organization? While turnover rates alone aren’t necessarily success / failure indicators, the cost associated with the turnover rates can be. Furthermore, if your measurement results indicate a particular leader has a significantly higher turnover rate, there may be other issues at play. The interesting thing about metrics is that one discovery can lead to another with even more valuable discovery.
There are as many measurement and improvement possibilities as there are touch points in your everyday flight operations. Virtually everything you do can (and should) be considered as an opportunity for measurement.
What are you waiting for?
“…Time, energy and material are worth more than money, because they cannot be purchased by money. Not one hour of yesterday, nor one hour of today can be bought back. Not one ounce of energy can be bought back. Material wasted, is wasted beyond recovery.” – Henry Ford
As Ford said, you can’t get back one ounce of yesterday or today, but you can directly influence your tomorrow. Begin with simple metrics you can easily measure and easily impact by a change in process or procedure, then go from there. If you get stuck and can’t figure out exactly what to do, go find someone who can help. There are metrics focused experts in virtually every industry. Identify a person in your organization today that loves details and is curious, then invest in metrics training for them. Make them your metrics custodian and turn them loose.
Metrics that produce “actionable data” are incredibly valuable. The change in culture can set you apart from other business units within the enterprise. Data driven decisions from fleet planning to office supplies ensures targeted, cost effective outcomes with substantiation backup that the executives in the C Suite will respect and appreciate. It might even save your flight department one day.
About the author
Vince Restivo is Vice President of Program Management for Mente Group. Vince, with 37 years in business aviation, manages Mente’s Operational Consulting services including, Metrics, Completions and Refurbishment, IS-BAO and Best Practices audits. He uniquely combines vast experience and knowledge in avionics and cabin systems design, integration, connectivity, test and certification, with his passion for excellence in the customer experience and a discriminating eye for detail and quality.