Kaizen – American Airlines Style

American Airlines KaizenSince I live in the DFW area and travel a lot… I’ve gotten pretty familiar with American Airlines.

I should eclipse the magical “Executive Platinum” status within the next month – something that makes me feel sort of sad if you want my honest feeling!

Anyhow, I came across this article which referenced the troubles AA is facing related to customer service. Here’s a little taste.

  • It finished last among 19 U.S. carriers in on-time arrivals for four straight months between March and June, before improving to 16th in July – its highest finish in nine months.
  • Its on-time marks have been beneath the industry average every month since December 2006.
  • For the 12 months ending July 31, American was last among all carriers in on-time flights, with only 67.5 percent arriving within 14 minutes of schedule. That was 6.7 percentage points worse than the industry average of 74.2 percent.
  • Among the 10 largest carriers, American ranked second-worst in the rate of lost-bag complaints for the year ending July 31, ahead of only Delta Air Lines Inc.
  • It has had the third-highest rate of flight cancellations through the first seven months of 2008, ahead of only two regional carriers, Mesa Air Group Inc. and American’s own partner, American Eagle.

Obviously AA has some problems… but so do a lot of people. So instead of dwelling on how bad they are let’s turn our focus to what they intend to do about it.

Change the Specs!

You would imagine, especially as it relates to the on time arrivals issue, AA would relentless attack the waste in their process. They’d look for opportunities to improve flow, cut out non value added steps, while practicing the principles of single minute exchange of dies whenever applicable.

Well that’s what you and I would think.  AA on the other hand, not so much.

No, instead of focusing on making value flow AA is actually increasing the time their planes are on the ground!

American believes that the answer is to add time to its schedule, both on the length of the average flight and the length of stops on the ground. It is taking other steps as well, but the added schedule time represents the thrust of American’s attempt to return to an acceptable on-time record.

The changes won’t speed up flights. But the added time increases the cushion for dealing with problems.

Yep, that’s right… “the added time increases the cushion for dealing with problems.”

I don’t normally like to bash companies… especially companies that hold my life in their hands many times a year… but this really irks me.

The sad thing is this move may actually make AA’s on time metric improve… but the real question is will their customers be any happier?

DFW to New York

Well, if you plan to fly from DFW to New York the answer is probably no.

For an example of how the schedule changes will work, consider American’s Flight 743, an afternoon nonstop flight from Dallas/Fort Worth to LaGuardia in New York.

Until Sept. 2, American scheduled the flight to take 3 ¾ hours from gate to gate. On Sept. 3, the time was increased by five minutes. On Nov. 2, it’ll go up another 25 minutes, to 4 ¼ hours.

Nice, huh? Sounds pretty much like the opposite of increasing value for the customer.

What do you think?  Am I being too critical here?  Or am I being too nice?

5 Comments

  1. Tom

    September 22, 2008 - 1:29 pm

    Value for the customer has stayed the same. That is when you determine that value is $$ per minute of schedule. As the dollars go up (due to increased fuel costs or whatever) the time it takes must go up to keep the value to the customer the same. 🙂

  2. Mike

    September 24, 2008 - 5:44 am

    I think what AA is doing here is synonymous with increasing factory lead times in an MRP system. The system has problems you can’t see due to long lead times. Production control then increases the lead time built into the system to combat an on time delivery problem. But in reality all that’s really doing is adding more production orders to the system that don’t really need to be made. The cycle will continue over and over until someone finally decides to cut the lead time and address the REAL problems.

    Good observations though…

  3. Owen Berkeley-Hill

    September 24, 2008 - 7:54 am

    I see banks and insurance companies investing in Lean, 6-Sigma and Lean Sigma, (but perhaps things may have changes after the turmoil of the last few weeks). There is keen interest in Lean, in hospitals on both sides of the pond. Even the RAF has shown that Lean can work in the military. But in commercial air transport? Boeing talks about having introduced the (Lean?) moving production line, a concept that Henry Ford demonstrated at Willow Run during WWII when he took on the contract to build B24s and did it in a way that produced ten times the volume of Consolidated Aircraft who designed the B24. I’ve heard about learning difficulties, but…. And if you’ve taken an interest in the 787, that supply chain is anything but Lean.
    But at least Boeing is trying to do something. When it comes to airlines and airports, “mother knows best” is the pervading strategy, and “mother” still believes in Batch ‘n Queue. Passengers (us) are regarded by Total Aviation People, according to Flight magazine, as “self loading cargo”, which explains a lot. For example, having cleared customes and security in the UK you wait in the departure lounge, where you are expected to be tempted by cavair and Ferrari (in the overhead bin?). When your flight is called, you are told “your aircraft is now ready for boarding” which is an institutional lie, because when you go to the gate you are asked to queue. Again. Why? If the airctaft is truly ready why not allow people to board as they arrive? That would reduce the waste of “unnecessary processing”: the loading by rows or zones. Perhaps there is an explanation, but it escapes me.
    Much of what the airlines do is very good and has served as great examples to other sectors, but I cannot help thinking that there are areas of paradigm blindness. For example, look out of a gate or aircraft and see the opportunities for 5S: close parallel runways which encouraging queing because landing aircraft have to cross the paths of those taking off (Newark); large equipment parked whereever there is a space; fuel trucks impeding the an arriving aircraft getting to the gate (JFK).
    I agree AA is going about improving their customer satisfaction the wrong way. As airports reach their capacity and slots become scarce (Heathrow) more time on the ground is addressing the symptom, not the root causes, and will probably cause further delays as the aircraft loses its slot. But then I’m not aware of a Lean airline. Any suggestions?

  4. Mark Graban

    September 24, 2008 - 8:29 am

    I’ve flown about 80k miles on AA this year. They are horrible. Altogether horrible. The worst “supplier” of anything I deal with for anything.

    The padding of the lead times — if that’s at least providing an “accurate” delivery (of the plane and passengers) time, then that’s not altogether bad. I’d rather have an accurate time (for planning transportation or activities on the arrival side) than to arrive 30 min late when that lateness is “normal” and common cause variation.

    I’d doubt, though, this increases “customer satisfaction” in any meaningful way.

    Improving the way maintenance is done, improving the environment so that most of their employees aren’t crabby all the time (and taking it out on passengers)…. those are things that could increase customer satisfaction, for me at least.

    Did I mention I think American is the most horrible company ever? Their executives “save money” by slashing employee pay and then they reward themselves HUGE bonuses. No wonder employee morale sucks. I’m sympathetic to the employees, but they take it out on me and fellow passengers. That’s unforgivable.

    And if I really had other options flying out of Dallas, I’d take them.

    I choose to fly non-stop on American, even though they treat me like crap.

  5. Marty Y.

    September 24, 2008 - 12:18 pm

    Ron,

    There’s an article in Fast Company magazine on a hospital system that is essentially implementing Lean/Six Sigma. Very encouraging since I have seen how bad our health care processes are.

    http://www.fastcompany.com/magazine/129/the-cure.html

    I would be interested to hear your comments.