Lean Thinking for Air Travel
Recently I got a call from an aide to Don Carty at American Airlines (their Chairman who resigned this past week.) This person wanted to apply lean thinking to air travel and asked what I thought about their “lean” idea.
It turned out that American was making plans – now announced -- to smooth the flow of passengers and aircraft through their major hubs in Dallas and Chicago. The idea was to spread out arrivals and departures so that planes would come and go at a fairly steady rate through the day, rather than in the massive waves required by classic hub-and-spoke systems. (They apparently thought this was some type of heijunka.) This would mean that gate staff could be smaller and more smoothly employed and that airplanes would wait in shorter queues to take off (possibly permitting the airline to squeeze in one more round trip per plane per day). What Carty’s aide really wanted me to do was to certify that this was “lean” air travel.
I responded, as I always do, “You should start with value from the standpoint of the traveler? Does this proposal make the passenger better off and will the passenger be willing to pay for it?” And it turned out that rolling pulses are actually designed to make better use of airline assets. The traveler arriving in a hub to change planes can now expect somewhat smaller crowds, a somewhat shorter takeoff queue, and…a longer wait in the hub to make connections. Who knows whether travelers think this is a good trade, but no one at the airline was even asking about customer value in a period when cost reduction seems to be most airlines’ only approach to survival.
So let me apply lean thinking to air travel by asking the two questions American should have asked:
What does the traveler really want? My answer is that there are two distinctly different types of travelers. One -- the leisure, price-sensitive traveler -- wants the lowest price to get safely from A to B. The opposite type -- the executive traveler who thinks his or her time is worth a lot of money -- wants the fastest way to get safely from A to B. (And note that each of us may shift from being one type of traveler to the other, depending on the purpose of our trip.)
The problem with the hub-and-spoke airlines is that they are trying to serve both types of passengers with practically the same product, adding a slightly wider seat, free drinks, and an airport hub club for the executive traveler. As a lean thinker would state it, they are co-mingling value streams that really ought to be separated. But even worse, the airlines have been charging the executive traveler, who can’t book ahead or stay over a Saturday, several times the price for practically the same product. And, as we know, executive travelers have largely gone on strike, beginning early in 2001, picking up after 9/11, and showing no signs of returning. (Because the 10 percent of frequent business travelers have in the past accounted for 50 percent of airline revenues, their departure is the root cause of the financial collapse of the hub-and-spoke airlines.) No amount of fiddling with hub operations is going to make much difference in this situation.
Where is the waste in the value stream? Hub-and-spoke airlines have built enormous amounts of waste into their value streams for both types of travelers because to take a trip anywhere the traveler needs to make two flights – one from the origination point to the hub for cross-docking (or self-sortation in this case) and the second from the hub to their destination. When you add in the long changeover times for current aircraft designs (where hundreds of passengers must squeeze through one tiny door to get on and off) and the massive capital and operating costs for the sortation centers, it’s not surprising that most travelers are unhappy, either because the product costs too much or because the trip takes too long.
What would the lean thinker propose instead? It’s actually pretty simple:
1. Disaggregate the value streams for price-sensitive and time-sensitive travelers. 2. Fly everyone point to point using different types of equipment. 3. Develop aircraft types that can be quickly turned (changed over) between flights.
Southwest, Jet Blue, Ryan Air and EasyJet have been moving steadily ahead to introduce point-to-point travel for the price-sensitive traveler. And we can expect their efforts to continue in the years ahead. However, as I experience these carriers, their efforts have only gone half way. They only serve markets where they can generate five roundtrips per day with aircraft carrying 150 passengers. And their turn times have slipped steadily from the 15 minutes Southwest originally claimed to 30 minutes today. Why can’t they offer the same service cost-effectively with smaller jets so they can serve many more points and why can’t they work with aircraft makers to design planes that can be turned in ten minutes or less. (Dr. Shingo’s SMED applied to aircraft set-up reductions!)
At the same time why doesn’t someone – anyone, please! – use smaller commuter jets in a way that actually makes sense by offering scheduled business-class point-to-point service for executive travelers from the secondary airports in every metropolitan area that are grossly underutilized? If travelers could park near the plane, go quickly through security, and avoid take off queues, it ought to be possible to cut turn times and airport waits to a very few minutes. Indeed, by using small terminals, arriving only a few minutes before the flight, and flying point-to-point, it should in many cases be possible to cut total trip times in half compared with hub-and-spoke systems even though the airplanes fly no faster.
These are simple ideas: Ask what the passenger truly values and where the waste lies preventing the provision of this value. Then rethink operating methods and asset requirements. It’s amazing how easy lean thinking can be if only managers can forget about their existing assets and traditional methods for a moment and give themselves the freedom to think.
James P. Womack President & Founder Lean Enterprise Institute, Inc. USA
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