Lease strategy project (lem)

Technical Support and Operations Rolls-Royce

Lease Engine Pool

Improvement Strategy

Michael Davies

April 2005


Mission

• To provide a world class spare engine

service that meets our customers

requirements (for standard, condition and

timeliness), without exception.


Engine leasing

FRONT

DESK

LED

Rates

STOBL

Transport

Insurance

Deposit

Lease offer

Lease request

Eng dispatch

Serviceable

engines

Requirements document (CRD)

Customer

Technical Support and Operations

Off wing management

Secure storage Lease team

Fleet Ops OH Support

Campaigns

SV Workscopes

Slots

OWC/SM

Post lease

check Lease Eng

Data Set

Aft Business

MEAROS

Policy

Process

Line main

Config IP

Fleet planning

Pool sizing


Improvement planning

Scope Whole lease process

EBU policy T9/8/7/5

Additional services

Services culture Flowdown of attitude

Training

Satisfy stakeholders

Vision and mission

BR/AE strategy Transportation

Plan

Execute

Build in MQF

Previous awayday

Customer complaints

Embody RCP

Management study

Str

ate

gy

Baselin

e


Objectives Establish consistent support

Develop whole process

Develop resource

Develop PPD

Define documentation

30/60/90 day achievements

Resource Identify people requirements Team size

Development planning

Plant H8

Equipment Database

Scanner

Fleet database

Problem database

FSO Monthly reports

Oversee post lease

Confirm packs

Communicate Intentions

Progress

Team/Ops/TSO/CBT/customers

Reengineer function "Spare engine services"

Targ

ets

Lin

kC

apabili

ty

Improvement planning (2)


Define KPI Operational

Business

Contractual

Customer satisfaction

Regulatory/quality

Feedback/control measures DMAIC

Identify best practice RRC

RRD

Wider RR

Benchmark

Competitor intelligence

Build in DMAIC Project 1

Future projects? > 6 months

RRCorpPro

cess

Excel

Benchm

ark

Measure

ment

Improvement planning (3)


Identify and review top level functions

Identify and review sub functions

Review current processes Budgeting

(target mid year) Fleet planning LED in Fleet Ops tool

Fleet management SV/campaigns

Front desk engine leasing Out hours insurance/deposit

Engine movements Decision

Function

Invoicing

Post lease Map

Rework Workscope

Secure funding

Management

Inventory Manage

Store

Pool sizing New pool

Acquisitions/retirals

Existing pool

Documentation LEG

Awayday

Lease committee Review leases in period

Strategy

Lessons learnt

KPI's

aeromanager

Aftermarket (H Heuval) Embody policy on sub processes

Front desk/Fleet Ops

Activitie

sImprovement planning (4)


Improvement programme


DMAIC (M)easure Pareto of negative responses (out of 15)

0

2

4

6

8

10

12

De

live

rey t

ime

line

ss

All

Da

ta c

om

ple

ted

Oth

er

insp

ectio

ns r

eq

uir

ed

Cu

sto

me

r re

qu

ire

me

nts

Su

ffic

ien

t d

eta

il

NM

SB

co

mp

lete

an

d a

ccu

rate

Fu

lly c

ert

ifie

d

Un

acce

pta

ble

sh

ort

ag

es

Mo

d s

tan

da

rd (

co

nfig

) co

rre

ct

Co

rre

ct

form

ats

use

d

AD

lis

t co

mp

lete

an

d a

ccu

rate

Sh

ort

ag

e /

mis

sin

g f

orm

co

rre

ct

De

live

red

on

tim

e t

o p

rom

ise

En

gin

e r

atin

g c

orr

ect

En

gin

e m

ad

e s

erv

ice

ab

le (

RR

)

Cu

sto

me

r re

qu

ire

me

nts

ch

an

ge

De

live

rey c

on

ditio

n a

gre

ed

Oth

er

no

n c

on

form

an

ce

Ch

an

ge

s t

o s

hip

pin

g in

fo

Co

nd

itio

n o

f e

ng

ine

Le

ase

te

rms a

cce

pta

ble

RR

/OW

C m

et

exp

ecta

tio

ns

Accu

rate

Re

pe

at

bo

rosco

pe

ne

ed

ed

All

resp

on

sib

ilitie

s d

isch

arg

ed

FS

O a

ssis

ted

pa

rt 2

pa

ck

To

ld a

bo

ut

no

n-c

on

form

an

ce

Le

ase

off

er

co

rre

ct

De

live

red

to

co

rre

ct

loca

tio

n

Ma

rgin

co

rre

ct

Question

Nu

mb

er

of

ne

ga

tiv

e r

es

po

ns

es

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

Number of responses

Cumulative percentage


DMAIC

• Defects per Million

Opportunities (DPMO)

• Measured against CTQC for

Lease Group input and output

– 238,710 input DPMO (σ = 2.2)

– 244,444 output DPMO (σ = 2.2)

– Defects delivered to customer

• 97.7% bad passes

• 2.3% introduced by Lease team

• Post lease check and

documentation by OWC


Improvement summary

• Review current operation – Containment

• Implement improvement scheme for 2005

– Process overhaul

– Service level

– Implement firm eng status – GO / NO GO

– Fleet management

– Pre or locally approved expenditure

– Rebrand - “Spare engine services”


5 – Manage Installed Equipment

5.6 Supply Lease Engines

Overall process ownership – Operations Room (TS&O)

Key deliverable – Delivery of lease engines within committed time-scales where contractually required

5.6.2

Determine most

appropriate lease asset

to use, based on

geographic, config

requirements

5.6.3

Generate lease rates

for use in STOBL

(or reverse STOBL) as

required

5.6.5

Launch lease engine

transportation logistics

Asses requirement

for On-Platform Care

intervention

5.6.6a

Instruct any workscope

requirements to

address configuration

issues

5.6.7

Ensure customer

delivers all required

lease engine group

paperwork

Update business

plan as required

5.4.3

5.6.1

Determine if lease

engine support is

required based on

contractual obligations

5.6.4

Execute STOBL with

Customer

Advise Aftermarket of

potential costs

5.6.6b

Generate workscope

requirements to

address configuration

issues and obtain

slot as required

5.6.8

During lease, ensure

customer maintains

accurate flying hours,

cycles and maintenance

information

Investigate

opportunities for On-

Wing Care

intervention

Process lead : Chris Compton Process owner : Rob Hill ASG 5.6

5.5

Technical Support & Operations

Customer Business

Aftermarket

accountability

Regional

accountability

Overhaul

Support

accountability

Ops Room

accountability

Issue 1.2

Air En Mar Def


Post lease checks - use of OWC

• Dissatisfaction (Customer Complaints) – Missing components

– Incorrect documentation

• Engine downtime (ROI) – Average 22 days to declare serviceability

– 65% LEDS finished

– 1% LEDS complete and accurate

• Replacement parts (Incremental cost) – Non-recovered parts (MVP bags)

• Effect of alternatives is already known!!!


Cost of OWC – 2005

Cost of OWC per engine type

21%

17%

20%

20%

11%

11%

T500

T800

T700

524

535

Tay

OWC charges summary

Base Remote Parts $1,500 Averages Post lease $10,650

Pre-lease inspection $1,500 $2,200 Travel/subsistence $1,500 Pre lease $4,850

Post lease check $6,500 $8,800

Engine stand transfer $4,500 -

Additional cost prediction

Ops forecast

Installations $118,825

T500 T800 T700 524 535 Tay

Installations 14 8 9 9 5 4 Terminations $372,750

Terminations 7 6 7 7 4 4

Total $108,500 $83,300 $96,375 $96,375 $54,725 $52,300 $491,575 Total $491,575


Decreased eng downtime

• 10 day improvement on post lease service-

ability performance

– Currently 22 days

– With OWC 12 days (or better)

• Assuming 2 leases/ESN/year

– +20 revenue days or ~ 6% /ESN/year ($5000/day)

– 120 days on normal fleet (+1 lease/36% eng) ~$10M

– 340 days on large fleet (> 100% eng) ~$15M

– Pool size and flexibility


Engine condition

Post lease = NO-GO

• Post lease check

• Lease Eng Data Set (LEDS)

• Discrepancies addressed

• Secure storage

Pre lease = GO

• Transport

• Locate

• Storage

Discrepancies

- documented

- communicated

- written agreement

Intermediate condition = M.E.L.


Improvement scheme – buy off

• Communication & buy off

– Aftermarket (Exec/ABE’s/Finance)

– Regions (CS/Commercial)

– TS&O (Exec/Ops Room)

• Policies in place for major changes

– Post lease checks on large engines (Trent/RB211)

– GO/NO-GO engine status implemented

• Lease rate price increase

– Recover an amount of potential revenue

– Increased service level thru OWC

– Communicate


The End

Lease strategy project (lem)

Business

Transcript of Lease strategy project (lem)