Technical Information as an ROI Engine for Modern Airlines · 2018. 5. 24. · Technical...

WHITE PAPER

Transforming tech pubs from a cost of doing business to a competitive differentiator driving improved efficiencies and value

Technical Information as anROI Engine for Modern Airlines

Table of contents

WHITE PAPER - FLEET SOLUTION ROI 2

Executive Summary --------------------------------------------------------------------- 3

Introduction -------------------------------------------------------------------------------- 4

Background -------------------------------------------------------------------------------- 5

Optimizing Tech Pubs ROI for Aircraft Operators ----------------------------- 7

Aircraft Maintenance Technician Resource Optimization ---------------- 7

Increased Aircraft Availability & Utilization -------------------------------------- 9

Reduction in Print, Hardcopy Scanning & Storage Costs ------------------ 10

Ability to Implement Best Practises for Competitive Differentiation ---- 10

The Flatirons Fleet Solution in the Real-World ----------------------------------- 11

Making it Real ----------------------------------------------------------------------------- 13


BOEING STUDIES determined that a typical maintenance engineer spends between 30 and 40% of their work time locating relevant technical information required to do the task at-hand, or completing required paperwork associated with job sign-off and completion.

EXECUTIVE SUMMARYTHE ROI ENGINE

LOCATING TECHNICAL INFORMATION

AIRCRAFT AVAILABILITY

MANAGING PAPER

IMPROVEMENTS IN AIRCRAFT UTILIZATION, whether from improved maintenance or any other operational lever, result in positive ROI by increasing the number of block hours per day, and as a result the number of trips for amortizing cost and increased revenue per period.

PAPER BASED PROCESSES are costly on many levels, but direct costs including paper-based printing of manuals, manual excerpts, and work cards are a significant expenditure in many airlines today.

$52.2MILLION

IMPACT OF A 50% REDUCTION IN INFORMATION ACCESS & WRAP UP

TIME PER ANNUM

$51.3MILLION

IMPACT OF A 1% IMPROVEMENT OF AIRCRAFT

UTILIZATION PER ANNUM

$2.5MILLION

IMPACT OF ELIMINATING PAPER BASED ON LABOR, PRINT HARDWARE, SHIPPING,

SCANNING, AND STORAGE FACILITIES COSTS PER ANNUM

Based on an airline operating a fleet of 400mixed model, mixed OEM aircraft

REAL WORLD RESULTS

Technical Information as an ROI Engine for Modern AirlinesIntroductionThe business of running a successful airline is incredibly complex, involving careful planning and execution across multiple disciplines, including engineering, operations, logistics, and finance. As volatility in fuel prices and steadily increasing costs for new generation eEnabled fleets add to this inherent complexity, today’s operators are seeking as many tools as possible to grow their business in ways that improve passenger experience while maximizing revenue and operational effectiveness. While fuel prices, aircraft costs, or macro-economic trends may be outside the reach of any individual airline or industry to control, there are an increasing array of options for optimizing operations through tighter control of maintenance and technical operations content.

Maintenance content used by engineers in the hangar or on the tarmac has a major impact on both airlines cost structures (as the major cost center outside of the aircraft itself, fuel, and human resource costs), but also revenue potential. Investment in maintenance and technical ops content and the tools used to manage and deliver it provide a major source of cost / service differentiation, and a strong return on investment (ROI) that typically provides pay-back in less than a year for most operators managing fleets of 100 or more aircraft. This paper highlights the impact of these technical information management investments on operational costs, revenue potential, and the continuous improvement culture critical to sustained ROI.

Fleet operators are continually looking for a competitve edge to drive improved efficiencies and levels of service. This white paper addresses that demand through insights to the productivity savings and cost redistributions that can be made through the adoption of a best-of-breed maintenance technical information platform and associated best practise in order to transform tech pubs into an ROI engine rather than merely a cost of doing business.


BackgroundThe following context will be useful in understanding three areas for ROI capture, namely baseline metrics around time spent locating technical information for large asset maintenance, the factors that drive aircraft availability and utilization, and the costs of printing, distributing and managing paper.

TIME SPENT LOCATING TECHNICAL INFORMATIONPrior to understanding the improvements in productivity that the Flatirons Fleet Solution can bring to an airline’s maintenance organization, it’s important to understand what the “baseline” for performance in this arena is within the aviation and defense industries, with similar results benchmarked for other large asset-driven industries.

As part of the ROI justification for their maintenance toolbox, an OEM-proprietary technical information management solution that competes with the OEM-independent Flatirons Fleet Solution, Boeing studies determined that a typical maintenance engineer spends between 30 and 40% of their work time locating relevant technical information required to do the task at-hand, or completing required paperwork associated with job sign-off and completion.1 Assuming an average net cost of employment of $87,000 per year2 for an aircraft maintenance engineer, this represents $34,800 per mechanic in potential savings, a staggering number when considering the number of engineers employed by the typical mid- to large-size carrier.

In more than two decades of service in providing technical information management solutions to large asset OEMs and Operators, Flatirons has seen the 30-40% figure for information access and signoff validated independently by a large semiconductor tool manufacturer, as well as a large manufacturer of construction and mining equipment.

AIRCRAFT AVAILABILITY AND UTILIZATIONAs with the cost profile of AMTs, aircraft availability and utilization are also directly impacted by the speed and efficacy of maintenance or repairs. At a high-level, the availability and potential utilization of an aircraft of any other large asset is driven by a number of factors, most importantly:

� Mean Time Between Failure (MTBF) – this is also known as “Reliability”

� Mean Time to Repair (MTTR) – this is also known as “Maintainability”

� Mean Waiting Time (MWT) – this is also known as “Supportability”


“...a typical maintenance engineer

spends between30 and 40%

of their time locating relevant technical

information...”

1. Rex Douglas, “Boeing Toolbox”, Boeing Aero QTR_1.07, 2007 (http://www.boeing.com/commercial/aeromagazine/articles/qtr_1_07/article_04_1.html)

2. Samantha Ley, “The Average Pay for an Aircraft Mechanic”, Demand Media (http://work.chron.com/average-pay-aircraft-mechanic-8833.html)

The most important factor that impacts MTBF or Reliability is maintenance. And the consequences to maintenance of not having easy access to timely and accurate technical documentation are:

� Long lead-time to find information

� High risk of using information that is not up-to-date

� Maintenance tasks take longer to accomplish

The major factor that influences MTTR or Maintainability is the ability to repair or maintain equipment quickly and easily. Some of the consequences to maintainability of having incorrect or hard-to-access content are:


� Maintenance tasks take longer to accomplish

The figure below shows a high level representation of how reliability, maintainability, and supportability contribute to utilization.

FACTORS IMPACTING AVAILABILITY


AVAILABILITYMTTRMAINTAINABILITY

MTBFRELIABILITY

MWTSUPPORTABILITY

DESIGN

ABILITY OF THE OPERATOR

MAINTENANCE

REDUNDANCY

ABILITY TO BE SUPPORTED

ABILITY TO BE PREPARED

TESTABILITY

COMPLIANCE

TECHNICAL INFORMATION

SPARES

TOOLS

ADMINISTRATION

A+B+C

C

D

A+B

ECONSEQUENCESA. Long time to find informationB. High risk in using not updated informationC. Long time to perform maintenance tasksD. Long time to purchase the right sparesE. High management costs


There are several major factors that influence MWT or Supportability, including:

� Long lead-time to locate and purchase the right Spares


� High risk of using information that is not up-to-date

� High management cost

All of these elements impact the availability of a mission critical system regardless of industry, and all of these elements can be reduced or eliminated by ensuring that users always have access to correct and intelligent content. For airline operators, whose capital assets are priced in the hundreds of millions of dollars per tail, more availability means more trips to cover the cost of the asset.

Optimizing Tech Pubs ROI for Aircraft OperatorsThe following subsections outline areas that contribute to the strong positive ROI associated with adoption of a best-of-breed technical information management platform for aircraft maintenance and technical operations like the Flatirons Fleet Solution.

Aircraft Maintenance Technician Resource OptimizationBased on the findings by Boeing (validated through a number of large asset industries) that technicians in a typical maintenance setting can spend up to 40% of their time accessing technical information required to do their jobs using traditional tools and processes – which in many operations are still either paper-based, or using digital tools that still mimic paper-based processes – areas for improvement and optimization are substantial.

Based on Flatirons’ experience deploying the Flatirons Fleet Solution to some of the world’s most successful operators, that 40% figure can be cut by more than half through adoption of innovations that include (in rough order of sophistication)

� Interactive Electronic Technical Publication (IETP): The first area of improvement available to airlines operating at a base level of technical information management proficiency is to adopt IETPs in place of paper-based maintenance manuals and work cards. Most airlines operating at scale have made this adjustment already, though many operations continue to rely extensively on paper for different parts of the process, such as work sign-off.

� Single Source IETP: Adopting IETPs in place of hardcopy maintenance manuals or work cards is an important first step to optimizing AMT information retrieval times, but often leads to a proliferation of proprietary applications and viewers. Most large airframe and engine OEMs provide either standalone or cloud-based viewers to access their product information, resulting in a proliferation of systems at many airlines. The need to access multiple disparate systems to locate the information required to perform a maintenance task is a major source of productivity loss, and is thus a prime target for improvements. Providing a single source for all maintenance technical information, regardless of manufacturer, type or content format, is a significant source of tech pubs ROI.

� Mobile IETP: Once an operator has consolidated access to multi-OEM fleets, engines, and components under a single IETP viewer, a follow-on area of improvement is mobilization of that content. The “kiosk” model, in which one or more maintenance PCs reside in a central location (such as a hangar) for use by multiple maintenance engineers is inherently inefficient – the time to leave the work area to access and print a new publication is significant, and often occurs multiple times per job. Mobilizing the content to allow access via tablets, phablets, and smart phones is a major source of productivity improvement for maintenance task performers. Providing a means for this mobility to function in off-line environments where data connections are unavailable or sub-par further builds atop this labor savings.

� Enterprise Enabled IETP: Ensuring that the engineer’s mobile document viewer provides maximum value by connecting it with vital pieces of the airline’s enterprise infrastructure provides significant time-saving through automation or process optimization. Some examples of enterprise enabling of IETPs include:

� Parts lookup and request: Integration to parts lookup and request from within IETP to allow quick ordering of required parts without requiring the AMT to exit the application or otherwise change context from the repair in-process.

� Pre-emptive work packaging: Integrating the IETP viewer with the eEnabled Aircraft Health Monitoring (AHM) systems used by modern aircraft allows work packages to be assembled in advance of the aircraft’s entry into maintenance based on received fault codes, speeding diagnosis and repair times.

� Electronic sign-off for task completion: The Boeing study citing the cost of technical information access for large asset maintainers included the time spent “wrapping up” work via signoff, a critical step in a compliance-driven industry like aviation. Optimizing this process through the use of secure electronic sign-off in place of paper-based


MOBILE IETP

ENTERPRISE ENABLED IETP

ELECTRONIC SIGN-OFF

SINGLE SOURCE IETP

“wet signatures” is a major source of productivity improvement for AMTs, as well as as source of cost reduction related to paper-based printing and distribution (addressed later in this paper).

� Feedback capture for continuous improvement / process optimization: Aircraft technicians often understand maintenance procedures better than the OEM who produces the aircraft. For this reason, providing a quick, easy, and in-viewer mechanism to capture feedback from AMTs on procedural errors or potential process improvements is an excellent way to make increased efficiency a culture, not just a one-time focus. Making it easy for AMTs to submit change request for consideration is a facilitator of this continuous improvement culture.

Based on a current performance baseline in which vendor-specific IETPs are used for multiple fleets, engines, and components and in which mobility has not yet been adopted for maintenance operations, a decrease in 50% in task performer time required to access required information is completely feasible. Cutting the time associated with information retrieval and signoff can thus provide a net productivity improvement for AMTs of 15%-20%.

Increased Aircraft Availability and UtilizationA fairly obvious but often overlooked contributor to positive ROI for technical information management solutions like the Flatirons Fleet Solution is the ability of more timely, effective, and compliant maintenance and repair to positively impact the availability and utilization of aircraft. Aircraft utilization is measured across a wide variety of axes, but at its simplest level it is calculated by looking at the number of block hours (i.e. the time required to transit from gate to gate as part of an end-to-end flight) per day. For most large-scale operators, block hours per day range from a low of 8 to a high of 14 depending on route length, aircraft type, and the level of operational efficiency of the airline3.

Improvements in aircraft utilization, whether from improved maintenance or any other operational lever, result in positive ROI by increasing the number of block hours per day, and as a result the number of trips for amortizing cost and increased revenue per period. By increasing the number of flights per period, the increased utilization has the dual operational impact of lowering the fixed cost per block (leases, insurance, salaried crew, etc.) hour while increasing the number of revenue generating block hours.

Applying these concepts specifically to improvements in aircraft maintenance execution brought about by tighter control of maintenance and technical operations content yields strong ROI results even when improvements specifically attributable to maintenance improvement are small.


“...cutting the time associated with

information retrieval can provide a

net productivity improvement of

15% - 20%”

3. Massachusetts Institute of Technology, “Airline Data Project”,(http://web.mit.edu/airlinedata/www/Aircraft&Related.html)

Reduction in Print and Hardcopy Scanning and Storage Costs Despite the vanguard role that aviation has played in the development of innovative technologies, like SGML and XML publishing, the industry is still laden with paper-based work processes. Paper based processes are costly on many levels, but direct costs including paper-based printing of manuals, manual excerpts, and work cards are a significant expenditure in many airlines today. Far costlier than simple print and distribution costs are the capture of signed work cards, which in many organizations involves careful collection via a jobs planner, scanning of the wet signature for the completed work card, and storage of the physical cards in a warehouse facility for up to 3 years. Indirect costs such as potential compliance exposure due to lost or misplaced hardcopies, or potential latency in communicating the latest procedural are harder to quantify, but just as real.

Ability to Implement Proprietary Best Practices for Competitive Differentiation Not quantified as part of this paper, but potentially the most critical in terms of ability to impact the success of an airline relative to competitors, is the ability for an airline to take total control over their technical content in a way that is independent of OEMs. Airlines for the most part compete on an even playing field – they operate the same aircraft, in the same conditions, for the same passengers. One airline succeeds where another fails largely in its ability to to effectively define, communicate, and measure proprietary best practices more quickly than their competitors. Absent control over the technical information used to maintain and operate the organization’s costliest capital assets, airlines will revert to a lowest common denominator of accepting OEM updates in their due time – effectively surrendering their most potent weapon in achieving market dominance against competitors. Flatirons Fleet Solution is designed specifically to empower airlines and MROs to take control of their data for competitive differentiation, regardless of the manufacturer, engine, or component being maintained or repaired or the location where work is being done.

10WHITE PAPER - FLEET SOLUTION ROI

“...the average aircraft generates 217,500

pages of paper over it’s service lifecycle ”

“...delays cost the airline industry $5 billion

annually”

The Flatirons Fleet Solution in the Real-WorldIn the preceding sections we’ve seen details on the types of improvements and associated ROI possible through investment in a best-of-breed, OEM-independent technical information management solution like the Flatirons Fleet Solution.

To summarize these impacts for a hypothetical airline operating a fleet of 400 mixed model, mixed OEM aircraft, the potential savings based on a 15% improvement in AMT productivity through more streamlined access to manuals and work cards looks like this:

Inputs

Fleet Size (used to align to # of AMTs) 400 tailsAverage AMT net cost of employment $87,000 USDSize of AMT Workforce 4,000 AMTsImpact of 50% reduction in information access / wrap-up time 15% productivity improvementAnticipated ROI(No. of AMTs)* (average employee cost)* (% productivity improvement) = ROI

$52.2 million USD per annum

Most Flatirons airline customers actualize this ROI gradually by allowing their maintenance workforce to remain at near-static levels for a period of time (length depends on organization’s growth trajectory) as their fleets grow to “absorb” the newly gained productivity improvements and reduction the labor cost per tail.

For aircraft utilization, which is measured by the number of block hours (number of hours between gate departure and gate arrival) per day and revenue booked within those hours, the ROI for this same 400 aircraft operator is even more compelling.

The following table demonstrates the return on investment associated a 1% utilization rate improvement, a conservative target given the strong correlation between accurate, available, timely information at the point of task performance outlined in the “Background” section of this paper.


Inputs

250 narrow body, single aisle aircraft (e.g. A320 or 737 class)

� Typical cost per block hour of $4000 - $5000 USD4

� 10 block hours per day

� Net profit potential of $2,000 per block hour based on typical flight and load

100 wide body, twin aisle aircraft(e.g. A350 or 787 class)

� Typical cost per block hour of $8000 USD5



50 double deck aircraft(e.g. A380 class)

� Typical cost per block hour of $26,000 USD6



Anticipated ROI[(block hours per day)* (net profit potential)* (365.25 days per year)]* (.01) = ROI per type

� Narrow body ROI: $18,262,500 USD per year or $73,000 per narrow body tail in service per year

� Wide body ROI: $14,062,125 USD per year or $140,621 per wide body tail in service per year

� Double deck ROI: $18,993,000 USD per year or $379,860 per double deck tail in service per year

TOTAL ROI: $51,317,625 USD per annum

Additional cost savings associated with the elimination of paper from the maintenance process are defined below, and are based on a Flatirons customer engagement in which an operator with a fleet of approximately 350 tails sought relief from the costly printing and distribution of work cards and maintenance manuals. For this customer, completed work cards needed to be laboriously scanned and stored for a period of 3 years, entailing significant labor and facility costs, outlined for the purposes of this white paper below.


4. http://catsr.ite.gmu.edu/SYST660/Chap5_Airline_Operating_Costs_and_Measures_of_Productivity.pdf

5. http://planestats.com/bhsw_2014mar

6. http://www.opshots.net/2015/04/aircraft-operating-series-aircraft-operating-expenses/

Inputs

Print savings associated with elimination of: � Print fulfillment for manual excerpts and task cards

� Scanning of signed work cards

� Storage of wet signature hardcopies for 3 years

TOTAL ROI: $2,500,000 - $3,000,000 USDper year for paper, labor, print hardware, shipping, scanning, and storage facilities costs

Making it RealThis ROI model for a typical 400 tail airline helps illustrate some of the compelling cost and efficiency benefits that tighter control over the organization’s vital maintenance and technical operations content can bring – literally tens of millions of dollars per year. The cost of adoption for the Flatirons Fleet Solution, including all of the indirect to the organization’s infrastructure, training development, policies and procedures, and other change management considerations, is often eclipsed within the first six months of production usage, and in virtually all cases achieved full ROI within 1 year of go-live.

In the real world, investment in the Flatirons Fleet Solution to realize concrete operational savings has been a priority for some of the largest and most successful airlines in the world, including American Airlines, Delta Air Lines, United Airlines, and many others. The benefits outlined in this white paper – in terms of AMT productivity and efficiency, aircraft utilization, and ability to implement proprietary best practices – have been essential to their success in the marketplace, and their ability to operate at scale in this complex environment.

The Flatirons team understands the business of operating aircraft at peak efficiency, and our team has worked with operators worldwide to implement solutions that simplify access to critical technical information for maintenance and tech ops task performers. Let us learn more about your organization’s unique challenges to see how our experiences can help transform technical information management from a cost of doing business to a differentiator driving improved efficiencies and levels of service.

“a 1% utilization rate improvement for a typical 400 fleet

operator represents an annual saving of over

$51 million”


ABOUT FLATRONS SOLUTIONS

Flatirons Solutions provides consulting, technology, and outsourcing for content lifecycle management. For more than 20 years, it has served global Fortune 1000 customers in aerospace, automotive, electronics, financial services, government, healthcare, and publishing. Its customer engagements help organizations efficiently deliver the right information, at the right time, to the right people by leveraging structured content and digital media — Turning Content into Knowledge®.

[email protected]

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FLATIRONS REGIONAL HEADQUARTERSAMERICAS Flatirons Solutions, Inc. Irvine, CA +1 303 627 6537 EUROPE Flatirons A/S Birkerød, Denmark +45 4594 9400 ASIA Flatirons Solutions (Shanghai) Software Co. Ltd Shanghai, China +86 21 6104 2691

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