Realization Technologies Concerto software
A University of Tennessee professor is part of a team that won the prestigious Franz Edelman Award for increasing U.S. military revenues by nearly $50 million through a radical streamlining of the maintenance and repair processes for the Air Force's largest transport plane, the C-5.
The work took just eight months and cost less than $1 million. Professor Mandyam Srinivasnan, together with the Warner Robins Air Logistics Center in Georgia and software provider Realization Technologies Inc., won the competition that's been called the Super Bowl of business operations research and management sciences. Srinivasnan is an expert in lean management and theory of constraints and a member of UT's Lean Enterprise faculty.
Warner Robins Air Logistics Center is a primary U.S. Air Force maintenance and repair facility for the C-5, C-17 and C-130 transport planes, and the F-15 fighter jet. The C-5 is the largest transport plane in the fleet, but it is an aging, out-of-production aircraft that has been difficult to maintain.
Before the improvement team became involved in the Warner Robins' operation, C-5 repairs took an average of 240 days, and the facility had up to 13 C-5s--more than 10 percent of its fleet--under repair at one time. Because a C-5 can generate at least $40,000 in daily revenues by transporting goods for the various branches of the military, more than $500,000 of potential income was tied up each day by planes under repair in the facility. Thus, Warner Robins was under significant pressure from the U.S. military to reduce maintenance turnaround time and get more planes flying.
Bill Best, deputy director of an aircraft maintenance group at Warner Robins and a graduate of UT's aerospace master's of business administration program, partnered with Srinivasnan to meet the challenge. As part of his MBA program, Best had worked with Srinivasnan to significantly cut costs in another area of the center and realized the potential of applying a business tool called critical chain project management (CCPM) to the C-5 maintenance improvement project.
CCPM helps facilities analyze processes and use resources more efficiently. Realization Technologies produces Concerto, a software suite that's often used for implementing CCPM activities. By implementing this process and installing Concerto, Warner Robins was able to reduce C-5 turnaround time to 160 days and the average number of C-5s under repair at any given time from 13 planes to eight.
Annual revenue and cost-savings implications from the improvement program have been enormous. Having five additional planes operational at a given time generates an estimated $49.8 million annually. This is even more significant when you consider that the cost for replacing the capacity of five C-5s--should that have become necessary--would have been about $2.3 billion.
Additionally, because of the extra workforce capacity generated through these efficiency improvements, Warner Robins expects to create additional revenues of $119 million through 2008 and $248 million through 2009. By having fewer C-5s under repair in the facility, 11 dock spaces are now available for other work. Had the center opted to build 11 new dock spaces, the cost would have been about $220 million.
"There is another key consequence that we measure not in dollars, but in human lives," says Ken Percell, the highest-ranking civilian at Warner Robins. "The five C-5s returned to the Air Force will immediately reduce dangerous convoy operations in combat areas, saving uncounted lives that might have been lost."
Srinivasnan notes that reducing the number of aircraft in the repair facility also means that there is less competition for limited resources. Repair teams have been able to focus on fewer planes at a time, and maintenance quality has improved.
With the C-5 improvement project success complete, Warner Robins is now implementing CCPM on its C-130s to reduce its work-in-progress from 24 aircraft to 15.
Realization Technologies Concerto software
- Warner Robins was able to reduce C-5 turnaround from 240 days to 160 days.
- The application of critical chain project management (CCPM) and implementation of Concerto software helped the organization pinpoint inefficiencies in the maintenance and repair processes.
- The results of this program have directly increased the revenues of the U.S. military by $49.8 million and saved it millions more in forecasted expenditures.