Improv­ing organ­i­sa­tion­al effec­tive­ness in Avi­a­tion Services

INTRODUCTION

The suc­cess and sus­tain­abil­i­ty of an avi­a­tion ser­vices busi­ness hinges on its abil­i­ty to be orga­ni­za­tion­al­ly effec­tive. With numer­ous depart­ments and teams in play, effec­tive man­age­ment of roles and respon­si­bil­i­ties is vital to ensure smooth oper­a­tions in pas­sen­ger services.

Orga­ni­za­tion­al effec­tive­ness encom­pass­es the abil­i­ty of an orga­ni­za­tion to achieve its goals and objec­tives in a stream­lined and effi­cient man­ner. For avi­a­tion ser­vices groups, this means pro­vid­ing safe and reli­able ser­vices that are both cost-effective and profitable.

THE CHALLENGE

Our Client is a mar­ket leader in pro­vid­ing cus­tomised ground han­dling ser­vices, includ­ing pas­sen­ger ser­vices, ramp oper­a­tions, bag­gage and car­go han­dling, flight con­trol, load plan­ning and crew care. With over half a decade of expe­ri­ence at air­ports, the Group serves over 60 inter­na­tion­al pas­sen­ger and car­go airlines.

As a key step to realise its vision of trans­form­ing the busi­ness from a tra­di­tion­al ground han­dling ser­vice com­pa­ny to a mod­ernised resource man­age­ment com­pa­ny serv­ing the avi­a­tion indus­try, the Client kicked-off a trans­for­ma­tion pro­gram, aim­ing to improve its reli­a­bil­i­ty, effi­cien­cy, and prof­itabil­i­ty. They had made con­sid­er­able progress dur­ing the first phase.

Renoir was brought in to explore fur­ther improve­ment oppor­tu­ni­ties when the Covid-19 cri­sis struck dur­ing the Analy­sis phase. Senior man­age­ment became aware of the neces­si­ty of expe­dit­ing the trans­for­ma­tion. They launched the sec­ond phase of the pro­gram and engaged Renoir to facil­i­tate and accel­er­ate the change process. The expand­ed project kicked off to fur­ther trans­form the oper­a­tion and pre­pare for the recovery.

PROJECT APPROACH & OPPORTUNITY ANALYSIS

This project had two major stages, the first being the devel­op­ment and imple­men­ta­tion stage, cov­er­ing inte­grat­ed oper­a­tions and organ­i­sa­tion design. The sec­ond stage cov­ered sus­tain­abil­i­ty and adop­tion of the changes made in the organistion.

First­ly, the focus for inte­grat­ed oper­a­tions was as follows:

1. Devel­op and imple­ment an improved IOC-centric PDCA cycle
2. Upgrade and roll­out one sin­gle cohe­sive MCS (KPIs, Dash­boards, Shift/Daily/Weekly/Monthly Per­for­mance Reviews) across the organisation
3. Inte­grate all func­tion­al areas
4. Ratio­nalise Engage­ment, Dura­tion and Task Effi­cien­cy Standards

Sec­ond­ly, the focus for organ­i­sa­tion design was as follows:

1. Macro Lev­el Organ­i­sa­tion Assess­ment (Span of Con­trol, Lay­er­ing, Respon­si­bil­i­ties, Accountabilities)
2. Micro Lev­el Organ­i­sa­tion Assess­ment (Work­load assess­ment, Man-loading)
3. Design and Devel­op­ment of the “To Be” Organ­i­sa­tion Struc­ture, includ­ing KPIs
4. Imple­men­ta­tion Frame­work Plan­ning and a real­i­sa­tion plan

The sec­ond stage of the project is the Sus­tain­abil­i­ty Phase, the major focus being fur­ther sus­tain­ing the result of inte­grat­ed oper­a­tion and organ­i­sa­tion readi­ness and adding a com­mer­cial work­stream to facil­i­tate the devel­op­ment of cost­ing and mar­gin man­age­ment tools.

The focus of this Stage included:

1. Sus­tain­abil­i­ty facil­i­ta­tion of the Man­age­ment Con­trol Sys­tem, includ­ing MES, new Pro­duc­tiv­i­ty Index and per­for­mance review structure
2. Dri­ve real­i­sa­tion of tar­get­ed cost-to-serve and a stan­dard prod­uct offer­ing tool
3. Analy­sis, plan­ning and imple­men­ta­tion of the office space ratio­nal­i­sa­tion project
4. Mod­el­ling frame­work, sce­nario analy­sis and imple­men­ta­tion plan­ning of con­tract stan­dard­i­s­a­tion, and the ratio­nal­i­sa­tion of Part time/Full time resources

IMPLEMENTATION

The Client teams and Renoir worked hand in hand togeth­er design­ing and imple­ment­ing a series of improve­ment ini­tia­tives with the spot­light main­ly on effi­cien­cy, reli­a­bil­i­ty and profitability.

With regards to Effi­cien­cy, we estab­lished a Min­i­mum Engage­ment Stan­dard (MES) across all the oper­a­tional areas, which achieved sig­nif­i­cant effi­cien­cy improve­ments in all oper­a­tion func­tions. The Clien­t’s month­ly over­all per­for­mance index improved by 17.9% MoM.

The entire Macro and Micro organ­i­sa­tions were redesigned in all areas after sim­u­lat­ing oper­a­tional ros­ters to deter­mine head­count require­ments, which result­ed in a 29% head­count reduction.

We estab­lished more effi­cient process­es and man­age­ment con­trol tools with dash­boards, dri­ving increased own­er­ship and account­abil­i­ty at both the GM and FM lev­els, cen­tralised ros­ter­ing process­es and improve­ment of the skills matrix and cross train­ing approach.

Regard­ing Reli­a­bil­i­ty, we restruc­tured the organ­i­sa­tion design with new­ly designed roles, par­tic­u­lar­ly focussing on sin­gle source of own­er­ship across the organ­i­sa­tion, new key account man­age­ment roles and account­abil­i­ties, all of which assist­ed in improv­ing cus­tomer ser­vice and satisfaction.

Last­ly, with regards to Prof­itabil­i­ty, we imple­ment­ed a ful­ly auto­mat­ed cost to serve tool for the fre­quent and sys­tem­at­ic mar­gin man­age­ment for exist­ing air­line cus­tomers. We also refined the Stan­dard Prod­uct offer­ing tool to allow for time­ly cal­cu­la­tion and cus­tomi­sa­tion of resources pro­vid­ed and add-on services.

KEY RESULTS

Work­ing with the Client, Renoir achieved the fol­low­ing results at the end of the project: