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Lease strategy project (lem)
- The document discusses Rolls-Royce's lease engine pool and strategies for improvement. It aims to establish a consistent, world-class spare engine service for customers. - It analyzes customer satisfaction data and defects to identify areas for improvement. It also considers using on-wing care to reduce engine downtime and costs from post-lease checks. - The proposed improvements include overhauling processes, implementing firm engine status categories, improving fleet management, and gaining approval for changes from key stakeholders. The goal is to enhance service levels and maximize revenue from the lease engine pool.
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Lease strategy project (lem)
- 1. Technical Support andOperationsRolls-Royce Lease Engine Pool Improvement Strategy Michael Davies April 2005
- 2. Technical Support andOperationsRolls-Royce Mission • To provide a world class spare engine service that meets our customers requirements (for standard, condition and timeliness), without exception.
- 3. Technical Support andOperationsRolls-Royce Engine leasing FRONT DESK LED Rates STOBL Transport Insurance Deposit Lease offer Lease request Eng dispatch Serviceable engines Requirements document (CRD) Customer
- 4. Technical Support andOperations Off wing management Secure storage Lease team Fleet Ops OH Support Campaigns SV Workscopes Slots OWC/SM Post lease checkLease Eng Data Set Aft Business MEAROS Policy Process Line main Config IP Fleet planning Pool sizing
- 5. Technical Support andOperationsRolls-Royce 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 StrategyBaseline
- 6. Technical Support andOperationsRolls-Royce 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" TargetsLinkCapability Improvement planning (2)
- 7. Technical Support andOperationsRolls-Royce 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 RRCorp Process Excel BenchmarkMeasurement Improvement planning (3)
- 8. Technical Support andOperations 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 Activities Improvement planning (4)
- 9. Technical Support andOperationsRolls-Royce Improvement programme
- 10. Technical Support andOperations DMAIC (M)easure Pareto of negative responses (out of 15) 0 2 4 6 8 10 12 Delivereytimeliness AllDatacompleted Otherinspectionsrequired Customerrequirements Sufficientdetail NMSBcompleteandaccurate Fullycertified Unacceptableshortages Modstandard(config)correct Correctformatsused ADlistcompleteandaccurate Shortage/missingformcorrect Deliveredontimetopromise Engineratingcorrect Enginemadeserviceable(RR) Customerrequirementschange Delivereyconditionagreed Othernonconformance Changestoshippinginfo Conditionofengine Leasetermsacceptable RR/OWCmetexpectations Accurate Repeatboroscopeneeded Allresponsibilitiesdischarged FSOassistedpart2pack Toldaboutnon-conformance Leaseoffercorrect Deliveredtocorrectlocation Margincorrect Question Numberofnegativeresponses 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00% Number of responses Cumulative percentage
- 11. Technical Support andOperationsRolls-Royce 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
- 12. Technical Support andOperationsRolls-Royce 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”
- 13. Technical Support andOperationsRolls-Royce 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 ComptonProcess 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 MarDef
- 14. Technical Support andOperationsRolls-Royce 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!!!
- 15. Technical Support andOperationsRolls-Royce 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
- 16. Technical Support andOperationsRolls-Royce 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
- 17. Technical Support andOperationsRolls-Royce 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.
- 18. Technical Support andOperationsRolls-Royce 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
- 19. Technical Support andOperations The End