Getting the best out of your operations control - part 1

"You can’t motivate people, but you can create an environment that encourages them to be motivated." In his article Getting the Best Out of People in the Workplace, Les Landes covers a number of key areas to achieve that goal. What applies to the workplace in general, surely applies to operations control.

This first post about 'getting the best out of your operations control' addresses the operations control processes. Les Landers points out that "if people don’t have clearly defined processes for the tasks that they’re expected to do, they are likely to struggle with how to carry out the tasks." What follows is how a high-level model for an integrated operations control. Such a model should apply for each process being monitored and steered, whether the airport can manage the process directly or not.

Let us take an example of the passenger flow, specifically passenger screening. Flight schedule, resource allocation, capacity information and standard processing times can be used to predict expected passengers and expected waiting times. In the best case, booked passenger numbers are available from the airlines (split by transfer and local passengers). During the day, planned information is automatically and dynamically updated with status changes, such as cancellations, delays, passenger number changes, gate changes, etc. which make the predictions more valuable. Automatically triggered warnings alert coordinators in operations control about potential bottlenecks (e.g. expected waiting times even with all lines open). Pro-active actions can be taken like delaying gate information to passengers and changing the gate. An actual waiting time at a passenger screening, automatically detected or manually reported, will trigger an alert and associated action. Such an action can be, obviously, to open more lines. Another action, maybe not that obvious, would be to first provide a list of flights which are currently being processed at security screening and which maybe become critical to complete boarding in time. Then, passengers of that flight can be directly addressed at the screening point. The analysis and reporting does not only cater for statistics. It should also analyse how well the prediction was, in order to adjust the algorithm. And provide feedback to planning and scheduling.

Now apply the same approach and technology to other processes.

Let's see what will be in part 2 of the series on how to get the best out your operations control. Maybe about Constructive Accountability?

Decisions should be based on efficiency and not on whether there is budget

Budgeting is at the heart of how nearly all large corporations are managed today. Therefore managers cannot be blamed if they don't care about costs as long as they stay within budget. At the same time we want to nurture entrepreneurial spirit and empower managers at all levels. Therefore, in addition to the traditional budgeting process, we may have to establish a more encompassing performance management addressing efficiency and productivity goals.

Let us look at two real live examples from airport operation of an airport with expected passenger and cargo growth:

Passenger Bus Operation: Based on expected passenger growth, there is budget to employ more staff this year.

Cargo Operation: The head of cargo operation has budget to expand the warehouse this year.

Both investments will not be ideal if the growth does actually not happen and if the growth only occurs during peak times.

Suppose we gave them efficiency targets, expressed as cost per Workload Unit (WLU). For the passenger bus operation the WLU would be number of passengers transported. For cargo operation it would be tons of cargo processed.

Now instead of following just the budget, the manager responsible for passenger buses manages his WLU cost by contracting drivers for buses from a transport company to cover the highest traffic peaks of the day. And the head of cargo operation defers an expansion because this would increase his WLU cost. He instead rents storage space in an external building until he has sufficient volume to keep his WLU costs on an acceptable level.

This approach provides growth-independent performance indicators, a simple and direct cost control and empowers managers to make entrepreneurial decisions. There may be some challenges to implement this model. Firstly, such a paradigm shift from budget control to efficiency targets creates resistance. On all levels. Secondly, the budgeting process will be more demanding because we will have a budget and WLU cost targets. Thirdly, it is important, but not easy, to choose correct WLU because they need to be relevant for the bottom line.

This model is not about getting rid of budgeting but about getting rid of the budgeting mindset. The potential benefits are extensive:

• It is a scalable approach to be used by all hierarchical levels. The higher the level, the more consolidated the view.
• Managers will start to manage differently. Before they make a decision with cost relevance, they will carefully assess the impact on your WLU costs, something they would not necessarily do with a budget.
• You breed entrepreneurs and it actually leads to a culture change.
• Managers will learn a lot about the composition of the costs of their work load units, because whenever the costs go up or down they have to find out the reason.
• Then, when they know where the big levers are, they’ll start to pull them to get a better correlation between production and costs.
• For the controllers it is much more simple to do their job. (if you ask a controller today, he will tell you that his function is, to make sure that the managers act like entrepreneurs).
• This is a self-regulating system: whatever happens to the production, the responsible manager will act immediately to stay within his work load unit cost targets.

There is an ACI Guide to Airport Performance available which contains a useful set of performance measures across a number of categories. It does not provide, however, guidance on the steps airports have to take to develop, implement, and refine their performance management systems.

One year after go-live of their Airport Management Center, Moscow Sheremetyevo is the best ACI ASQ airport in Europe. Coincidence?

Lasting success is not a result of coincidence. It's the result of focused hard work.

When Moscow's Sheremetyevo International Airport established their Airport Management Center by the end of 2011 they endeavoured to achieve these goals:

• To consolidate the coordination, monitoring and control of the different airport-wide spread operations control centres
• To effectively manage the airport across organisations
• To significantly shorten reaction times on irregularities
• To improve the capacity and act with standard operating procedures at hand to provide excellent customer service from end-to-end

We are very glad to have been part of the project with our technology and business expertise.

One year after their go-live, ACI names Sheremetyevo the best European airport in service quality. The Airport Service Quality (ASQ) is one of the most prestigious research programs on Airport Service Quality involving 250 airports in 50 countries.

Is this coincidence? Maybe they collaborate better than before, internally and externally. Maybe they act more like a business and more performance oriented. Maybe there are less friction-losses between processes and organisations.

In the end, what counts, are the results. And this award is outstanding because it comes from the end-customer, the passenger.

The 7 habits of highly effective punctuality management

As soon as an airport or an airline has a punctuality record month, they publish press releases, they celebrate. But how sustainable is such a short-time success? If you check their performance from then on, you may find them falling back to the levels before.

Can on-time performance be actively managed? If you think it can't be managed or can only be resolved by others, the following 7 habits may present a different perspective. If you already manage punctuality, you can assess where you are in your quest.

Habit	Characteristics
Accountability	There is a sufficient number of delay codes to differentiate delay causer Each delay code (with sub-code) has an owner or responsible organization The delay code assignment process is clear and in place (assign, accept, reject, handling of disputes, final call). Secondary delays are allocated to the original causer Delay cost is calculated and assigned to the causer
Transparency	Delay code assignment and on-time performance of every organization is transparent to everybody. Data quality is high Share performance with other airports
Standardization	Only one definition of delay codes and delays across the airport based on IATA standard, incorporated in the Airport Handling Manual (AHM) Any non-conformance e.g. different reporting from an airline to its head office will be brought forward to the Governance Forum
Governance and Benchmarking	Multi-stakeholder Airport Operations Control Center to manage the daily operational on-time performance and escalations Has a Punctuality Manager Punctuality Board, chaired by the Airport's Punctuality Manager, with delegates from handling agents and airlines proposes and tracks actions Punctuality targets are defined and broken down to each stakeholder Maybe an award/penalty pool for on-time performance Benchmark against other airports
System Integration	Delay codes and delays are captured or integrated into one 'global' system. That system should also allow to automatically track issues of a flight which could have caused the delay in case of disputes.
Communication/PR	Constant, effective communication among all stakeholders Maybe an award for the best punctuality improvement program
Empowerment	Agree on challenging yet achievable goals but leave it up to the partners to implement sustainable improvement Provide sufficient resources for punctuality management and improvement programs

Why it is counterproductive to let passengers know how long waiting lines are

People say that knowledge is power. The more knowledge, the more power. Suppose you knew the winning numbers for the lottery?  What would you do? You would run to the store and mark those numbers on the play card. And you would win.

Same for airports? Suppose you knew the waiting time at checkpoints like at Dulles International Airport. What would you do? Experience shows that when there is not much waiting time passengers tend to dwell and get to the checkpoint later. Which may create a problem later. It also shows that when there is long waiting time passengers tend to go to the checkpoint immediately. Which increases the problem now.

I think that airports should endeavor to steer the passengers indirectly based on the information they have. They may wait to announce gates until they see that there is capacity at checkpoints. They may change gates of arriving flights or bring passengers to other arrival halls.

Airport business is full of decisions and judgements and guesses, and also looking outside of the box.

The need for airport performance indicators

All businesses, whether in the public or private sector, need to measure and monitor their performance. The use of performance measures in the airport industry is particularly important because of the specific characteristics of airports. In a perfectly competitive environment, market forces will ensure that optimal performance can be equated with profitability. However, the conditions under which airports operate, are far from competitive. Regulatory, geographical, economic, social, and political constraints all hinder direct competition between airports. At the same time, the extent to which airports can attract other airports' traffic with different price levels or service levels is also very limited. Most airports therefore enjoy a quasi-monopolistic position and may abuse such a position by extracting high revenues from their customers. Profit may not equate with efficiency and productivity. Moreover, overall profitability is totally inadequate as a measure of the economic performance of discrete activity areas within an airport.

However, many airports still assess their performance by solely measuring profit or traffic growth. This in spite of a growing awareness by airport management of the financial and commercial implications of operating an airport.

Example: Sydney Airport Performance

 

Only a few airports have developed a systematic approach towards measuring performance. In general, there is no accepted industry practice for measuring airport performance. Additional indicators measuring the inputs and outputs in both physical and financial terms are essential.

In the coming weeks, we will explore more about how to measure an airport operation's efficiency and productivity. We will discuss performance indicators which serve as a management tool for the airports themselves. They are used to analyze and monitor past and present performance. Most importantly, they should make sure that management understands the financial mechanism of airport operation.

How can CDM help to get off the list of the 10 of the world's most hated airports?

Some of the international airports' reputation has been shaken with a world-leading news website ranking them as the most hated airports in the world. CNNGO.com published a report this week titled “10 of the world’s most hated airports”.

According to the journalist the most hated airports in the world are not the worst airports in the world. However, "the worst part may be this airport’s aura of indifference to it all."

Shouldn't Airport CDM also deal with passenger experience? Or, do we just hope that by exchanging information between stakeholders the performance and they way we deal with disruptions will improve automatically?

Who is afraid of EC Regulation 691/2010?

The EUROCONTROL Performance Review Commission (PRC) has been analyzing the performance of the European Air Traffic Management System since 1998. Initially, the focus was on en-route ATM performance. Some indicators from this framework were selected in 2010 for regular monitoring of operational airport ANS operational performance. Three of the flight efficiency indicators have been adopted as airport capacity indicators for Reference Period 1 (2012-2014) in the SES II performance scheme:

• Air Traffic Flow Management (ATFM) Arrival Delay
• Taxi-Out Additional Time
• Arrival Sequencing and Metering Area (ASMA) Additional Time
  

So this is all about ANS and EUROCONTROL.Why, despite delivering data to EUROCONTROL, should an Airport Operator bother about it? Well, it may fall back on them.

Let us take the Taxi-Out Additional Time as an example. The indicator measures the delta between the Actual Off-Block Time (AOBT) and the Actual Take-Off Time (ATOT). Now if you us airline data, they may report very long taxi times. Longer times than the Airport Operator. Why? Firstly, they may measure the AOBT differently because they use a different source than the airport, for instance ACARS. Secondly, since stations are evaluated against outbound delays, they will try to 'optimize' the AOBT to remain within the 15 minutes IATA threshold and report accordingly to their headquarters. You know what I mean.

Now here comes the problem. Whoever will get the blame (and potentially penalties) about long taxi times will have to demonstrate that it was not them causing it. As an Airport Operator, would you like to engage with the parties about this sort of questions when the performance regime has been implemented and the results have been published? Maybe the Airport Operator will already want to engage in the process to make sure that  questions about data quality, measuring standards, including reasons and impact of delays, is being addressed now.

Disney uses a command center to shorten lines at rides

Does this problem and approach somehow sound familiar?

According to an article in the New York Times, Disney has spent the last year outfitting the Disney Operational Command Center to address that most low-tech of problems, the wait. Located under Cinderella Castle, the new nerve center uses video cameras, computer programs, digital park maps and other high-tech tools to spot gridlock before it forms and deploy countermeasures.

In recent years, according to Disney research, the average Magic Kingdom visitor has had time for only 9 rides — out of more than 40 — because of lengthy waits and crowded walkways and restaurants. In the last few months, however, the operations center has managed to make enough nips and tucks to lift that average to 10.

So this April, when we (my family) are spending some of our holidays in Disney World I will not only look out for improvements but also ask whether I can visit their nerve center. Actually, I am going to ask right now.

Stay on top of the game

The Swiss Victor Röthlin won marathon gold on Swiss national day. His career seemed finished after a series of health problems, but he completely dominated the field of 65 men who competed in the 20th European Championships Marathon. This got me thinking about what it really takes to be a winner in business.

As I watched him run I realized that I, like so many others, had no clue of the training regimen required to compete at this level. Most people cannot imagine what it is like to train for a single race. Athletes at that level make it look easy. Sure, without talent they would never have made it that far. But talent alone is not enough. To be successful at anything, whether sport or business, requires a combination of talent, skill, and desire.

True success in business leads to high incomes, a flexible lifestyle, and the attainment of goals that most people only dream of. If you look around you, top business professionals make it look easy. But we can’t imagine the effort that top performers put into training. But top performers do. To be great in business we must invest in ourselves– mind, body, and spirit. We must train like an athlete. We must stay on top of our game.

How does this relate to Airport Operation? I’ve overheard operations managers describe the consistent high performance of top airports as “magical.” They can’t imagine the effort that top performers put into continuous improvement. They don’t understand that success in always paid for in advance. World class airport professionals listen and learn constantly. They strive for improvement potentials in their business constantly. The average and poor performers don’t have time to listen or to look for new answers, think that this is a waste of time. Or, they have more important issues to resolve right now. Some are only open for change when they are in trouble.

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Dashboards versus Scorecards

There have been ongoing discussions about the difference between scorecards and dashboards.

In the book Drive Business Performance the authors refer to Wayne Eckerson (Deploying Dashboards and Scorecards, July 2006) with a nice overview.

	Dashboard	Scorecard
Purpose	Measures performance	Charts progress
Users	Managers, staff	Executives, managers, staff
Updates	Real-time to right time	Periodic snapshots
Data	Events	Summaries
Top-level display	Charts and tables	Symbols and icons

Is it important to differentiate? Not really, both present a structured view of the goals and objectives for the organization. Key is to drive efficiency and help them focus on what matters.

Imported Airport Delays

Airports having a hub function are dependent on delays which are "imported" from other airports. An airport is to be considered an efficient airport when the departing flights are less delayed than the arriving flights. Compare your arrival punctuality with your departure punctuality and you have a first indicator on how efficient an airport is.

Note that airports without a hub function will perform better than hubs. They can compensate delays easier. But the operational efficiency is a good indicator for discussions where there is a general perception that delays are only "imported".

Baggage Delivery - A Crucial Element of the Travel Experience

Zurich Airport recently won the award for best airport baggage delivery in the 2010 Skytrax World Airport Awards. Skytrax Chairman, Mr Edward Plaisted said "The prompt delivery of customer's baggage is a crucial element of an enjoyable travel process, and Zurich Airport is clearly providing not only high standards of efficiency in this area, but most importantly doing so on a consistent basis."

I recall when we started to dive into that matter. We observed that airport and airlines cound not verify the service level though Zurich airport received a number of passenger complaints. When we asked the ground handlers, they would claim that their baggage delivery performance was brilliant. In fact, when we started to measure and monitor it, we discovered that out of 120 of 360 flights the bags were delivered too late.

Nowadays, the baggage delivery is monitored and the performance is visible to everybody. Passengers are informed at the carousel about the time when their bags should be delivered. The number of late deliveries went down from 120 to 10-15 per day. For the past two years, Zurich airport has not received any passenger complaint in this area anymore. Well, sometimes they receive complaints that it was delivered earlier than indicated on the information screen at the carousel ...

The importance of ETD

ETD is the date and time which an aircraft is expected to depart from an airport. It is also called expected time of departure or Estimated Off-Blocks Time (EOBT) in the 'airside world'.

Every flight has a Scheduled Time of Departure (STD), the date and time when an aircraft is planned to depart. All aircraft related processes (loading, catering, pax transport, boarding, push-back, ...) depend on that STD and plan their resources and equipment accordingly. Suppose there is a delay and no ETD is set. All related processes dispatch their resources wrongly. The STD time passes by and the push-back tractor is still waiting.

Who should set an ETD and when? In my opinion it should be the ground handler responsible for the flight. They should set an ETD as soon as they become aware of a potential delay. Which, in fact, could already be when an aircraft is arriving too late.

Obviously you can differentiate between a Staff ETD and a Public ETD to communicate expected delays more frequently to staff.

From a solo to symphony

Even frequent travelers cannot believe that the different organizations at an airport do not work together to provide one common "airport product" as part of their journey. For instance, when they have to wait for their bags at the bag carousel they would blame the lousy airport or maybe their airline. Insiders will tell them that it is a bit more complex and many parties are involved in processing a bag.

Now, should we educate passengers to better understand the complexity of an airport operation? Or, should we make sure that somebody is responsible for the overall quality and efficiency? And, who should that be? There are different models to handle the responsibility for the overall performance of an airport. The one that has not really worked is not to define it at all. Result is, problems are pushed around, there is a blame culture where anybody else is responsible and there are no action plans and unclear responsibilities in irregular situations.

I think that airport operators have a great opportunity to move from a landlord to a more active role driving operational performance. They can make sure that the solo played by individual organizations using their infrastructure becomes a symphony of great passenger experience.