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Sunday, May 1, 2005

Bombardier: Finding the Right Formula for Customer Service

Joy Finnegan, Managing Editor

Growth in the business jet industry has outpaced Bombardier's ability to keep up with a high level of customer support, but a dedicated executive team aims to crank up the quality in the Bombardier service arena.

With the second largest fleet of business jets in the industry, Flexjet celebrating its 10-year anniversary, and an explosion in the charter business, Bombardier has admitted losing the winning formula for customer support but vows to rectify that quickly. "In the last year-plus we've been doing a lot. We are looking for the winning formula," said David Orcutt, vice president customer support. "We were ranked high for nine years. We mis-stepped. We know the steps, now we are looking for the formula."

The top executives in customer services at Bombardier include Orcutt, Troy Jonas, vice president and general manager, service centers, and Desmond Bell, vice president, parts logistics. This enthusiastic trio is implementing changes in many areas and seems intent on cutting through the bureaucracy and ensuring that customers receive the service and support they need. "We've heard one thing loud and clear. We have the right people with the right attitude, and that is backed up by the customer day in and day out," said Orcutt. "Now I've told my people, ask yourself what would you do? And we've empowered people to make those decisions."

Orcutt stressed that communication is a key to their efforts both internally and with customers. "Communication is very important to this process," he said, "and we meet weekly on a senior level." In addition he said the company has implemented techniques to help the executive level management keep attuned to the status of aircraft. "We all wear text pagers. The whole organization is becoming harmonized to act together," said Orcutt. The team is also implementing status boards similar to those used by Raytheon Aircraft (See AM cover story December 2004). "We have whiteboards with what aircraft are down and the status. We are getting electronic boards in a month," he said. "Peter Edwards [president Bombardier Business Aircraft] will have one right outside his office. It will have a running clock with updates. If we don't see closure, we will start pushing."

Aircraft on ground

The company initiated an AOG program to help prioritize which aircraft needed attention first. A situation is labeled a Code 1 if the aircraft comes in AOG and the principal is impacted. If through the normal support efforts the aircraft can't make a trip that will impact the principal, Bombardier will charter an aircraft. "We have access to many aircraft at Flexjet, Air Net, and Sky Jet Charter for the purpose of moving parts, moving people, and for interim transportation," said Orcutt. "That's powerful." As an example he told of a recently AOG Global Express. The principal was about to depart from Zurich to St. Kitts, and the aircraft had a problem. "We had a backup charter so the principal literally walked from his aircraft to the charter and made the trip. From a parts perspective, through the successes of Des's [Desmond Bell's] organization, that happens less and less."

Externally the company counts on customer feedback to back up data and verify performance. The company is looking at different ways to keep the lines of communication open with Bombardier operators. "We have 20 to 40 operators in Montreal at a time," said Orcutt. "We have a weekly informal breakfast. This allows for interaction with the customers. We find out what their concerns are. This is a good health check for us."

Bombardier is using different measuring sticks to evaluate how the customer is perceiving the changes. "Anybody can make the data sing, so we looked at the feedback and are aligning the two," said Orcutt. "When we looked into what the customers were saying compared to our data, we found a loophole in some areas. Is it possible to have 100-percent happy? No. But we don't want to use one measuring stick. We want to back it up. We can't focus on raw data because it can be misleading."

Another area the company is changing is capacity. "With a fleet of 3,200 aircraft flying daily, we have our share of issues," Orcutt said and added, "we have six to eight aircraft AOG a day." Currently the company is actively recruiting technicians to add to the 1,000 technicians already on board. Bombardier has hired more than 100 technicians over the last year and plans to hire an additional 90-plus mechanics in the next several months. Orcutt also extended hours in the field service department and plans to increase the number of field service representatives, adding three in North America and one in Russia before the year's end. Troy Jonas, with the company since 1998, is head of all service centers. One of the first things Jonas did when he was elevated to that position was to add 24/7 shift coverage. "The market had questions about our strategies about the service centers," he said. "We introduced 15 new aircraft in 15 years. The infrastructure didn't keep pace with that growth, but progress has been made. We are increasing capacity. The company recently added three facilities to the business jet service roster, Clarksburg, West Virginia, Teterboro, New Jersey, and Addison, Texas. Teterboro and Addison had been Flexjet service centers but were recently reestablished to service retail business jet traffic as well, while Clarksburg was focused on regional jets and some Flexjet work. "Operators want choices," said Orcutt.

"We plan to expand to the West Coast, we have a bit of a gap out there," Jonas added. The additional service centers, in conjunction with Bombardier's authorized service facilities, offer broader choices for operators. In addition, the Bombardier team is challenging the authorized service facilities to improve. "We are asking our ASFs to strengthen their parts inventory," he said. "AOG-critical parts need to be closer to the customer."

Central training

Jonas also emphasized Bombardier's commitment to training. "We are investing heavily in training," he said, "with a focus on customer service training. To give you an idea of the commitment to training, we have 159 technicians trained on the Challenger 300 and there will be 15 more by mid-March. We are also increasing the depth of troubleshooting capabilities, which is an area that pays dividends for us."

Both Orcutt and Jonas said the company has looked closer at the relationship-building skills of new hires and current employees. "If we have two people with the same technical background but one has good soft skills, we will lean to that more than the technical skills," said Orcutt. "It's an attitude. It's extremely important to us. We've looked at that very hard, making sure the can-do attitude is there."

Profitable parts

Parts logistics has also taken a close look at how the market has changed, especially after acknowledging that facet of the business is a significant contributor to revenue and margins. Five to ten years ago there was a significant difference in inventory level at the operator. Today, operators don't want to have to carry extensive inventory. "Spares availability is critical," said Orcutt. "From a customer standpoint, operators don't carry spares. They are doing that less and less and are more reliant on the OEM."

Desmond Bell, who began his career with Short Brothers and is a Six Sigma productivity guru, believes that the company has turned the parts operation around in the last year. "We needed to transform how we managed our parts business," he said. "We made the decision to invest significantly in this aspect of the business." The company also streamlined the parts operation by closing parts centers in Wichita, Kansas and Detroit, Michigan.

To help improve and strengthen the parts operation, Bombardier made two important strategic alliances. First, the company partnered with Expeditors International, a global freight forwarder and second, Bombardier partnered with Caterpillar Logistics to establish two super parts warehouses, one in Chicago opening in the second quarter of 2005 and one in Frankfurt to open in the third quarter of 2005. These two alliances were made after much consideration and a realization that the company could not be all things to all people. "We heard loud and clear from our customers that they expect us to have parts available," said Bell. "We didn't have the depth and breadth of parts to support the customer. We changed the mix of inventory. We have made significant improvements in inventory accuracy." The company's net change in inventory mix exceeds $67 million over the last year, and forecasting has been improved as well.

Bell's group also plays a role in the new AOG program. "We have reduced order-to-delivery time for AOG parts to 12 hours and better in some cases," Bell stated. That is half the industry standard, according to Bombardier. "We're not going to stop at 12 hours. We will continue to raise the bar on that. I expect to go to 10 or even shorter," he added. Parts availability is key to customer satisfaction in the support arena. According to Bell, none of the OEMs measure performance of this area in the same way. "Some measure only stocked parts, but Bombardier uses the most stringent way of measuring parts availability," he said. Availability is at an all-time high, with an off-the-shelf fill rate of 95 percent.

"As far as pricing goes, I am running a business that I want to grow. We look at competitive pricing. I want to be selling more parts and it's our intent not to raise prices in 2005," said Bell. The company has also made 8,500 price reductions on Global and Challenger parts.

"Being competitive is important to us," Orcutt added. "We'll match prices. What we won't do is we won't match a mom and pop shop that undercuts us."

The group again emphasized that they feel they have the right people in place, that there is still a lot of work to do, but that with the level of support they are receiving from the upper management all the way to chairman Pierre Beaudoin, a turnaround is imminent. "We think it's a sustained recovery in the bizjet market and we are building our business to reflect that," said Jonas.

"One problem we had is that we tried to be everything to everybody," Orcutt concluded. "Today we don't do that. In customer support, if there is something we aren't good at we try to find a partner to take it on. We had to learn the hard way that we aren't the best at everything. The biggest change in our DNA is being humble and knowing we can't be everything to the customer. Did we lose focus? Yes. But today we have strong support all the way to the chairman and we are regaining the winning formula. We do know how important this is to our core business."

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