A Bit of the Irish ‘Lean’

Shannon Aerospace is hardly alone in its goal to eliminate waste in aircraft maintenance. But it may well have taken the quest to a new level.

View Tom Caffrey’s business card on one side and it shows him to be "head of quality, training, safety and continuous improvement" at Shannon Aerospace (SAL). Flip the card over and it shows his title as "lean transformation leader." The title on the flip side holds a significant advantage for SAL. As the company’s point man in establishing a waste-free environment, as well as being chairman of the Lean Flight Initiative (LFI), Caffrey enjoys a certain prominence in the aircraft MRO arena.

He receives prompt attention from Boeing and Airbus, which are keenly interested Shannon’s efforts to be lean and in the information exchanged among the LFI’s around 800 members — airlines, industry and academic institutions — on how to more efficiently support their aircraft. And this attention can be handy when, for example, SAL makes queries about maintenance issues not found in the OEM manuals. When it comes to lean practices in MRO, Caffrey is a key individual to know.

However, his lean transformation leader title also denotes the importance SAL places on the elimination of waste in its heavy maintenance processes. Lean procedures are essential, according to deputy chief executive Pat Shine. "Because our labor costs have increased, we’ve had to strip waste from the process, while also securing the expected return for our shareholders and, most importantly, satisfying the needs of our customers." Perhaps typical from the land of Joyce and Yeats, Shine offers a literary analogy of what lean means to his company. "Lean helps you drain the river, so you can see the rocks that have always been there," he says, viewing the rocks as impediments. "You then can remove the rocks, so the river [or maintenance process] flows more freely."

A Sometimes Bumpy Road

Lean practices also are meant to help SAL sail on smoother economic waters, helping secure a steady, healthy MRO business. The company has encountered obstacles in the past, some faced by other independent MROs and some unique to Shannon Aerospace.

Three companies — Swissair, Lufthansa Technik and the leasing company, Guinnes Peat Aviation (GPA) — launched the Irish MRO in 1989 as a heavy airframe maintenance facility for narrowbody aircraft. The partners planned to take advantage of an educated workforce and the relative low cost of doing business in Ireland — due largely because 18 percent of the country’s workforce was jobless. Several factors, including economic and development incentives offered by an Irish government development agency to locate in the Shannon region, resulted southwestern Ireland being selected as the new MRO’s locale.

The three partners built a six-bay hangar for $113 million on a 110-acre field in what was called a "green field development." The hangar is Ireland’s largest enclosed structure at 345,000 square feet (32,000 square meters), and it is across Ireland’s longest runway from the Shannon Airport terminal. (The 10,496-foot [3,200-meter] runway was once used to train Concorde pilots.)

The hangar comprises four dedicated maintenance bays and one bay for stripping and painting. The paint bay adjoins another "combo bay" which can be used for either painting aircraft or performing light checks (less than C-checks) that typically take less than a week to complete. Push a button and in just 30 seconds a curtain drops down to separate the two bays, both of which are temperature and humidity controlled. Air in the two bays is recycled 2.5 times each hour.

With 600 employees, SAL opened for business in September 1992, taking in its first aircraft, a Lufthansa Boeing 737-200. The MRO initially specialized in the B737 and MD-80/DC-9 and later entered the widebody business, taking in the B757 and B767. In 1998 it also added airframe support of the Airbus A319, A320 and A321 to offset the declining MD80/DC-9 business. The MRO last worked on one of the former McDonnell Douglas (now Boeing) aircraft — an SAS MD-87 — in March.

SAL does not overhaul engines and avionics, though it does provide avionics modifications. It also has taken on large airframe modification projects, such as winglet and fuel tank installations. The three original partners were projected to supply at least a quarter of SAL’s business. However, that changed soon after the MRO’s launch, when the Gulf War adversely affected commercial aviation worldwide, and GPA could no longer guarantee providing its share of maintenance business to SAL. In 1995 the Irish government stepped in with a $22-million rescue plan, and Lufthansa and Swissair agreed to acquire GPA’s share of the business.

All Lufthansa

Eventually, Lufthansa Technik decided to deepen its roots in Shannon. It purchased Shannon Turbine Technologies in 1995 and transferred all of its B737 work to SAL in 1998. In late 2002, not long after Swissair’s collapse, it purchased a 50 percent share of SAL, making it the Irish MRO’s sole owner. Shannon Aerospace is now under the umbrella company, Lufthansa Technik Airmotive Ireland Holdings.

Lufthansa provides 35 to 45 percent of SAL’s business. "But that figure is trending downward because of two new Lufthansa Technik facilities," says Shine. In fact, SAL has helped its parent company set up a two-bay maintenance facility in Budapest, Hungary, (started in 2000) and is assisting in establishing another two-bay facility in Sofia, Bulgaria (founded in 2007).

Initially, SAL’s targeted markets were Europe, the Mideast and Africa, and indeed, it does have business from all three regions. "We have some African customers and get occasional work from the Middle East, for example, from Lotus Air in Egypt," says Shine. However, Lufthansa Technik’s two new facilities in east Europe, both for narrowbodies, will tap the Middle East and Eastern European business, leaving Western Europe as SAL’s core market. Major customers include Austrian Airlines, Air Malta, EasyJet, Spanair, British Midland and Croatia Airlines.

The Irish MRO’s work for North American carriers primarily involves line maintenance, which it provides solely at Shannon Airport. SAL routinely performs transit and daily checks conforming to ETOPS (extended-range twin-engine operational performance standards). Among its five line-maintenance customers are Delta, US Airways and Continental Airlines.

SAL also has overhauled 757s and 767s for U.S. carriers. But Shine admits the weak dollar makes attracting business from across the Atlantic difficult. The deputy chief executive recognizes that SAL must find more third-party work to make up for the Lufthansa load that will be routed through Budapest and Sofia, but he insists his company, which has been financially self-sufficient since 1995, doesn’t compete with the new MROs. "We operated within a network," he says. "Workload can be transferred between facilities to meet our customers’ requirements."

Shannon Aerospace has had its economic ups-and-downs and it still faces obstacles, according to Shine. "In addition to big events [such as GPA’s near collapse] we have had to deal with the extension of check intervals," he says. "For example, with the A320 we expected to do intermediate checks every five years; now that’s been extended to six years, and the D-checks have been extended from 10 years to 12 years.

"We’re geared to heavy maintenance and this facility needs volume," Shine says. And the extension of check intervals can adversely affect volume.

Shine also believes 2009 will be a challenging year. "We expect aircraft will be parked because of the worldwide economic downturn," he says.

Looking to Lean

Nevertheless, SAL has enjoyed growth. It completed 22 percent more maintenance checks during its 2007/08 winter season (the time of year most checks are performed) over the 2005/06 season, according to Shine. The MRO’s workforce now numbers 760, of which 440 are technicians and 200 are support and management. The remaining workers are trainees. Its labor costs have increased — Ireland no longer is the land of low labor costs — but the company feels confident that it can draw sufficient business to keep its maintenance bays full. Shine projects $92.5 million in revenue this year and as much as $117.5 million annually within four to five years.

Confidence in SAL’s growth rests in part on its approval in 2004 to work on the 737NG, adding another airframe to its maintenance repertoire. But equal amount of assurance rests in its goal of cutting waste. "We look to lean to help us deliver volume," says Shine. The company’s goal is to achieve a 30 percent increase in productivity and a 30 percent reduction in aircraft ground time, resulting in a 30 percent increase in the number of checks the company can provide its customers.

Adopting the lean disciplines in the Toyota Production System (TPS), Shannon Aerospace implemented a "pulse line" process that has the aircraft advance through three bays, comparable to an assembly line. Along the way standardized maintenance procedures, or pulses, are completed.

The key word is "standardized." SAL has succeeded in reducing the length of its D-checks on Airbus aircraft from 30 days to 22 days. "We did this the first time in May on a Lufthansa A321," says Shine. "But the challenge is to do it not just once, but to sustain that schedule."

"Here’s the problem," he adds. "Fifty percent of heavy maintenance is routine and highly predictable, and 30 percent of the issues we face are highly probable, which we can plan on. It’s the 20 percent in which you don’t know what to expect that affects consistency. Finding a process to deal with that 20 percent is essential."

Removing waste from the maintenance process and standardizing procedures "takes a long time," Shine concedes. But he believes the effort must be made and predicts a demand for ever-faster turnaround times. "I would say that within the next five years, we will have to provide 14-day D-checks," he says.

SAL has applied the pulse-line process to the Airbus models and is about to apply it to the B737. Work on the 757 and 767 will remain in a single bay, outside the pulse line. "Hangar geography doesn’t allow the movement of those aircraft," says Caffrey.

"The 737 pulse line needs extra preparation and more staff," he adds. Preparing a pulse line requires mapping out the maintenance process step-by-step, component-by-component to determine where waste can be eliminated and how each process can be standardized. Because this process is arduous, SAL plans to hold steady the number of heavy checks it will perform in 2009 over this year (about 70) and instead focus on making its pulse-line program as undeviating as possible and applied to the B737. In other words, 2009 will be a year of clearing more rocks from the river.

Pulse Line Tour

Hangar manager John Mahon provided AM with a tour of SAL’s pulse line. We began at bay one, where an aircraft enters every Wednesday. Here a crew removes engines, interior fixtures and all other components, except for the landing gear, which must remain installed so the aircraft can be moved to bay two. Parts are tested and sent to shops for repair or overhaul. This completes pulse one. A single pulse takes 2.5 days to complete.

On the following Monday, the aircraft is in bay two where a separate crew removes the landing gear; defects are rectified; sheet-metal work is completed; modifications are made to the customer’s specification; and the repaired landing gear is reinstalled. By the second Friday, pulses two and three are complete.

On the second Monday, the aircraft is in bay three, set for pulse four, reassembling the aircraft. The same crew that disassembled the aircraft moves from bay one to bay three to put it back together. Three days later, the aircraft goes to the paint bay for pulse five. If its paint bays are occupied, SAL can send an aircraft across the airport to sister company Lufthansa Technik Painting Shannon, which was launched in 1999.

Pulse six, final testing and handoff to the customer takes place on SAL’s apron on the third Wednesday after the aircraft’s visit. "With the lean/pulse process, we’ve taken the strip and painting process from fifteen 12-hour shifts down to nine 12-hour shifts," says Mahon. D-checks for Boeing aircraft, in bay four, outside the pulse line, generally take about a month to complete. Ideally, all pulse-line work is done within five-day-a-week shifts. However, Shannon Aerospace’s pulse line schedule includes two weekends that serve as buffers, in case unforeseen issues crop up. Work on the weekends assures the deadline for handing over the aircraft is met.

Rib 5, where the main landing gear joins the wing, on the A320, caused the biggest disruption to Shannon Aerospace’s pulse line. More than once, the pulse line was held at a standstill because the landing gear was removed and Airbus technicians had to be flown to Shannon to inspect and repair the rib — a costly process.

The SAL team was convinced there was a better solution, and they worked collaboratively with Airbus to find one. "We mapped the process [of inspecting the Rib 5] through lean and found why the anomalies occurred," says Caffrey. "With more details, Airbus revised its inspection techniques and found they no longer had to replace the expensive ribs.

"The pulse line created a tension that helped us come up with a solution that we would not have found if the aircraft remained in a static-bay environment," Caffrey adds. "We haven’t had a Rib 5 issue since."

Back Shops

When SAL adopted the pulse-line system and converted space into the combo bay, it increased its capacity. This, in turn, augmented the volume of back-shop work, which SAL performs on crew seats, galleys, lavatories, panels, floors, trim, doors, flight controls, air stairs and mechanical components. To deal with the increased volume of work, the company constructed a new building in 1999. It houses a spacious seat shop to accompany its upholstery shop, plus a composites repair area that includes a sealed-off sanding room and a clean room for prepreg repairs. It also houses a nondestructive testing (NDT) shop that can perform all procedures specified by Airbus and Boeing, including liquid penetrate, eddy current, ultrasonics and radiography. In January 2007 SAL’s NDT shop was approved to conduct thermography testing, to detect moisture in composite materials. The elevators of A319, A320 and A321 aircraft must undergo thermography inspection, a test once covered under a service bulletin and now added by Airbus to the maintenance planning document.

All shops have point-of-use tooling, so technicians don’t waste time walking to tool cribs. As in many repair facilities, SAL’s workshops have floor markings to maintain organization. But instead of painting the markings, SAL personnel uses colored tape, which can easily be removed. "We do this in order to be flexible," says Mahon. "We may find there are better ways to organize the process."

Prominent in the sheet metal shop is another Shannon Aerospace innovation: a mobile bulletin board that includes records of parts, including when they were removed, when they must be completed, etc. They also include colored dots to show a part’s progress. A green dot indicates that the part’s repair or replacement is on schedule. However, a red dot denotes a snag in the process (defect not in the manual, materials needed, etc.), and it quickly gets the attention of the lead engineer or shop manager, who takes immediate action to eliminate the snag.

By applying lean processes to its back shops, SAL was able to free up a room conveniently located behind pulse-line bays one and two and now used for parts storage. "We used to remove parts and then just store them around the airplane," says Mahon. "Now we keep that area uncluttered by storing the parts in spare space until the aircraft’s reassembly."

On the opposite end of the hangar from its new back shop facility is another new structure in which SAL officials take great pride. "We’ve created a lounge for the people picking up the aircraft," says Caffrey. "Rather than have them roam around the hanger, they’re provided a bizjet-FBO-type lounge with plasma-screen satellite TV, coffee, tea and hot croissants." People picking up their aircraft also can log onto a wireless network with their laptops; they are given a password and can access information about their aircraft.

IT Upgrade

Keeping pace with SAL’s innovations in the maintenance process are improvements in its information technology (IT). It recently contracted Dell to update its servers and computer terminals, and Massachusetts-based EMC to revamp its storage area network. SAL’s core system is the SAP R3 legacy system, also called SAP ERP (enterprise resource planning). The client-server software performs an array of functions — including human resources and management of supply chain, materials, production and quality. In its human resource role, the system records the time an employee swipes his ID card when he enters and leaves the facility. When a technician scans both his ID card and a job card, the software records a maintenance activity’s progress. This information is automatically used for billing, showing the customer exactly what work was completed.

SAL also uses the SAP R3 to convert the master data for a particular airplane into project data (including customer requests, advisories, etc.), creating a maintenance blueprint for the technicians on the floor. SAP R2 was introduced by German-based SAP AG in 1992 and upgraded to SAP R3 in 1999. Now its support is about to expire, so Shannon Aerospace plans an upgrade to SAP’s ECC6 system in 2009.

"As we change our [maintenance] processes, we need to change our system," says Ray Wallace, SAL’s head of information systems. The ECC6 system already serves Lufthansa’s Budapest facility and is being implemented in Sofia and Malta.

The 2009 upgrade also will include replacing Shannon Aerospace’s JETS job-card entry transaction system with the manage-m system, developed by Lufthansa Technik. Seeing advantages in the JETS system, however, Lufthansa Technik may decide to incorporate its features in manage-m and make the hybrid system standard at its facilities, according to Wallace.

SAL is not yet set up to allow all customers remote online access to an up-to-the-minute progress report of their aircraft’s repair. Such information is available to customers but provided by the marketing department, electronically or over the phone. SAL makes completed documents such as job cards and invoices available electronically, on a CD and in document form. "We are looking at an [online access] service and may include it after we’ve completed our software upgrade next year," says Wallace. However, SAL does have a data transfer service in which the SAP R3 provides real-time information. As a result, one customer, SAS, came to the company with their own servers and could transfer timely information back to Stockholm.

A Lean Leader

SAL’s intention on being lean cannot be overstated. In March, Ken Kreafle, general manager of Toyota Motor Manufacturing USA, visited Shannon and said he was "impressed with how the Shannon Aerospace operations has so quickly embraced [the TPS] principles." SAL also hosted the third LFI Conference this year, attended by Air Canada, KLM, Lufthansa and Northwest Airlines, among others in commercial aviation. Tom Caffrey served as conference chairman.

Caffrey has visited and worked with Airbus’ Lean Learning Academy. And Shannon also has hosted "Kaizen blitzes," workshops focusing a particular maintenance procedure.

Shannon Aerospace also has set up ambitious goals that demand more waste elimination. For example, says Shine, "We aim to have all inspections on an airplane done in two and a half days."

But that will require still more rocks removed from the river.