With $7.2M In Savings, Carrier Plans To Use Efficiency Process Company-Wide

Later this year, Atlantic Southeast Airlines (ASA) will dive deeper into the Six Sigma management philosophy than any other regional airline, and even deeper than most major airlines.

More than two years ago, Atlantic Southeast embraced Six Sigma, which General Electric [GE] heavily promotes to its clients. It now has 54 active or completed Six Sigma projects, which have already saved the airline more than $7.2 million. In the coming months, Atlantic Southeast will create what in essence will be the "Office of Six Sigma" to be staffed by a five-man team of experts.

"We are going to have a corporate-wide initiative to bring the entire company into Six Sigma," said Bryan LaBrecque, the carrier's senior vice president of ground operations and an early Six Sigma proponent.

Six Sigma is a statistical-based, decision-making process. LaBrecque said it is a very methodical approach that relies heavily on detailed fact and data analysis. While the process began nearly 20 years ago as a tool to improve production efficiencies, it has now advanced as a tool to examine any process in the corporate world. "It has become a way of life in certain companies and impacts how you assess everything you do," he said.

Six Sigma borrows two terms from the martial arts - green belt and black belt. A green belt is someone who has been trained in the language and the analytical tools of Six Sigma and has directed at least one project. A black belt has directed a number of projects and has completed advanced training. A black belt has the background to train a new class of green belts.

Currently, Atlantic Southeast has about 35 green belts, said Anthony DiNota, a vice president of maintenance and engineering. Already a green belt, DiNota is working on his black belt certification.

Both DiNota and LaBrecque were trained in Six Sigma while working at Delta Air Lines [DAL], ASA's parent.

As part of the corporate-wide rollout, LaBrecque said all of the company's vice presidents will participate in a modified green belt training program "so they can speak the language." In addition, all key managers will go through the green belt training program.

The new team will be composed of green belts, and possibly black belts.

Atlantic Southeast started the Six Sigma program because GE consultants suggested it could help resolve maintenance problems. While Motorola [MOT] developed the Six Sigma process, GE under former CEO Jack Welch has been promoting the system heavily. It provides the services of its black belts at no charge as a value-added benefit to GE clients. Atlantic Southeast powers its 112 Bombardier [BBD] regional jets with GE engines.

GE currently provides one black belt to shepherd the Atlantic Southeast's projects. "We have had as many as two black belts. They would like to wean that person off in the next six months," LaBrecque added.

While GE does not charge for its services, it does have access to all the data ASA collects throughout the Six Sigma projects. Data collected on projects related to the GE turbines has been useful to GE to make improvements to its products.

"In any organization there are always people who are eager to solve problems," DiNota said. "Before getting underway with Six Sigma at ASA, we had some very good problem- solvers and some who needed a little help. One of the things we wanted to do was set up a standard on how we solve problems. We all need to speak the same language - the language is math and the process is Six Sigma."

Using Six Sigma does not stifle creativity, said David Silverstein, a Six Sigma consultant and president of Breakthrough Management Group, of Boulder, Colo. "Six Sigma's purpose is to identify problems and creative solutions are still called for. "There are no drawbacks to the process - a lot of challenges, but no drawbacks. It is a very top-down driven approach. If you don't have a strong leadership commitment and involvement, you won't see the results. Six Sigma focuses on dollars - that keeps the company leadership engaged. The roles of the CEO on down are well defined," Silverstein said.

Six Sigma was not introduced to ASA by CEO Skip Barnette, LaBrecque said, but Barnette endorsed the process early on. The Six Sigma project teams make monthly progress presentations to the carrier's leadership team. "Since they started, not one of us has missed a monthly report," he added.

Unlike earlier management tools, such as Total Quality Management (TQM), "Six Sigma is a culmination of all best practices," Silverstein said. "TQM was led by quality control people, but Six Sigma is led by operations people. For those driving it, Six Sigma becomes a full-time job and they are not putting out fires."

Six Sigma is an investment in people, Silverstein said. While the airline industry could benefit greatly from the program, the current climate dissuades many from accepting the philosophy. "In the U.S., Delta has dabbled with it while elsewhere Singapore Airlines [SIAL] and Thai Air have embraced it," he noted.

With the focus on cutting costs, Silverstein said airlines would be better served by employing Six Sigma techniques to increase sales and market share. "The greatest interest in my business is applying Six Sigma to sales," he said.

LaBrecque said Atlantic Southeast views Six Sigma as an investment it its employees.

"Our company is getting smarter everyday. It is as important as the cost savings. It will put us in position in the next 25 years to be so much farther along than we are today," he said. "When you spend time in a small company like this, you make decisions by the seat of your pants, gut-level decisions. For a young airline 25 years ago, that was not a bad thing. For a company with 131 planes, gut decisions become more risky. You try to fine-tune the decision-making process to mitigate the risk. As young company, we didn't have the skill level to mine the last bit of data in the decision-making process. We needed a tool to change people's mindset." And, that tool, ASA believes, is Six Sigma.

>>Contact: Bryan LaBrecque, Anthony DiNota, ASA, (404) 766-1400; David Silverstein, Breakthrough Management Group, (303) 619-9252.<<