The work took only eight months and cost less than $1 million.
UT professor Mandyam Srinivasan, together with Warner Robins Air Logistics Center in Georgia and software provider Realization Technologies Inc., won the competition that's been called the "Super Bowl" of business operations research and management sciences. Five finalists competed for the top prize, which was awarded May 1.
Srinivasan, the Ball Corp. Distinguished Professor of Business, is an internationally renowned expert in Lean Management and Theory of Constraints. He is a core member of the UT College of Business Administration's executive MBA and Lean Enterprise faculty.
Warner Robins Air Logistics Center is a primary U.S. Air Force maintenance and repair facility for the C-5, C-17 and C-130 transport planes and the F-15 fighter jet. The C-5 is the largest transport plane flying, but it is an aging, out-of-production aircraft, according to the team.
Before UT became involved in Warner Robins' operation, C-5 repairs took an average of 240 days and the facility had up to 13 C-5s - or more than 10 percent of the fleet - under repair at one time. Because a C-5 can generate at least $40,000 in daily revenue by transporting goods for the various branches of the military, more than $500,000 of potential income was tied up per day by planes under repair in the facility.
Warner Robins was under significant pressure from the U.S. military to reduce maintenance turnaround time and get more planes flying.
Bill Best, deputy director of an aircraft maintenance group at Warner Robins and graduate of UT's Aerospace MBA program, partnered with Srinivasan to meet the challenge. As part of his Aerospace MBA program, Best had worked with Srinivasan to significantly cut costs in another area of the center and realized the potential of applying a business tool called Critical Chain Project Management to the C-5 project.
Critical Chain Project Management helps facilities analyze processes and use resources more efficiently. Realization Technologies Inc. is the provider of Concerto, a well-known software for implementing Critical Chain Project Management.
By implementing this business practice, Warner Robins was able to reduce C-5 turnaround time to 160 days and the average number of C-5s under repair from 13 planes to seven.
Annual revenue and cost savings implications from this program have been enormous, the group's data show. Having five additional planes operational at a time generates an estimated $49.8 million annually. The cost for replacing the capacity of five C-5s, should that have been necessary, would have been about $2.37 billion.
Also, because of the extra workforce capacity generated through these efficiency improvements, Warner Robins is expected to bring in additional revenue of $119 million through 2008 and $248 million through 2009. By having fewer C-5s under repair in the facility, 11 dock spaces are now available for other work. Had the center opted to build 11 new dock spaces the cost would have been about $220 million.
Ken Percell, the senior-most civilian at Warner Robins noted during the awards ceremony, "There is another key consequence that we measure not in dollars, but in human lives. The five C-5s returned to the Air Force will immediately reduce dangerous convoy operations in combat areas, saving uncounted lives that might have been lost in these dangerous operations."
Srinivasan said reducing the number of aircraft in the repair facility also means there is less competition for limited resources. Repair teams are able to focus on fewer jets at one time, and maintenance quality has improved.
With the C-5 success under its belt, Warner Robins is implementing Critical Chain Project Management on the C-130s to reduce its work-in-process from 24 aircraft down to 15.