INTRODUCTION
The success and sustainability of an aviation services business hinges on its ability to be organizationally effective. With numerous departments and teams in play, effective management of roles and responsibilities is vital to ensure smooth operations in passenger services.
Organizational effectiveness encompasses the ability of an organization to achieve its goals and objectives in a streamlined and efficient manner. For aviation services groups, this means providing safe and reliable services that are both cost-effective and profitable.
THE CHALLENGE
Our Client is a market leader in providing customised ground handling services, including passenger services, ramp operations, baggage and cargo handling, flight control, load planning and crew care. With over half a decade of experience at airports, the Group serves over 60 international passenger and cargo airlines.
As a key step to realise its vision of transforming the business from a traditional ground handling service company to a modernised resource management company serving the aviation industry, the Client kicked-off a transformation program, aiming to improve its reliability, efficiency, and profitability. They had made considerable progress during the first phase.
Renoir was brought in to explore further improvement opportunities when the Covid-19 crisis struck during the Analysis phase. Senior management became aware of the necessity of expediting the transformation. They launched the second phase of the program and engaged Renoir to facilitate and accelerate the change process. The expanded project kicked off to further transform the operation and prepare for the recovery.
PROJECT APPROACH & OPPORTUNITY ANALYSIS
This project had two major stages, the first being the development and implementation stage, covering integrated operations and organisation design. The second stage covered sustainability and adoption of the changes made in the organistion.
Firstly, the focus for integrated operations was as follows:
- Develop and implement an improved IOC-centric PDCA cycle
- Upgrade and rollout one single cohesive MCS (KPIs, Dashboards, Shift/Daily/Weekly/Monthly Performance Reviews) across the organisation
- Integrate all functional areas
- Rationalise Engagement, Duration and Task Efficiency Standards
Secondly, the focus for organisation design was as follows:
- Macro Level Organisation Assessment (Span of Control, Layering, Responsibilities, Accountabilities)
- Micro Level Organisation Assessment (Workload assessment, Man-loading)
- Design and Development of the “To Be” Organisation Structure, including KPIs
- Implementation Framework Planning and a realisation plan
The second stage of the project is the Sustainability Phase, the major focus being further sustaining the result of integrated operation and organisation readiness and adding a commercial workstream to facilitate the development of costing and margin management tools.
The focus of this Stage included:
- Sustainability facilitation of the Management Control System, including MES, new Productivity Index and performance review structure
- Drive realisation of targeted cost-to-serve and a standard product offering tool
- Analysis, planning and implementation of the office space rationalisation project
- Modelling framework, scenario analysis and implementation planning of contract standardisation, and the rationalisation of Part time/Full time resources
IMPLEMENTATION
The Client teams and Renoir worked hand in hand together designing and implementing a series of improvement initiatives with the spotlight mainly on efficiency, reliability and profitability.
With regards to Efficiency, we established a Minimum Engagement Standard (MES) across all the operational areas, which achieved significant efficiency improvements in all operation functions. The Client’s monthly overall performance index improved by 17.9% MoM.
The entire Macro and Micro organisations were redesigned in all areas after simulating operational rosters to determine headcount requirements, which resulted in a 29% headcount reduction.
We established more efficient processes and management control tools with dashboards, driving increased ownership and accountability at both the GM and FM levels, centralised rostering processes and improvement of the skills matrix and cross training approach.
Regarding Reliability, we restructured the organisation design with newly designed roles, particularly focussing on single source of ownership across the organisation, new key account management roles and accountabilities, all of which assisted in improving customer service and satisfaction.
Lastly, with regards to Profitability, we implemented a fully automated cost to serve tool for the frequent and systematic margin management for existing airline customers. We also refined the Standard Product offering tool to allow for timely calculation and customisation of resources provided and add-on services.
KEY RESULTS
Working with the Client, Renoir achieved the following results at the end of the project:
38%
Improvement in company overall PI (Productivity Index)
24.1%
Efficiency improvements: Baggage services
21.5%
Efficiency improvements: Ramp services
19.4%
Efficiency improvements: Flight control
16.8%
Efficiency improvements: Cargo services
4.9%
Efficiency improvements: Passenger services
Realisation of re-designed organisation structure
CONCLUSION
The improvements in organisational effectiveness prepared the Client for the post-Covid aviation industry recovery through leaner engagement standards and more efficient processes for serving customers. Together we successfully managed to build up the capability of operations around leaner resources and right-size operational resources in line with expected volumes, all whilst the new organisation design delivered a headcount reduction of 29%. Senior management successfully shifted its focus to a resource management mindset, sustainably balancing the needs of both customers and the Client.
