Florida International University FIU Digital Commons FIU Electronic Theses and Dissertations University Graduate School 4-22-2011 A Theory of Constraints Service Systems Improvement Method: Case of the Airline Turnaround Problem Steven C. Ellis Florida International University, [email protected] Follow this and additional works at: http://digitalcommons.fiu.edu/etd Recommended Citation Ellis, Steven C., "A Theory of Constraints Service Systems Improvement Method: Case of the Airline Turnaround Problem" (2011). FIU Electronic Theses and Dissertations. Paper 404. http://digitalcommons.fiu.edu/etd/404 This work is brought to you for free and open access by the University Graduate School at FIU Digital Commons. It has been accepted for inclusion in FIU Electronic Theses and Dissertations by an authorized administrator of FIU Digital Commons. For more information, please contact [email protected]. FLORIDA INTERNATIONAL UNIVERSITY Miami, Florida A THEORY OF CONSTRAINTS SERVICE SYSTEMS IMPROVEMENT METHOD: CASE OF THE AIRLINE TURNAROUND PROBLEM A dissertation submitted in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY in INDUSTRIAL AND SYSTEMS ENGINEERING by Steven C. Ellis 2011 To: Dean Amir Mirmiran To: College of Engineering and Computing This dissertation, written by Steven C. Ellis, and entitled A Theory of Constraints Service Systems Improvement Method: Case of the Airline Turnaround Problem, having been approved with respect to style and intellectual content, is referred to you for judgment. We have read this dissertation and recommend that it be approved. _______________________________________ Chin-Sheng Chen _______________________________________ Shih-Ming Lee _______________________________________ Christos Koulamas _______________________________________ Ronald Giachetti, Major Professor Date of Defense: April 22, 2011 The dissertation of Steven C. Ellis is approved. _______________________________________ Dean Amir Mirmiran College of Engineering and Computing _______________________________________ Interim Dean Kevin O'Shea University Graduate School Florida International University, 2011 ii © Copyright 2011 by Steven C. Ellis All rights reserved. iii DEDICATION I dedicate this work to my family. Without their sacrifice, understanding, support, and most of all love, the completion of this work would not have been possible. iv ACKNOWLEDGMENTS I wish to thank the members of my committee for their support and patience as I labored to organize this work. Our associations have been rewarding both personally and professionally. I gratefully acknowledge Dr. Ron Giachetti for his support and advice, Marcelo Alvarado, Debra Vandermeer, and Monica Tremblay for the support and encouragement. Thanks to Mike Anderson at the Fort Lauderdale airport for the data and access to ramp operations to be able to complete the case study. I have found my coursework throughout the curriculum and instruction program to be stimulating and thoughtful, providing me with grist for the intellectual mill of ongoing process improvement; enough to last a lifetime of investigation and reflection. v ABSTRACT OF THE DISSERTATION A THEORY OF CONSTRAINTS SERVICE SYSTEMS IMPROVEMENT METHOD: CASE OF THE AIRLINE TURNAROUND PROBLEM by Steven C. Ellis Florida International University, 2011 Miami, Florida Professor Ronald Giachetti, Major Professor This dissertation develops a process improvement method for service operations based on the Theory of Constraints (TOC), a management philosophy that has been shown to be effective in manufacturing for decreasing WIP and improving throughput. While TOC has enjoyed much attention and success in the manufacturing arena, its application to services in general has been limited. The contribution to industry and knowledge is a method for improving global performance measures based on TOC principles. The method proposed in this dissertation will be tested using discrete event simulation based on the scenario of the service factory of airline turnaround operations. To evaluate the method, a simulation model of aircraft turn operations of a U.S. based carrier was made and validated using actual data from airline operations. The model was then adjusted to reflect an application of the Theory of Constraints for determining how to deploy the scarce resource of ramp workers. The results indicate that, given slight modifications to TOC terminology and the development of a method for constraint identification, the Theory of Constraints can be applied with success to services. Bottlenecks in services must be defined as those processes for which the process rates vi and amount of work remaining are such that completing the process will not be possible without an increase in the process rate. The bottleneck ratio is used to determine to what degree a process is a constraint. Simulation results also suggest that redefining performance measures to reflect a global business perspective of reducing costs related to specific flights versus the operational local optimum approach of turning all aircraft quickly results in significant savings to the company. Savings to the annual operating costs of the airline were simulated to equal 30% of possible current expenses for misconnecting passengers with a modest increase in utilization of the workers through a more efficient heuristic of deploying them to the highest priority tasks. This dissertation contributes to the literature on service operations by describing a dynamic, adaptive dispatch approach to manage service factory operations similar to airline turnaround operations using the management philosophy of the Theory of Constraints. vii TABLE OF CONTENTS CHAPTER PAGE 1 INTRODUCTION…………………………………………………………………. 1 Background/Personal Motivation………………………………………………….. 1 The Focus of the Theory of Constraints…………………………………………… 4 Contribution and Significance…………………………………………………….. 8 Research Method………………………………………………………………….. 10 Organization………………………………………………………………………. 12 2 LITERATURE REVIEW…………………………………………………………. 13 The Theory of Constraints………………………………………………………… 13 Research on Turnaround Operations……………………………………………… 19 Research on Measurement of System Status……………………………………… 20 Literature Review Summary………………………………………………………. 23 3 THE IMPROVEMENT METHOD………………………………………………… 25 Defining a Bottleneck in Services………………………………………………….. 26 The Logic of the Method…………………………………………………………… 29 Inputs Needed for the Logic of the Method……………………………………….. 29 Characteristics of a Service Factory Wherein This Method Will Apply………….. 30 Long term vs. Short Term View…………………………………………………… 33 4 CASE STUDY DESCRIPTION AND MODEL FORMULATION……………… 35 Mapping the Service System of Aircraft Turns…………………………………… 35 Overview of this Case Study……………………………………………………… 35 Scope of the study………………………………………………………………… 43 Narrative of the Process of Turning a Flight……………………………………… 45 Data Collection for the Turnaround Process………………………………………. 48 Characterizing this Service System……………………………………………….. 59 All Flights are NOT of Equal Importance………………………………………… 61 The As-Is Model…………………………………………………………………… 62 Validation of the As-Is Model…………………………………………………….. 70 Applying the Theory of Constraints to Formulate the To-Be Model…………….. 75 Determining the Number of Ramp Workers Assigned to a Task………………… 84 5 ANALYSIS AND DISCUSSION…………………………………………………. 90 Performance Measures and Terms………………………………………………... 90 Number of Ramp Workers Assigned to Each Task………………………………. 90 Paired Samples Statistics of Each Model…………………………………………. 92 Comparing Costs per Flight Controlling for Hub Destination Flights Only……… 99 viii Optimistic Turn Times…………………………………………………………….. 100 Critically Late Flights……………………………………………………………… 100 Cost this Flight…………………………………………………………………….. 100 Man Minutes and Worker Compensation…………………………………………. 101 6 CONCLUSIONS…………………………………………………………………… 102 Summary……………………………………………………………………………. 102 Contributions and Significance…………………………………………………….. 103 Requirements for the Method……………………………………………………… 103 Limitations…………………………………………………………………………. 104 The Theory of Constraints is Applicable to Services……………………………… 105 Service Improvement Method……………………………………………………… 106 Future Research…………………………………………………………………….. 107 REFERENCES…………………………………………………………………….. 109 VITA………………………………………………………………………………. 113 ix LIST OF TABLES TABLE PAGE 1 - Isomorphism between TOC and PERT/CPM……………………………………. 22 2 - Processes, Datasets, and Observed Data…………………………………………. 58 3 - Flight Attributes, Descriptions, and Mathematical Expressions………………… 65 4 - Variables and their Expressions for the As-Is Model……………………………. 68 5 - Processing Rates Given the Number of Ramp Workers…………………………. 69 6 - Decision Tree for Bottleneck Ratios……………………………………………... 87 7 - Confidence intervals for the Mean Savings Given Worker Compensation……… 101 x LIST OF FIGURES FIGURE PAGE 1 - The Outline of TOC from (Mabin and Balderstone, 2000)………………................ 3 2 - Integrated TOC and Six Sigma Framework (Ike Ehie 2005)……………................. 17 3 - Service Process Matrix………………………………………………....................... 18 4 - Improvement Method Using the Bottleneck Ratio………………………................ 28 5 - Process Map of the Turnaround Process Contemplated in this Study………........... 46 6 - Distribution of Arrival Lateness……………………………………………............ 50 7 - Gantt Chart of Work Schedule of Workers…………………………………........... 51 8 - Gantt Chart of Scheduled Turns Used in the Model………………………............. 63 9 - Modeling Arrival Lateness…………………………………………………............. 64 10 - Comparison of Turn Times……………………………………………….............