The airline industry is fiercely competitive and challenged by rising costs and low margins. Airlines operating in this high-risk marketplace must carefully align their business and operating models. One company working to achieve this objective is Delta Air Lines. After facing significant challenges in the early 2000s, and filing for bankruptcy protection in 2005, Delta now serves more than 180 million customers each year and is ranked as the world’s largest airline by Forbes Global 2000.
These days, very little separates one airline from another. So, Delta executives decided to take aim at the customer experience through superior onboard catering. This service is regarded by Delta executives as a differentiator, particularly for their premium classes. In 2015, Delta partnered with its Atlanta caterer, Gate Gourmet, to establish a new approach to airline catering. Their solution is embedded in the theory of constraints (TOC), and, through the initiative, Delta moved away from the age-old model of catering through mass production and toward one of catering through mass customization.
Adapting to change
Delta’s original catering model involved standardized, full-meal services offered at each cabin. This later evolved into a minimized-product-offering plan, with tailored service offerings based on flight length and markets served. Catering was no longer a standard, single-build process across all fleets; instead, it required highly variable, flight-specific plans. In addition, as Delta made necessary aircraft changes — as many as 150 times per day — to accommodate operational or maintenance issues, such events often resulted in flying an aircraft type different from that specified in the original flight plan. This had a negative effect on catering efforts, which faced significant difficulties related to adapting to capacity, complexity and customer requirement shifts.
In 2015, Gate Gourmet was servicing 650-720 flight departures every day (depending on seasonality), representing more than 1,100 flight legs. However, because the company could only effectively handle 600 flights per day, it offloaded the other flights to a local sister facility. Yet, Gate Gourmet still was underperforming against customer reliability, quality and demand goals. Delta wanted Gate Gourmet to increase facility capacity in order to better handle its existing demand, as well as projected future growth of up to 850 departures in future years.
Meeting client objectives
The first step in Gate Gourmet’s improvement journey was to identify the constraint. This was critical to ensuring that everyone involved in the process was focused on the right matters. Because there were many different aircraft configurations with individual flight offerings associated with each flight, a careful analysis of the problem was essential. Ultimately, the primary constraint was determined to be the lack of space when getting trucks on and off the dock.
A root-cause analysis then was performed to determine why dock capacity was a constraint. The results revealed that high work-in-process (WIP) levels and the inherent variability of the system caused a number of undesirable effects that degraded system performance.
The variability started with the catering equipment itself. There were 31 different aircraft galley configurations, six catering cart types, three box carriers and 183 unique drawer configurations designed to hold a mix of catered food items produced by Gate Gourmet. Plus, equipment from up to 135 inbound flights was received during peak hours, which meant that the equipment processing area had to handle more than what was required for outbound demand in order to clear the queue. In addition, to help alleviate dock backups, used carts would be pushed into the equipment processing area. Staff flooded production lines with incoming carts regardless of the demand, further increasing WIP and delays.
The inherent variability of aircraft swaps, gate changes and schedule fluctuations further complicated cart loading. Understandably, there was a natural impulse by Gate Gourmet staff to want to start preparing the carts early. But doing so actually resulted in even higher levels of WIP and longer queues and lead times. As lead times increased, so did the need to expedite, and employee priorities became confused. This cycle fed on itself, creating internal chaos with no end in sight.
In addition, due to a limited number of delivery trucks, Gate Gourmet had to send multiple flights’ carts on a single truck. The drive time between gates and concourses, as well as loading and unloading, meant that flights with back-to-back departure times could not be loaded on the same truck. Therefore, carts did not reach the final staging area in the sequence required for on-time dock departure, incurring further delays and dock backups.
To address these challenges, Gate Gourmet decision-makers chose to adjust their scheduling methods to a system that used the constraint in a more effective manner — in other words, exploiting the constraint.
In the second step, exploit the constraint, Gate Gourmet employees first had to maximize the utilization of dock space. They began by assessing the movement of trucks and considering how they could enable a clearer focus on picking up carts from the dock in a timely manner, minimizing time spent in the field and efficiently returning to the dock when it was time to pick up another load.
First, truck batch sizes were reduced. Then, for inbound dock traffic, staging zones were created in the equipment processing area to queue inbound equipment by cart type instead of just processing and pushing them forward. The immediate emphasis was on pulling carts off the trucks and staging them in the zones as quickly as possible in order to keep the trucks moving. For outbound dock traffic, zones were created in the final staging area based on scheduled truck dock departure times. This ensured that flights on the same truck are staged in the same location and also put a cap on the maximum number of flights allowed in the final staging area.
The cap on the inventory staged in the final zone equaled 2.5 hours’ worth of dock departures. This inventory then was partitioned into 30-minute time banks to avoid overloading the area with carts. This was important because finalizing carts with last-minute items, such as ice, lemons, limes and dairy products, is particularly difficult if the zone is too cluttered.
Once the time banks were in place, the required security inspection process was carried out alongside the finalizing of flights, instead of further delaying truck departures by inspecting the carts while they are on the dock. This new inspection process allowed for easy prioritization and visual management.
In addition, Gate Gourmet implemented a dispatch solution to enhance visibility into Delta flight changes and truck fleet status in the field. The system features a direct feed from Delta’s operating system that loads changes in real time to the dispatch tool and delivers them directly to the responsible driver through a handheld device. A global positioning system also was installed, along with a map that shows truck movements. Furthermore, beacons were installed on every Delta loading bridge to automatically capture when a truck enters or exits the gate. The increased visibility gives Gate Gourmet tremendous insight into asset utilization, as well as arrival and turn-time performance.
Next, a drum-buffer-rope (DBR) scheduling plan was created using existing Gate Gourmet information technology (IT) systems. According to the APICS Dictionary, DBR is a method from the TOC for scheduling and managing operations that have an internal constraint or capacity-constrained resource. At Gate Gourmet, this technique uses dock departure times as a simplified drumbeat with a predetermined length of time as the rope that pulls flights — rather than individual cart types — into the procedure, facilitating a transition to a make-to-order system. Although the average turn time for a cart was 12 hours, the actual time necessary to build a cart for a flight is less than 20 minutes. So, in a perfect world, the Atlanta facility wouldn’t have needed more than two hours to cover for peaks in demand. To shield from uncertainty, it therefore was decided to set the buffer length at twice that: four hours.
In the new approach, all planned flight pairings going onto a truck were given the same required dock departure time regardless of flight departure. This ensured the correct sequence for flight release and production as well as proper final staging of the flights, as they had the same dock departure time. The scheduled departures were uploaded into the IT system and printed on all equipment flight tags. Chain-of-custody scanning was executed as well.
Another benefit of the initiative came from tracking and status updates, which now can be seen on monitors throughout Gate Gourmet’s facility. Managers can immediately see the effectiveness of the operation without having to walk through the facility inspecting carts and tags.
Airline food re-envisioned
This simple scheduling system subordinates everything to the demands of the constraint, and all milestones coincide with that schedule:
Milestone 1 — release. A flight is released into the system four hours prior to dock departure time.
Milestone 2 — kitchen ready time. Excluding last-minute items, the kitchen ready time for flight production is now one hour prior to deadline.
Milestone 3 — flight finalization. Flight finalization involves items that are added to carts at the very last minute. This milestone, as well as all audits and security inspections, now are completed by dock departure time minus 30 minutes. This ensures that the finalizing of flight carts will always be at least one staging zone ahead of the dock departure schedule.
Milestone 4 — dock departure. Dock departures are fixed, and any deviation is deemed late.
In the end, implementing a simple DBR scheduling system enabled a WIP reduction of more than 50 percent and a 25 percent increase in throughput. Gate Gourmet brought back in-house all offloaded flights, reducing annual costs to Delta by $1 million, and produced a peak of 813 flights in 2016, with a clear capacity to produce the 850 flights that soon will be required.
Gate Gourmet realized a 75 percent reduction in overall flight delays from its lowest point in 2015, making Atlanta the 2016 leader in on-time performance. These results catapulted the Atlanta operations to flagship status for Delta’s catering operations, and the airline is now reevaluating all hub operations based on this success.
Chris Fay is general manager of international catering operations for Delta Airlines, where he is responsible for the day-to-day operational execution of catering outside the United States. Additionally, Fay works on global continuous improvement efforts for Delta’s on-board services. He may be contacted at firstname.lastname@example.org.
Melissa R. Bowers is the Beaman Professor of Business in the Department of Business Analytics and Statistics at the University of Tennessee, Knoxville. She received the Richard Sanders Outstanding Leadership in Executive Education Award twice and the 2011 Outstanding MBA First Year Faculty Award, University of Tennessee College of Business. Bowers may be contacted at email@example.com.
Mandyam M. Srinivasan is the Pilot Corporation Chair of Excellence in Business at The University of Tennessee. He has received the Franz Edelman Award for Achievement in Operations Research from the Institute for Operations Research and Management Sciences. Srinivasan may be contacted at firstname.lastname@example.org.