Products

The Lean Machines

By Robert W. Moorman | August 1, 2004

Indianapolis - The restructuring of Rolls-Royce Corporation's Plant 5 in the southwest corner of this Midwestern City epitomizes the cost-driven changes taking place within the rotorcraft engine and aftermarket industries. What was once a dim-lighted, inefficient manufacturing monolith is being transformed into a modern, tightly managed facility that employs product improvement methodologies and the latest in technology.

While sales of new aircraft and engines continue to lag, Original Equipment Manufacturers (OEMs) and their service partners prepare for better days by improving facilities and production methods of the current models. The partners also want to make sure that their existing customers remain customers. Demands by operators for more accessible and affordable engine service, as well as service options, have forced OEMs and their partners to improve their methods of production and service. In other words, manufacturers and service providers are spending money today to make money tomorrow, hopefully. Today, lean means green.

"There is an enormous imperative to reduce the development cost of new rotorcraft, as well as the operations cost of the helicopter," said MRO expert Kevin Michaels, a principal with AeroStrategy Management Consulting.

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Manufacturing and service-enhancing concepts like Six-Sigma, 5S (Sorting, Set In Order, Shining, Standardizing and Sustaining), Shingijitsu and Value Stream Mapping, all of which have been standard tools for other industries, have now become an integral part of airframe and engine production, as well as for their service partners. Information Technology (IT) solutions, once considered an experiment at best, is now a must for rotorcraft engine makers. Employ these methodologies or lose your competitive edge, lean experts tell R&W. Worse, invest now or go out of business.

Last year, R&W examined the mutually beneficial relationships between the makers of rotorcraft engines and their independently owned maintenance, repair and overhaul (MRO) shops. This year, the magazine explores the specific steps taken by OEMs and their partners to become more efficient and cost effective.

Rolls-Royce's $20 million Project Evolution is expected to transform Plant 5, which produces several variants of the ubiquitous 420-813 shp Model 250, as well as other engines for fixed and rotary wing aircraft, into a next generation facility. The project began in December 2002 with initial demolition, followed by internal improvements in 2003. In 2004, Phase 2 began in earnest.

The orders to slim down and become more efficient come from the highest levels within the Rolls-Royce Group. "Today's highly competitive industry environment is driving Rolls-Royce to focus on lean manufacturing processes, which in turn requires internal investments, not only in facilities and equipment, but in people as well," said COO Steven Dwyer.

"It's all about cost reduction in the supply chain," added Lee Fromson, director of business improvement, who briefed R&W on the changes occuring at Indianapolis.

In the service arena, it's about reasonably priced maintenance and faster turn-around-times (TAT). "If I can do without my helicopter for 30 days, I can probably do without my helicopter," one customer told David Ford, president of Keystone Helicopter Corporation, an industry leading service center for Rolls-Royce and Turbomeca, and a completion center for Sikorsky.

Brutal competition and tough economic times mandate that service organizations follow the lean path created by the OEMs. "Some of the greatest gains in lean come when you cross the boundary between OEMs and their suppliers," said Ford.

Sikorsky, for whom Keystone performs numerous aircraft completions, has sent its lean experts to Keystone's facilities to perform a value stream analysis, where each step in the maintenance or completion process is analyzed. The object is to look for those processes that take a disproportionately long elapsed time versus the touch labor, said Ford. As a result, the OEM has aided the MRO to come up with cost and time saving initiatives.

As for future-minded investment, Keystone acquired a $1 million state-of-the-art test cell for inspecting rotorcraft engines. The cell gives Keystone better insight as to what the engine is experiencing over its life and simulates the actual environment in which the engine operates.

As to the need for lean practices, Keystone and other service centers are getting intense pressure from operators, according to Ralph Kunz, new vice president of MRO Services for Keystone. Kunz worked for many years at ACRO Aerospace, a leading service center in Richmond, British Columbia. Remanufacturing of parts, for example, is a key area for savings, said Kunz. The OEMs cost of re-manufacturing is high. So the job of rebuilding/remanufacturing parts falls to facilities like Keystone. R&W heard the same story from other OEMs and their service centers. Once the sole province of the OEMs, remanufacturing of parts is now being given to the lower-cost service centers.

In Indianapolis, Project Evolution, calls for Plant 5 to shrink from 2.7 million sq. ft. to 1.9 million sq. ft. by the end of 2005. So far, 205,000-sq. ft. of space has been destroyed with another 600,000 sq. ft. slated to face the wreaking ball. Project Evolution is designed to rearrange the production stream as well as demolish unneeded floor space. Of the 51 manufacturing departments, 41 are to be rearranged.

Project Evolution is expected to save $13 million in overhaul utility, insurance and property costs. Since buying Allison from General Motors in 1995, Rolls-Royce Corp., formerly Rolls-Royce Allison, has invested nearly $250 million in the overall facility that includes Plant 5.

Significant changes on the production floor are saving time and money for Rolls. The company has developed an eight-station production flow line for the AE 3007, which powers the Embraer family of regional jets. Significant portions of the AE 3007 flow line concept will be applied to the production of the 250 and the 1107. The 250 powers a host of Bell Helicopter Textron rotorcraft while the 1107 powers the Bell-Boeing V-22 tilt-rotor.

The traditional method of having the installer seek out the parts for the 3007 has been replaced by 25 fully stocked kits at each station. Recently, Rolls-Royce formed a partnership with German logistics integrator, TMX Aerospace, part of the Thyssen Group, to provide the already assembled kits to Rolls Royce.

Kitting will become commonplace for the other turbofan and turboshaft engines produced in Indianapolis, according to Fromson, who projects a 70 percent reduction in assembly time for the 3007.

Rolls Royce and Aviall Services, Inc., exclusive distributor for Model 250 parts, have expanded their four-year relationship by launching "E-Pubs," a new range of electronic publications developed in partnership with Command Technology, Inc of Groton, Conn. The evaluation of E-Pubs technology by Rolls-Royce Authorized Maintenance Centers (AMCs) has shown an efficiency gain of 728 percent in product data retrieval time.

As part of its overall restructuring, Rolls Royce recently unveiled the Model 250 Full-Service Integrated Rolls-Royce Service Team (FIRST) network. The reshuffling, which is the first since the AMCs were formed 12 years ago, reduces the number of AMCs from 31 to 24 and reclassifies them under the FIRST umbrella, which is designed to maximize the "freedom of choice" for 250 operators and give greater oversight control to Rolls-Royce.

The FIRST network includes three company-owned Rolls-Royce Service Centers in Brazil, Philippines and Oakland, Calif.; 13 independent AMCs scattered throughout the world; four Authorized Military Overhaul Facilities (AMOF) in Italy, Taiwan, Greece and Germany; plus four Authorized Repair Facilities (ARF) in the U.S. and Canada.

Asked why they reduced the number of AMCs, Mark Boyle, director of customer service solutions, said that, "We wanted to keep the standard fairly high. We wanted to create full service overhaul shops, not just a store front."

Indeed. But the effort is also part of the Rolls-Royce Group's overall plan to capitalize on the money making potential of the aftermarket. In 2003, aftermarket revenues, including joint ventures, were $6.2 billion, or 60 percent of the total Rolls-Royce Group revenues of $10.3 billion. Of total Defense turnover of $2.6 billion, the aftermarket accounted for $1.4 billion, or 56 percent of the Group's revenues. Those figures are expected to rise in 2004, according to Rolls-Royce.

A few of the AMCs, which asked not to be identified, said the doubling of the franchise fee along with further requirements for membership prompted them to drop out. Air Services International (ASI), Asia Pacific Aerospace (APA), EADS Seca, Patria Osterman, Techno Turbinas, Universal Maintenance Center (UMC), Dallas Airmotive, which acquired Premier Turbines and consolidated all of its Model 250 related activity into Premier; and Petroleum Helicopters Inc. (PHI) were removed from the AMC network.

In March, PHI entered into a six-year Model 250 customer support agreement, in which it will do its own engine service in-house through Evangeline Airmotive subsidiary. Calls to PHI to comment on its new in-house overhaul maintenance capability were not returned.

According to Boyle, the present crop of AMCs must have overhaul, inspection and testing capability on site for the 250. The AMCs must be well capitalized, willing to invest in the partnership as well as have a good track record. AMCs must be properly insured and use only licensed vendors.

A minimum number of qualified airframe and powerplant (A&P) mechanics -some cross-trained on other engines - and engineers must be on staff. This is a major challenge for some AMCs because of the shortage today of qualified A&P mechanics. The AMCs must share some of the burden of training mechanics and technicians, although some support, such as remote site training, is offered by Rolls Royce, said Boyle.

Elsewhere, R&W found OEMs and their service centers implementing lean processes in earnest.

With Turbomeca, a division of the Snecma Group, the move toward more efficient production and maintenance of its Arriel 1&2 and Arrius 2 powerplants began over a year ago with the launching of its "MORE", or MOre REsources, initiative. The company tripled the number of technical representatives and expanded its Turbo Support Center network around the world. Complaints by operators have dropped appreciably.

"We're seeing turn-around-times on engine work reduced by about 50-60 percent," said Russ Sprey, president of Turbomeca USA. The company produces or overhauls nearly 700 engines annually out of Grand Prairie, Texas, he added.

Response time on parts has dropped from 3-5 days to 48 hours, said Sprey. Average shipping times for parts is between 5-7 days, down from 25-30 days, as a result of improvements in production and shipping. Like other OEMs, Snecma has adopted Six Sigma and the 5S program and other cost-effective initiatives to improve production processes.

This year, Turbomeca moves into the second phase of improving production and overhaul service. Three logistics or Turbolink Centers are being developed. One at Roissey Charles de Gaulle Airport is already operational. Another, to open this August, will be co-located with Turbomeca USA in Grand Prairie. A third Center will be established in Sydney, Australia in 2005. The Charles de Gaulle center suffered some glitches early on with the integration of the SAP software. But that has been worked out, said Sprey. The Grand Prairie facility will receive its Foreign Trade Zone approval in August. The Sydney facility will complete the logistics ring for Turbomeca.

To further improve MRO activities, Turbomeca is working with repair solutions specialists Propulsion Technologies LLC, another division of the Snecma Group, to achieve more cost effective ways of working on engines.

The company has also invested in robotics to improve the overall product. In the past, the thousands of heat-reducing vent holes in the burner can of the Arrius engine were produced by hand. Today, a laser drill strategically places those holes. The technology has help reduce time in shop due to premature cracks in the burner can.

The list of Turbomeca Approved Centers is the same as last year, with one exception. The company is establishing a light maintenance center in Lafayette, La. to support operators along the Gulf of New Mexico.

Pratt & Whitney Canada (P&WC) continues to improve its production and service processes through its Achieving Competitive Excellence, or ACE program, which is similar in scope to Six Sigma. Value Stream Mapping, failure analysis and simulating work in progress has helped P&WC come up with better repair processes.

"Our ACE program is our operating system to drive improvement," says Benoit Brossoit, VP, and Service Centers for P&WC.

Brossoit said turn around time for engine work has been reduced by 50 percent across-the-board since implementing the ACE program. Like other OEMs, PWC has employed the use of a Mobile Repair team that can within hours provide on-wing maintenance within a certain area.

New technology has helped to reduce maintenance costs for the Canadian manufacturer. PWC continues to improve its Smart Cycle+ helicopter and engine monitoring system developed by Altair Avionics Corp., which P&WC acquired over a year ago. Altair's advanced diagnostics products are applicable to a variety of engine applications.

With the Altair Intellistart+ box installed on the helicopter, a pilot can determine whether the aircraft needs to be taken out of service due to a foreseen problem.

OEMs and their MRO partners continue to find ways to save themselves and their customers' money on the front and back-end of an engine purchase. Providing cost effective service on an older engine can serve as a prologue to purchase of a new powerplant. The inclusion of lean into manufacturing and maintenance is the cost of doing business in a lean time for sales of new engines and airframes.

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