BY STEVE BRECHTER KNOWING WHERE YOU RANK IN THE N
o doubt you’ve heard the buzzwords “best in class” hundreds of times. It often sounds a bit over-the-top to hear a company or organization call itself the best at something. Unless, of course, it really is. But how do you know if your maintenance organization
is really a top performer? And how would you go about demonstrating this success to your company’s senior executives? Understanding where your team ranks in the “best of” category can often be a complicated puzzle to solve without first defining what metrics make you a top performer, and then understanding what your peers across the industry are doing— and how you rank in comparison. So just in case you’re ever asked by management to demonstrate your team’s performance, here’s a simple guide to starting the benchmarking process.
What is Benchmarking? The Oxford Reference Online describes benchmarking as, “The process of identifying best practice in relation to products and processes, both within an industry and outside it, with the object of using this as a guide and reference point for improving the practice of one’s own organization.” Quite a mouthful. But when you boil it down, it’s all about
improvement. Sure, your dispatch reliability might be high, but is there someone out there who’s higher? And even though you might be meeting your budget, is there someone who’s doing what you’re doing for a lower spend? These days, you’ve got to have ready answers. It’s a sure bet that if you haven’t yet been asked to show your performance with respect to your peers, you will be, soon.
Why is Benchmarking Important? Now more than ever it’s important to demonstrate relative performance. Let’s face it, the 10-power magnifying glass we’re under is the result of a global corporate focus on cost and efficiency. We in maintenance manage a significant asset base and we need to show that we are managing it effectively—as well or better than anyone else. Every asset employed must create value.
So where do you start? By answering two fundamental questions: 1. 2.
What kind of data should I gather? Why am I gathering it?
Go Internal Before You Go External Most maintenance professionals set out on their benchmarking journey by looking inward. You can begin with your operating budget and the oft-non-negotiable expectation of favorable budget performance. A simple cumulative chart of the budget “plan” line vs. “actual spend” line shows the status clearly. In a moment, you (and senior management) can tell where your budget stands with respect to internal corporate expectations.
Then Reach Out
But how do you answer the inevitable question of your standing against industry peers? You’ve now got to examine
LEADING INDICATORS
“BEST OF” CATEGORY A SIMPLE GUIDE TO PERFORMANCE BENCHMARKING
what they’re doing. That’s the essence of benchmarking. In this case, you won’t be measuring against clearly defined corporate targets, so you’ve got to identify the key measurements by which to compare yourself to others. In maintenance, these typically include budget, maintenance dispatch reliability, aircraft flight-ready status, maintenance labor spend or unscheduled maintenance activity. Participating in industry
roundtables is a great way to identify benchmarking partners who are similar to you in terms of mission, size, number of aircraft, basing, etc. Once you assemble the peer group, establish a commitment to confidentiality as there’s often private company data shared. With set measures and
benchmarking partners, you must ensure everyone in the group is measuring each attribute the same way. For instance, when measuring Dispatch Reliability, you may consider an aircraft as “dispatchable” if it is on the line and ready for hand-off to Flight
As a senior advisor at Gray Stone Advisors, Steve Brechter
consults with aviation leaders to help them develop operational best practices and demonstrate the value created by business aviation organizations. Prior to joining Gray Stone, Steve held senior executive positions at United Technologies Corporation and NetJets Inc.
Operations two hours prior to launch. Others may use a one-hour interval. Clear definitions are important. It’s also important to level the playing field. Meaning, you want to ensure all comparisons are relevant. You’ll likely need to normalize the data among the peer group by flight hours, number of aircraft, etc., to get an apples-to-apples comparison of your performance against others.
Best Practices
Once you’ve gotten your benchmarking data back from the peer group, depict it in a graphical format and look for differences between your maintenance organization and others. There will be metrics that are both favorable and unfavorable to yours.
The key is to understand what makes the metrics from certain peer organizations favorable to yours. Such cases are likely driven by best practices. Say your peer’s “maintenance labor spend per technician” metric is lower than yours. Then it’s time to understand how they manage it. Future roundtables are a platform to share practices which will beneficial to all. That’s what benchmarking is all about. We’ve just begun to scratch the surface, but hopefully you see how effective maintenance performance benchmarking is done. It can actually be a lot of fun—and even more satisfying to circle back to the senior executive team and objectively demonstrate that you truly are in the “best of” category!. AM
Aviation Maintenance |
avm-mag.com | February / March 2012 43
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