In yesterday's issue of USA Today, there was an interesting article by Dan Reed on Airlines losing a record number of bags last year. As a air traveler for many years, I have experienced the pain of losing my bags after a flight. It is not a pleasant customer experience. After quickly reading the article, I thought that of all problems that could be considered for a Six Sigma project, this would be one wickedly cool project!
Based on the numbers contained in the article, a major quality improvement by any airline in their lost bags metric would greatly improve customer satisfaction and boost the bottom line. What was the cost of this poor quality performance? The article estimated the cost to the airlines for loss bags to be $2.5 billion. With the current financial situation of the airlines, this would be a huge improvement opportunity.
According to the article, 30 million bags were lost out of 3.7 billion bags checked in last year. With less than 1% error rate, it was stated this 99% success rate would be considered good in many industries but basically is unacceptable for the airlines. OUTSTANDING quality viewpoint! Do not accept the 99% success rate as good enough.
Using these numbers, the airline lost baggage rate is 8,108 Parts Per Million opportunities defective(PPM rate). In the six sigma world, that would be under a 4 sigma performance level. Remember a six sigma level would be only 3.4 parts per million (PPM) defective.
Without many of the details, it would be difficult to analysis the problem. However, the article did help point out some focus areas. With about 61% mishandled bags occurring on baggage transferred from one flight to another (versus direct flights), I would obviously focus investigative efforts on this process. In addition, 15% of the errors were due to the airlines failing to load them on the proper fights. Sounds like there is some level of data to start a formalized problem solving investigation.
By asking the 5 why's, along with Pareto charts and cause/effect analysis, the airlines could begin to see the root causes for lost bags and start countermeasures to poka-yoke (mistake-proof) the process. With all due respect to the airlines, this improvement process sounds easy, when in fact, it is difficult to isolate these common cause variations and prevent them from occurring. Difficult but certainly not impossible!
My advice to the airlines, don't focus on layoffs and pay cuts that further erode your employee relations. That short term thinking to cut costs will not build your team that you need to be more competitive for the future. The negative price you pay is too high. Instead, work together with your employees and try a focused six sigma program. As a team, go after the $2.5 billion along with other process improvements. You need the money, but more importantly, a large number customers will be transformed into extremely happy passengers!