Ch.17 – The OM Blog by Heizer, Render, & Munson

OM in the News: Just How Reliable are the Boeing 787 Batteries?

For an interesting discussion of reliability when you teach Chapter 17 in our text, we turn to The New York Times (Feb.27, 2013) article on how U.S. and Japanese aviation authorities have confronted a steep learning curve trying to unravel what caused last month’s battery failures on a pair of Boeing 787 Dreamliners. The lithium-ion batteries are commonplace in consumer electronics and electric vehicles, but despite being lighter and more efficient than older technology, they have never been used in aircraft as extensively as on Boeing’s flagship jetliner. After 7 weeks of nearly round-the-clock efforts, the National Transportation Safety Board has failed to find the root cause of the dangerous battery malfunctions that grounded the entire 787 fleet. Industry and government officials on both sides of the Pacific increasingly are skeptical a breakthrough is imminent.

Before approving the Dreamliner to begin carrying passengers in late 2011, regulators embraced Boeing’s risk assessment showing that the chance of a 787 battery meltdown was about one in 10 million flights (That means R= 0.9999999). That is roughly 100 times safer than some of the industry’s most reliable jet engines, which on average malfunction and have to be shut down roughly once every 100,000 flights.

But the U.S. Department of Energy (DOE) sees Boeing’s initial risk analysis as unrealistic, particularly considering variations among parts. “When carefully examining the nature of the material or the tolerance possible within the manufacturing process, it is difficult to arrive at those [risk] numbers,” writes DOE. In commercial use, the batteries have now ruptured and burned twice in less than 50,000 flights (or an R=0.99996). Contrary to FAA projections of an extraordinarily low likelihood of a serious airborne mishap, the Energy Department says the malfunction rate of the batteries has been higher than would be acceptable for uses on the ground. “That wouldn’t be a reasonable number for the auto industry.”

Discussion questions:

1. Why do Boeing’s reliability numbers differ so greatly from observed failures?

2. What are the options for operations managers at Boeing at this point?

OM in the News: Boeing’s Dreamliner Nightmare

By now, you likely know that the Federal Aviation Administration (FAA) ordered U.S. airlines to ground the Boeing 787 Dreamliners in their fleets until the lithium-ion batteries on the planes could be proved reliable. The FAA’s action, writes USA Today (Jan.17, 2013), came after Japan’s two largest airlines grounded their combined 787 fleets because an All Nippon Airways (ANA) plane had to make an emergency landing when the crew detected a battery’s burning smell.

The 24 Dreamliners flown by ANA and Japan Airlines represent nearly half the 50 that Boeing has delivered to airlines. More than 800 of the planes are on order. The Dreamliner is Boeing’s newest and most technologically advanced jet, and the company is counting heavily on its success; it is the first commercial aircraft to be made largely of lightweight, fuel saving, carbon composites rather than conventional aluminum and steel. Passengers like the airy cabins, large windows and comfortable humidity.

But the Dreamliner has had technological and supply chain problems from the start, which resulted in its being 3 years late in delivery. Last month, United Airlines and Qatar Airways had to divert or ground planes because of electrical issues. The 787 relies heavily on electricity and thus needs the large lithium-ion batteries to power it. Batteries, though, aren’t the plane’s only problem: On Jan. 8, a fuel leak on a Japan Airlines flight to Tokyo was detected before takeoff from Boston. On Jan. 11, cracks were spotted in the cockpit window of an ANA in Japan. The same day, another ANA flight was delayed because of an oil leak from an engine generator.

Boeing has said the 787’s reliability is “well above 90%.” As you teach reliability in Chapter 17, however, recall that the overall reliability of the Space Shuttle was .98–and, indeed, 2 Shuttles crashed out of 100+ flights.

How do passenger’s feel about the plane? “The uncertainty surrounding the Dreamliner makes it a plane that isn’t one that you can book and expect to fly reliably,” says one travel analyst.

Discussion questions:

1. What is the major operations issue facing Boeing right now?

2. What was the reliability of other technologically new planes introduced in the past 50 years?

Good OM Reading: Ford’s Strategy for Reliability–and Failure

From tires to hinges to helicopter blades, everything breaks eventually. The only question is when, writes Wired Magazine (Nov., 2012). This must-read article, titled “Why Things Fail,” is worth sharing with your students if you are teaching the topic of reliability (Chapter 17). Ford Motor knows product failure, and still recalls the 2000 disaster in which some 192 people died when their Explorers’ Firestone tires fell apart. But it is clear that, in the tragedy’s wake, the company learned something. As it overhauled its testing program, Ford’s warranty costs plummeted, and its vehicles went from having some of the worst reliability scores in 2000 to having some of the best today. From the embers of the Explorer disaster, Ford has become one of the best companies in the world at managing failure–equalling Honda and Toyota.

At Ford, learning exactly when and how things will fail—over many years and across a spectrum of millions of vehicles around the world—now saves billions of dollars (and, of course, many lives). So in Building 4, a massive complex in Dearborn, MI, called Ford’s Tough Testing Center, parts like the gas petal hinge endure a constant torrent–simulating years of use–until they finally fail. Building 4 is a monument to a dark truth of manufacturing: Even the best-engineered products fail. Some percentage of all mechanical devices will break before they’re expected to. “Companies say they want to be 100% failure-free after three years,” says one industry expert. “But that’s impossible. You can’t do it.”

Whenever a new part—like that gas-pedal hinge—is designed, the first question Ford asks is, how long does it need to last? Ford’s standard warranty guarantees parts for 3 years and the engine/transmission for 6. But to ensure that parts easily surpass warranty claims (and hopefully ensure that buyers feel they own a reliable product), Ford aims to have everything last 10 years. Upholstery, transmissions, paint—all of it is built to last at least a decade. Quite a change from the planned obsolescence of my father’s cars of the 1960’s!

OM in the News: Neil Armstrong and Reliability

To most Americans, especially those of us who used to work at NASA, Neil Armstrong’s death was the loss of an American hero, and a sad ending to our Moon exploration days. But the reason we mention the astronaut in today’s blog is his speech about the topic of Chapter 17, reliability. Surely someone who risked his life in every launch and who studied engineering understood the mathematics of reliability.

As reported in The Wall Street Journal (Aug. 26, 2012), here are Armstrong’s remarks: “Each of the components of our hardware were designed to certain reliability specifications, and far the majority, had a reliability requirement of 0.99996, which means that you have four failures in 100,000 operations. If every component met its reliability specifications precisely, a typical Apollo flight would have about 1,000 separate identifiable failures.”

“In fact, we had more like 150 failures per flight, substantially better than statistical methods would tell you that you might have. I can only attribute that to the fact that every guy in the project, every guy at the bench building something, every assembler, every inspector, every guy that’s setting up the tests, cranking the torque wrench, is saying, ‘If anything goes wrong here, it’s not going to be my fault, because my part is going to be better than I have to make it.’ And when you have hundreds of thousands of people all doing their job a little better than they have to, you get an improvement in performance.”

I appreciate Armstrong’s observations–and think your students may as well. In those days, you could stand outside a NASA Space Center and never tell when quitting time was. Engineers simply stayed each day till they felt their work was done–maybe at 6 pm or even 9 pm. When we work on projects we are all interested in and dedicated to, there is nothing we cannot accomplish.

Discussion questions:

1. What was the reliability of each Shuttle flight, given that 2 Space Shuttles crashed in about 140 flights?

2. In what other industries is reliability equally important?

OM in the News: Sears Suffers as it Skimps on Maintenance

The Wall Street Journal (Nov.17, 2011) writes: ” In a holiday season when all retailers are worried about luring customers into their stores, Sears faces an extra challenge: Some of its stores are dumpy”. It turns out that the chain has skimped on maintenance at its aging stores since it merged with Kmart six years ago. “No one really comes here anymore”, says a customer at a Dallas Sears store, as she walks around an empty store devoid of any sign of holiday cheer. By contrast, the Macy’s store next door was festooned with fake presents, oversized bows, and prominently displayed Christmas stockings. Customers were streaming in.

Maintenance, our topic in Chapter 17, is important for a fresh atmosphere that signals to shoppers that products are up-to-date and worth buying. Even Wal-Mart, known for its Spartan operations, spent billions on renovations in recent years. And Macy’s just announced a $400 million renovation of its flagship NYC store. By comparison, Sears spent only $441 million maintaining all of its 3,100 stores last year. That comes out to about $1.90 per square foot. Store chains typically spend $6-$8 a foot on annual maintenance, so Sears is sitting at about 1/4 of what it needs to spend to keep stores an acceptable level at which to shop.

Consumer Growth Partners, a consulting firm, rates the Sears fleet as the most rundown in US retailing. Adds Columbia U. Prof. Mark Cohen: “There is no viable retail strategy here. In retailing, when your stores get dark, dirty, and grim, you are past the point of no return”.

Discussion questions:

1. Why is Sears spending such a small amount on maintenance?

2. Why is maintenance one of the 10 decisions operations managers deal with?

OM in the News: Probability the Space Station Crashes

Now that the last Space Shuttle has been retired, much debate has focused on the reliability of the Russian Soyez capsules as the sole means of reaching the $100 billion International Space Station (ISS). Prior to that , our July 11th blog discussed the overall reliability of the Space Shuttle, which at Rs=.98 suggested one fatal crash every 50 missions (and indeed there were 2 crashes in the 135 flight life of the Shuttle). But, interestingly little has been mentioned in the press about the reliability and safety of the ISS itself.

Today’s Orlando Sentinel (July 25,2011) brings to light 3 important facts: (1) the ISS will be abandoned in any event by 2020 (if it lasts that long), (2) the probability of it taking a disabling strike from space debris is 16.6%, and (3) the probability of a fatal collision is 1 in 13. NASA’s own task force found slightly worse odds, with a 0.125 probability that an astronaut will die or the station would have to be abandoned.

The problem is space junk–those 1,000’s of pieces of old rockets and satellites that were destroyed in space. “The orbit they are flying in is the worst possible. The Russians blew up all kinds of things in that orbit”, says a retired NASA exec. (That 1 in 13 chance of a disastrous collision with space junk is, of course, the same as what a card player faces in drawing an Ace from a deck). NASA estimates that there are 500,000 pieces between 1-10 centimeters (large enough to do damage) floating around –and 20,000 more deadly pieces (larger than 10 cm). Just 4 weeks ago, a piece of debris caused a big enough scare to send the 6 astronauts on board the ISS scrambling to Soyez escape capsules. The debris passed within 1,100 feet of the Space Station–the closest near-miss yet.

Discussion questions:

1. Discuss the role of manned space exploration in light of the probabilities given.

2. What are the main operations issues vis-a-vis the ISS?

OM in the News: Service Quality vs. Maintenance Time at Disney World

You might not think that maintenance of Walt Disney World’s monorail line in Orlando would be a controversial topic (see Ch.17). But the Orlando Sentinel (July 12, 2011) reports that plans to give maintenance crews more time to work on the aging system are certain to anger Disney’s premium-paying hotel guests. Disney had previously kept its trains running until at least 1 1/2 hours after theme parks closed. Now service will shut down 1 hour after normal closing hours.

The beef is that guests who stay at these hotels on Disney property have “late night privileges”. This means the parks will stay open for them–and not for regular guests– as late as 3 am and then reopen at 7 am. But Disney says that trains take 90 minutes to “cycle down” and another 90 to “cycle up” the next morning, leaving only 1 hour of downtime for maintenance.

Reliability has suffered in recent years, perhaps because of the limited repair time. In 2009, the monorail system lost power at 1 am and it took Disney’s crews 3 hours to unload the weary passengers. “It’s been pretty obvious that transportation maintenance is one of the areas they cut back on during the recession”, says the popular website Disney Blog. The blog also predicts Disney will suffer a backlash from guests staying at the most expensive hotels on the property, since they are the ones who “expect the most preferential treatment”.

Discussion questions:

1. Discuss the tradeoff between customer service and the need for more maintenance time.

2. What else can Disney do to deal with the problem?

OM in the News: NASA’s Last Space Shuttle Launch

When the final Space Shuttle launch took place on July 8th, an era of tragedy and triumph that dominated space travel for a generation drew to a close. I worked at NASA headquarters in the late 1970’s during the planning for the 1981 inaugural launch of Columbia, and always followed the program closely–to this day I can watch every launch from my backyard in Central Florida! In 1982, Prof. Paul Meising (SUNY-Albany) and I published four OM-related cases about the Shuttle, which appeared in earlier editions of the Heizer-Render OM text. They dealt with Shuttle reliability (Ch.17), astronaut assignment (Ch.15), forecasting demand (Ch.4), and ordering external tanks (Ch.12).

Looking back on the Shuttle program 30 years and 135 missions later, several facts stand out. First, with a 98% reliability rate (Rs=.98), one would expect a major problem every 50 launches. And indeed, with the explosions of Challenger in 1986 and Columbia in 2003, NASA was almost statistically due for a 3rd disaster. The Wall Street Journal (July 9-10, 2011) quotes Duke space historian Roger Launius as follows: “It was a magnificent failure. It was the most technologically sophisticated launch vehicle ever, but it never made human spaceflight safe, reliable, or economical”.

Launius was correct. Our 1979 forecasts at NASA for 500 flights within the 1st decade–basically a launch a week starting in 1986–were off by 90%. Our pricing structure assumed that private companies, foreign governments, and the Defense Dept. would cover all the bills as full-paying customers. We budgeted each launch at $15 million, when in reality the average cost rose to $1.5 billion–100 times the promised price. Now, as the Russians are charging us $20-30 million per seat to ride to the Space Station, a piece of American history draws to a close.

Discussion questions:

1. Was the Shuttle program a success overall?

2. Why did the program never reach its budget and schedule targets?

OM in the News: Maintenance at Southwest Airlines

Maintenance may not be the most exciting of all the topics we teach in OM (see Ch.17), but when it’s not done right, it certainly is the most critical. Southwest Airlines found this out–and barely dodged a bullet–when a 5-foot hole ripped through the roof of one of its Boeing 737-300 jets on April 1st. The near tragedy occurred at 35,000 feet during a flight from Phoenix to Sacramento. At least 2 people passed out and a few were injured with the explosive incident, which caused a loss of cabin pressure.

According to the FAA, the airline found and fixed 21 cracks in the fuselage of the same plane 11 months ago during a weeklong inspection. (The 15 year-old plane is part of an old fleet of 288 Boeing 737-300s flying at Southwest–out of 931 worldwide). Today’s New York Times (April 4, 2011) reports that Southwest has cancelled 100’s of flights and found identical cracks in two other 737s. “It’s amazing it didn’t rip open further”, says a plane maintenance expert.

Southwest has a history of maintenance problems. In 2008, the FAA set a $10.2 million penalty for the airline’s failure to check for fuselage fatigue cracking. In July, 2009, a football-sized hole blew during a flight over West Virginia. Details of the FAA settlement for improved maintenance are considered proprietary. Southwest plans to phase out the older models over the coming years but would be “putting those aircraft that had ‘no findings’ back into immediate service”.

As we wrote in Ch.17, “Maintenance can improve quality, reduce costs, and win orders. It can also be a matter of life and death”.

Discussion questions:

1. What can Southwest, and other airlines, do to prevent such incidents?

2. Why does finding these cracks cost so much and take so long?

OM in the News: How Reliable is the Engine on Your Jet?

It was hard to miss the front-page headlines in almost every paper around the world last week when a massive engine exploded on a Qantas Airways A380 superjumbo jet. Early in my career, I worked on the design team for the GE CF-6 engine, also an immense device. So the news blasts caught my attention for 2 reasons: (1) I wanted to make sure the plane landed safely, and (2) I wanted to make sure it wasn’t an engine I had somehow touched.

The Qantas issue raises the question of just how reliable jet engines are (Ch.17). This particular engine, the Trent 900, made by Rolls-Royce was developed for the Airbus double-decker A380. But is is still what we call an “immature engine”, which has yet to meet expected levels of reliability. It is installed in only 21 planes (meaning 84 engines are in use). Other A380s use the GV7000 engine, jointly developed in the US by GE and Pratt & Whitney. Just for background, an A380 retails for about $300 million, of which $50 million is the cost of engines.

Qantas immediately grounded its A380 fleet for engine testing by Rolls-Royce experts. Rolls, according to the linked WSJ article has “been buffeted by a series of design and reliability issues affecting engines it supplies for other jetliner types”.

That brings up another related reliability issue. Later in my career, I worked at NASA headquarters and wrote a series of case studies on the Space Shuttle. The Shuttle has a reliability of 0.98 overall. This, of course, translates to a major disaster in 1 out of every 50 flights….which has indeed been the reality, with Challenger and Columbia exploding during 130 or so flights to date. You may want to discuss the Ethical Dilemma in Ch.17 that relates to such a 98% reliability.

Discussion questions:

1. What has taken place since this article was published?

2. Compare the reliability of a jet engine or plane to a Shuttle flight.

OM in the News: Detroit Moves Up in Auto Reliability, But Asia Still Rules

People buy cars for all sorts of reasons: styling, prestige, safety, and even color. But a reputation for quality and reliability is the one constant to almost every consumer, according to The Wall Street Journal (Oct.27,2010). With this week’s release of Consumer Reports’ rankings of new auto reliability, there is some good news for Detroit.

Ford and GM have greatly improved the reliability of their vehicles, and in some sectors are ranked better than their Asian counterparts. The Ford Fusion, for example, is now tops in the “family car” segment–bettering the Toyota Camry, Honda Accord, and Nissan Altima. Ford is the top American company overall.

Chrysler, sadly, has still not taken off and is dead last in the rankings. Toyota’s once sterling reputation was also dinged; its Prius hybrid fell to “average” from its once high-rating because of recalls and brake problems. BMW ranked only 24 out of 27 brands, underlining how luxury car makers face quality challenges as they insert advanced technologies (that don’t always work perfectly) into their vehicles.

Good quality, as we in OM all know, creates an upward circle: the more reliable the car, the more people are willing to pay, and then the less discounts are needed. “It doesn’t take very long to lose a good reputation, but it takes 5 or 10 years to gain one”, says a Consumer Reports director.

Discussion questions:

1. Give some examples of products (cars included) where it took years to rebuild a damaged quality reputation.

2. Why is the Honda family of vehicles ranked consistently high?

3. Ford is now ranked 10th out of the 27 auto makers. What will it take to move to the top of the pack?