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THIAISSUIVIPTIONTJNIVERSITTI
By
DETHPON LAPPHIPHITMONGKHON
October 2008
Project Title Improving Air Cargo Handling Operation
ABAC School of Management, Assumption University has approved this final report
of the six-credit course, SCM 2202 Graduate Project, submitted in partial fulfillment
of the requirements for the degree of Master of Science in Supply Chain Management.
Approval Committee:
&Ad oga.,,a
(Dr. Peeratarat Ittarattanachoke) (Asst.Prof. r. Sompong Sirisoponsilp)
Committee Advisor
Chairman
October 2008
Assumption University
ABAC School of Management
Master of Science in Supply Chain Management
"Improving Air Cargo Handling Operation: the case of an International Airline in Taiwan"
Signed
(Asst. Prof. Brian Lawrence)
Date: I 171-ASS
ABSTRACT
punctually, and with the highest quality possible. The international airline, which is
the focus of this case study, has established a service level rate of 97%, which means
that 97% of all shipments should arrive on time. To date, the TG Cargo Terminal at
Bangkok, which handles airline shipments, has not achieved this level of accuracy.
Therefore, the purpose of this project is to study the existing air cargo handling
operation of a selected airline, to determine the problems which occur and the causes
of the problem associated with the air cargo handling operation, and finally, to
The Business Process Reengineering method (BPR), has been utilized as a guide to
structure the work. The information was gathered with the assistance of existing TG
statistics from airlines which are the subject of this case study. The information was
analyzed using existing theories as problem areas were identified. The general
factors isolated in the airport terminal that affect time delay, or called "offloaded,"
Two areas with the highest deviation were the ULD reweigh area and the Load
Planner & Manifest area. These two areas were selected for further in-depth analysis
using a tracking method. The investigation revealed that staffs lack experience, have
high turnover rates, with an imbalance in KPI measurements between airlines and TG
within teams. Training is also necessary to increase their specialization while reducing
ii
ACKNOWLEDGEMENTS
This was a graduate project for Supply Chain in the Master of Science program in
Supply Chain Management.
This project has been carried out for an international airline at the TG cargo terminal
in Suvanabhum airport in Bangkok, Thailand. The purpose of this study was to
improve air cargo handling operation.
iii
,
ASSIAlifrilONTINTVERSITVT
TABLE OF CONTENTS
Page No.
Chapter I — Introduction
1.1 Background of the Study 1
1.2 Statement of the Problem 3
1.3 Research Objectives 4
1.4 Scope of the Research 5
1.5 Limitations of the Research 5
1.6 Significance of the Study 5
References 41
Appendices 43
iv
List of Tables
v
List of Figures
vi
CHAPTER 1
INTRODUCTION
The Boeing Company estimated that the airfreight business has presently enjoyed a
growth rate at 6.1 percent per annum, and from now on up to 2025 that the growth
rate of this business will rise by an average of 6.9 percent per annum. In other words,
it is natural to expect that airlines are expanding the fleets and their own capacities of
shipping mode for exports, considering the continuing increase in airfreight tonnage
Most people are aware that the goods transported by airfreight are items of high value
requiring an on-time and secure delivery service especially for some exported goods
such as hard disk drives, spare parts, gold and silver, fashion apparels etc., or even
perishables and vegetables themselves that are very time-sensitive. Airfreight charges
are relatively high. Any costs incurred due to shipment delays are equally high.
Shipment delays would result from missed flights, commonly known "offloaded".
The company which is the subject of this study is an international airline with its
both passengers and cargoes. Nowadays the company operates more than 40
passenger aircraft serving more than 40 major cities across USA, Europe and Asia.
The company has operated its business in Thailand since 1992. The average annual
passenger services and 60% from cargo services. To serve passengers' needs, the
1
TIM ASSUMPTION TYNTVERSITYTrr
company differentiates the service into economy class, deluxe class and business
class. In relation to cargo business, the company carries high value and sensitive
items, such as hard disk drive and significant electronic parts, approximately at 70%
of total capacities; 20% is devoted to perishable cargoes and the remaining 10% to
garments. The company's key customers are global big-name freight forwarders
such as UPS global service, DHL forwarding express, Panalpina, Agility Logistics
and CEVA freight logisticis and Schenker,. who represent global accounts such as
Western Digital, Seagate, IBM, Celestica ,Nike, Saralee, and Nautica. The annual
tonnage capacities have expanded by 13.6% from Year 2005 (20,296.23 tons) to Year
2006(23,063.9 tons); and 17.6% from Year2006 (23,063.9 tons) to Year 2007(27,134
tons), while the entire exporting business in Thailand has also enjoyed growth.
Presently, the company has developed a good reputation among its customers in terms
The next section will briefly describe the air cargo operation in the case-study
company.
2
In an air cargo operation, there are three main parties concerned, including agents
(freight forwarders); Thai Airways (TG) ground handling and the Airline start with
agents (freight forwarders), whose responsibilities are to pick up the goods from
factories (shippers), move the goods to the airport terminals, and prepare export
documents. When the goods flow into areas of the airport terminal, they are moved
into various operations such as shipment weight area, staging area, ULD built up
areas, and collecting document area, which are handled by the Thai Airways (TG)
intermediary which transfers flows between agents (freight forwarders) and airlines.
Therefore, before the goods are loaded completely into airplanes, the last processes
are that Thai Airways (TG) service cargo has to coordinate the airlines which are
goods after being built up into ULD, the IT system coordination between Thai
Airways (TG) and airlines, etc. Whenever these processes are completely done, the
cargoes are moved and loaded into the airplane as together with the required export
The company has received serious complaints from its customers regarding the
problems of offloading which occur when the shipment misses a flight (Luo and
competing airlines. As a result, the company has suffered from a drop in revenues,
As studied by research, the company has experienced service complaints from their
3
"offloaded". The existence of the problem affected the business through decreased
revenues and long-term negative image. Although ad-hoc solutions are implemented
on a daily basis, they are not the most effective and efficient way to resolve the
original problems. Based on the company record in 2007, the levels of service failure
as a percentage, show the obvious results of mis-flights especially in peak months and
compared with the company's service level standard of 97%. As a result, the
company itself could not reach its set service level, because of a difference of 5.5%
which has an estimated value of 100miilion baht a year. In addition, there have been
compensation claims for damage which occurred because of missing flights, and the
Month Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec Total
Non- 1,30 1,23 1,44 1,081 1,143 1,211 1,567 1,332 1,643 1,843 1,74 1,486 17,03
Offload 0 8 8 4 6
shipment
shipments
Total 1,32 1,25 1,76 1,109 1,173 1,451 1,854 1,634 1,843 1,882 1,84 1,501 18,62
shipments 0 0 5 7 9
Standard 98% 99% 82% 97% 97% 83% 85% 82% 89% 98% 94% 99% 91.45
Level %
(97%)
• To study the existing air cargo handling operation of the case airline
• To determine the problems occurred and the causes of the problems associated
4
1.4 Scope of the Research
activities of air cargo handling, which are seen as how people, process and technology
are synchronized and practiced in this area. Therefore, this operational process starts
from the goods inflow into cargo handling through various interrelated activities
measurement area; ULD built up area until the end of the process when the goods are
delivered at the origin point at Bangkok airport. The BPR method is applied in this
• Customer concerns
• Long-lead time
• To understand the associated problem and factors affecting the air cargo
industry
.5
CHAPTER 2
characteristic goods in parcel or packing, and documents as well as postal items, from
respond to the intense demands. Also, modern and advanced equipment is brought
into use in order to increase the effectiveness and efficiency of the airport operation.
Investment in this business field involves a lot of money, and there must
• Management Efficiency
6
• Limitations
business shut-down.
Referring to theses as well as many articles from the Emerald site, there are various
techniques used to improve the operational activities of the different natures of each
organization. In other words, the most effective and suitable tool considered for use
other various techniques are used such as 7 management tools and Benchmarking,
means making things better, not just fighting fires or managing crises. It means setting
aside the customary practice of blaming people for problems or failures. It is a way of
performance such as cost, quality, service and speed (Subramanian et al.(1999). The
7
provIme
Implement Continuously
Reengineered • Initiate Ongoing
Design To-Be processes measurement
Processes • Evolve • Review
• Benchmark Implementation performance
Map & Analyze As- processes Plan against target
Is • Design To-Be • Prototype & • Improve process
Process processes simulate continuously
• Create Activity transition plans.
Prepare for • Validate To-Be
BPR Models processes • Initiate training
• Create Process programs
• Build Cross • Perform Trade-off
functional Models • Implement
Analysis
team • Simulate &
• Identify Perform ABC
Customer • Identify
driven objective disconnects &
• Develop value adding
Strategic
Purpose
This first level of the Business Process Reengineering (BPR) process involves cross-
functional cooperation and significant changes to the status quo. The planning for
organizational changes is difficult to conduct without strategic direction from the top.
. Another important factor to be considered while establishing the strategic goals for
the reengineering effort is to make it the first priority to understand the expectations
of customers and where the existing process falls short of meeting those requirements.
done, and a well-defined vision will sustain a company's resolve through the stress of
8
2.2.1.2 Map and Analyze the As-Is Process:
Before the reengineering team can proceed to redesign the process, they should
understand the existing process. The main objective of this phase is to identify
`disconnects' (anything that prevents the process from achieving desired results and in
processes. This is initiated by first the creation and documentation of Activity and
Process models making use of the various modeling methods available. Then, the
amount of time that each activity takes and the cost that each activity requires in terms
of resources is calculated through simulation and activity based costing (ABC). All
the groundwork required having been completed; the processes that need to be
The objective of this phase is to produce one or more alternatives to the current
situation, which satisfy the strategic goals of the enterprise. The first step in this phase
organization's processes and the way those processes are conducted with relevant
peer organizations to obtain ideas for improvement. The peer organizations need not
be competitors or even from the same industry. Innovative practices can be adopted
from anywhere, no matter what their source. Having identified the potential
improvements to the existing processes, the development of the To-Be models is done
using the various modeling methods available, bearing in mind the principles of
process design. Then, similar to the As-Is model, we perform simulation and ABC to
analyze factors like the time and cost involved. It should be noted that this activity is
an iterative process and cannot be done overnight. The several To-Be models that are
9
finally arrived at are validated. By performing a trade-off analysis the best possible
The implementation stage is where reengineering efforts meet the most resistance.
application of problem solving skills. Continuous improvement (TQM) and BPR have
always been considered mutually exclusive to each other. But on the contrary, if
fact Continuous improvement (TQM) can be used as a tool to handle the various
problems encountered during the BPR effort and to continuously improve the process.
In corporations that have not adopted Continuous improvement (TQM) culture as yet,
The next section describes various methodologies and tools applied in each step of
BPR. Thus, there are Seven Management tools and Benchmarking techniques
Marrelli (1998) stated that Process mapping is the step-by-step description of the
actions taken by workers as they use a specific set of inputs to produce a defined set
of outputs. The resulting process maps depict the inputs, the performers, the sequence
of actions the performers take, and the outputs of a work process in a matrix or
10
THEASSUMPTION 'UNIVERSITY T /t A
flowchart format, usually combining both words and simple graphics. The maps may
also include the elapsed time required to perform each step, the feedback the
mapping is also known as system task analysis, process task analysis, process
diagramming, and work mapping (Langdon, 1999, 2000; Marrelli, 1998; Siever,
1993; Swanson, 1994; West, 1997). Depending on the span of the process of interest,
complex entity such as a business unit, a series of maps may be produced beginning at
the highest level, for example, the business unit, and then proceeding to lower levels
such as division and work group (Langdon, 1999). Process mapping is typically
especially knowledgeable about the process. This group often includes the process
owner, top performers, and representatives of each work group that participates in the
process. The facilitator prompts the group to define the work groups involved, the
process inputs and tasks, the sequence of tasks, the resulting outputs, and any other
elements of importance.
work support, ineffective communication and workflow, and other obstacles that
impede the performance of work (Langdon, 2000; Marrelli, 1998; West, 1997).
11
THE ASSUMPTION UNIVERSITYTIM "'
Process mapping can be an excellent data collection method for identifying job duties
and tasks because in defining a work process we are describing the specific actions
each person takes. It also offers a systemic view of work, so we see each employee's
work in the context of the complete workflow and interactions with others rather than
Process mapping can also provide an efficient technique of data collection for
competency modeling. Langdon (2000) suggests using each element described in the
process map as a framework for competency identification. After the process map is
completed, a small group of top performers identifies the competencies needed for
each element (e.g., inputs, process steps, feedback). For example, for each process
step, the performers name the competencies they need to successfully execute that
A process map can be an excellent approach to identifying the content that should be
provide a clear and concise blueprint for content. As a quick overview of a process,
to understanding the current "as is" state and a detailed, visual guide to areas for
12
improvement (Langdon, 1999, 2000; Marrelli, 1998; Siever, 1993; Swanson,
West, 1997). As the project continues through the design stage, process mapping can
be used to develop a prototype of the re-design and check its effectiveness (Marrelli,
1998).
2.3.1.6 Communication
their consequences when they see visual depiction. The data collected in process maps
are often more compelling to executives and managers, for example, than a narrative
report or an oral presentation. They often seem to more quickly grasp the nature of
performance challenges and their negative impact when they see a process map.
disadvantages.
2.3.2.1 Advantages
situation, because the map highlights the interactions of several individuals or work
groups and how the work of one entity is affected by the work of another.
• Creating the maps guides one through a thorough step by- step appraisal of a
performance situation.
• The mapping technique can be adapted to studying the work of entire organizations
13
• Employees are usually very comfortable describing their work processes and do not
• Completed process maps can also serve as effective educational and communication
tools.
2.3.2.2 Disadvantages
• Process mapping typically is based on input from only a small group of employees.
However, wider input can be achieved by circulating the draft map to a larger group
• It requires a high level of facilitation skill to guide a group through the process
mapping exercise.
• Persons who do not like working with detail can find it very difficult to sit for the
• As with most data collection methods, the quality of the data collected depends
Cohen (2003) studied the service delivery improvement of Lufthusa cargo airlines in
Norway. This study conducted a critical analysis of the operational process of SAS
cargo handling which manages the operational handling services for Lufthunsa cargo
airlines. The researcher found that the mismatch in objectives between Lufthunsa
cargo and SAS cargo was due to Lufthusa's goal being to perform delivery service to
98% but the SAS cargo level of delivery service was measured at 95%. Therefore,
this thesis conducts the BPR method to improve delivery accuracy in cargo
14
operational handling and there are various methodologies and techniques to be
However, the author has applied BPR into 7 steps according to by Khan (2000). These
steps start with defining the process; observing the process; collecting process related
handling flows from Lufthusa and SAS cargo handling. Also, the analysis of process
uses many tools like Seven Management tools and Benchmarking to compare with
During the research, the author has examined the export and import process flow of
cargo operational handling which are divided into the following functions.
Firstly, the export the handling flow measure process functions consist of
Consequently, RCS in the export handling flow and RCF and NFD in the import
handling flow are the factors affecting delivery accuracy. Thus, five criteria are used
15
1. Elimination of work time wasted by PCR performance correction
Therefore, RCF is the most critical area of the problems which occur and has potential
for improvement. The author has used the process of RCF which is divided into two
Meanwhile, these two critical areas are caused of delayed goods, due to the ULDs
which are brought directly to the ULD port and the belly wagons are parked outside
the terminal. There is no priority system or method of allowing to see if one belly
wagon is more urgent then another. Consequently, shipments of high priority are
stations is performed to identify all causes of delays and get a better understanding of
the correlation between irregularities and delays. As a conclusion, the following three
• Eliminate the manual check-in of all shipments in the ULD. Instead, use an IT
separate shipments.
16
• Today, shipments are not systematically picked up by the check-in staff
checked in.
• Eliminate the high work load during rush hour. Increase the flexibility to
17
CHAPTER 3
RESEARCH METHODOLOGY
Research problem
Scope of research
Mapping: As Is Process
Analyze: As Is Process
Identify: To Be Process
18
3.1 Mapping "As-Is process"
The purpose of this step is to understand the current processes and associated
problems which occur in the cargo handling area. Process Mapping is a technique to
visualize and understand the process. When the process has been documented, it is
approach in this study as well as the company profile's supportive information to see
the significant characteristics of the company business; the nature of service provided
to various customer etc. In data collection, two staffs w ere interviewed; one
interviewee is a supervisor warehouse officer who gets involved with the operational
handling process. One other interviewee is directly involved in the document section.
pass on their experience with their related job processes. Observation tools are used
to see how staffs in the bottom lines act and respond in their related working and are
able to understand very complicated activities in those areas. This process was used
several times around two months to get all data completed until draft mapping was
19
Agent
•
Loading Area Manifest
Work
Main Process Export EVA
Key:
EVA Cargo
Agent
Reweight ULD Document Office Operations
Area Handling Warehouse Operations
Flight Loading
Ready
The main export flow of processes is related to the three major parties which are
Therefore, the operation handling process starts when agents 'their consolidated
goods go in. There are four main significant areas of handling shipment flow
(Docking; Weigh; Loading; ULD reweigh and Transfer area). Handling the document
flow is separated into four main areas such as registration; load planner; manifest
work; document handling and flight operation. The functions on the left of Figure
3.2 represent the handling shipment process which shifts goods to another department
until final completion. Almost at the same time, the handling documents process is a
parallel line on the right from an initial one sequence shift to another until the end of
20
the internal document function. Meanwhile, the final completion must be finished
The purpose of this section involves an analysis of the existing process and identifies
support and analyze the found causes. Therefore, techniques to be covered in this
section are a tracking method, and the found causes are analyzed by a cause and effect
diagram in which fishbone' is applied in this process to understand the root causes.
Data collection took two months, the same as the first process, and data collection is
Initially, two operational staffs were assigned to be observers. The first observer was
assigned to measure the time shipment inflow takes through various internal activities
within the handling shipment area until goods outflow and is delivered to aircraft.
Meanwhile, another observer went to the documents section to measure the time taken
from the acceptance area through interrelated activities until completion and delivery
to aircraft. Time variances in each area were collected and classified as waiting time;
processing time and defects. In addition, the interviews were informative to find out
the existing problems in that area. The data collected by observation and interview
technique are analyzed to find out the problems in those areas as well as finding the
21
3.3 Identify the "To-Be process"
The purpose is designed to find one or more selected areas of existent problems as
well as depth analysis to find their actual causes. The experimental interviews with
understandings of those causes, while figuring out the optimal point of process
improvement. Therefore, after root causes had been analyzed in the previous step,
one or more selected areas were identified to find their causes and they were further
studied in depth as the analysis progressed. In this section, our assumption using a
basic computation can be proof that causes are facts. In addition, check sheets are
The purpose of this step is to propose solutions to the problems uncovered. Different
interviews as well as related techniques applied to the last step, such as KPI
22
CHAPTER 4
DATA ANALYSIS
This part is included about the analytical processes and logical system thinking to be
able to understand their various problems occurrence in air cargo handling operational
areas as well as finding the root causes. From data collection in many previous steps,
these following are translated into various outputs based on technique used in this
project.
This step is described about the current mapping which uses flow chart technique. As
every process from initial point to final completion. Hence, the processes are
classified as handling documentation flow and handling shipment inflows which their
activities are parallel and almost at the same time completion when until
transportation to aircrafts side that ends process. Let' see more explanation about
23
-
iszAs.,ItninYnownivrnsrrYvnutpr
Agent
1) Receiving
documents
from agents
REGISTRATION AREA
Not 2),CheCit-'
Cargo
Accepted
document
fAwoivveigh SS
Verify
3) add„„.
3) Input dates ,-.
Check cargo NO Not
into Spot „physically Accepted
system Wdh deliverer'
WEIGH ARE
YES
4) Transfer 4) X ray
documents to 4) Issue cargo (if
flight acceptance required) and
operation &Weigh Slip Weigh cargo
5) Move the
5) Is it • goods into
Not NO transferring
corrected
Accepted area
"information-?'
6) Distributed
6) Closed their goods
Manifest in into airline
flights area
LOADING AREA
DOCUMENT HANDLING
yVerify and,
...."---checK cargo Not
7) Document ,,,physically by — Accepted
handling Night loader.
r"
YES
1.3
9) Build up
9) F ight cargoes into
Operation ULD Pallets
9) Issue
acceptance
documents 8. 9) Reweigh
reweigh slips ULD pallets
10)
Transferring
point
AIRCARFT AREA
11)
Aircraft
side
12yeteCileckc,
Not " cargo/ULD
Accepted
Flight Igader
lyEs
Ready
24
4.1.1 Handling shipment process
When the drivers load the shipments into the airport terminal, they are assigned a
docking number in order to offload the shipments into the TG handling area. In this
and load the racks themselves. Then, their shipments are pulled into the provided
The shipments have to be verified physically in this area whenever proceedings are
completed in the previous process; also, irregular shipments are rejected and have to
wait until the correct completion. Therefore, TG staffs are responsible for issuing
The latter processes are fully the responsibility of TG staffs as the shipments are
allowed to be pulled into the loading area after previous proceedings have been
approved. Hence, at the initial step, the shipments are held down in one given area in
order to wait suitable times to transfer into each airline's area. These shipments
proceed on a 'first come and first served' basis in this area in order for easier finding
and storage. Again in this area, the goods inspection is done by TG staff in order to
have more security. At the same time, if the goods are found to be irregular, they are
Afterwards, each shipment is built up into ULD pallets of airlines: TG staffs are
25
The consolidated goods which are built up into ULD pallets are stored at a
transferring point to await a suitable time. Meanwhile, during this time, they are
rechecked once again for security and safety. Later, these consolidated shipments are
ready to load onto trolleys and they are prepared for transfer to the aircraft side.
When TG staff issue weigh slip in the weigh area, freight forwarders (agents) provide
the documents, like (MAWB, HAWB, Invoice Packing List, Form A including
attached weigh slips) in order to register in this area. This process starts by receiving
documents and rechecking documents as well as inputting data into IT (Spot System).
If there are any incorrect documents during this rechecking point, they are rejected
Next, various documents in the previous process are sorted in this area, and are
distributed to each flight planners responsible for each airline. Flight planners are
responsible for collecting completed documents and rechecking the actual weigh and
After finalized closing of flight Manifests, flight operation officers collect the
completed document and wait for a suitable times to send these document to the
26
4.1.2.4 Aircraft Area
This is the final process before the flight departure. After the consolidated goods are
transported into the aircraft side, the flight operation officer is responsible for
rechecking the correct amount of pallets as well as the outer inspections to see
whether or not they are in good order. Almost at the same time, completed
This section analyzes the found causes. Various methodologies are applied, such as
tracking, cause and effect diagram, and data is collected using interviews and
observation techniques. The input data from twenty five random shipments are
27
5= TANDARDTIME
W= AITING TIME
P= ROCESS TIME
D = DEFECTS
S = S ATISFACTORY
U= SATISFACTORY
Order Flow
L5w waiting goods approved into gale area R8w waiting consol shipment
L5p offloaded goods into transfer area R8p buil up cargoes into pallets
3)Loading Area L6w Forklifl on the way 4)Reweight ULD Area RElw waling Queue
LOP offloaded goods into aidines area R9p weigh OLD and Issue doc
L7w waiting loaded
Up recheck the goods/ the outer boxes
Al lw traffic time
lOw waiting Queue All p receive cargoes
5)Transfer Area 10p recount the pallets no fitAircratt Area Al2w wa4ng Queue
Al2p recheck the pallets in last stage.
Figure 4.2 Tracking Method By shipments, waiting time; process time; defects
wait time, processing time, and defects. Therefore, every step in measurement begins
at the initial process until the process is completed. As seen in the input data in the
Table above, there are six main areas being measured in time. Meanwhile, each
shipment must have a time completion within 9 hours. Otherwise, the results show as
negative or unsatisfied. The results above show that there are 5 unsatisfied shipments
out of a total of 25 shipments, which means more time spent that is the set standard.
28
Likewise, in the input data of handling documentation in the Table below, time
measurement is the same pattern as handling shipment process. For the handling
documentation process, the time record is measured when th weigh area of handling a
shipment finishes. As a result, the record shows that there are 5 unsatisfied shipments
S= STANDARD TIME
W= WAITING TIME
P= PROCESS TIME
D= DEFECTS
s SATISFACTORY
= UNSATISFACTORY
Document Flow
REGISTRATION LOAD PLANNER & MNFST HANDLING FLIGHT OPT. AIRCRAFT TOTAL TIME
S .1 HRS S = 2 HRS S =1 HRS S = 1HRS S = 1 HRS GRAND Results
Random
RI 112 FI3 L4 L5 Lfi DI F8 All Al2 TIME
W P W P D W P W P W P D
W P W P W P W P W P D W P D
1 12 2 3 2 - 3 2 75 2 10 3 -
10 5 5 35 3 45 5 15 5 20 • 2.2 22 - 4.4 S
2 12 2 5 2 - 3 2 75 3 10 3 10
- 5 5 35 5 50 5 15 5 29 - 2.3 23 - 4.5 S
3 12 2 3 2 5 2 89 3 10 3 10 5 5 40 5 50 5 15 5 25 - 2.5 2.5 • 4.9 S
4 15 2 5 2 5 2 80 3 10 3 10 5 5 40 5 50 5 10 5 25 - 2.4 2.4 - 4.8 S
5 20 2 3 2 - 3 2 80 3 10 3 - 10 5 5 35 5 50 5 15 5 25 2.4 2.4 - 4.8 S
6 15 3 3 2 3 2 80 2 7 3 40 10 5 5 35 5 45 5 15 5 25 2.3 2.3 0.4 5.0 S
7 15 3 3 2 3 2 83 2 10 3 - 15 5 5 45 5 50 5 15 5 30 3.2 34 - 66 U
8 15 2 3 2 5 2 55 2 7 3 10 5 7 40 5 35 5 15 5 20 20 21 4.1 S
9 15 2 5 2 5 2 60 2 7 2 10 5 7 35 5 45 5 15 5 20 2.1 22 42 S
10 15 2 5 2 5 2 60 2 10 2 10 5 7 35 5 40 5 15 6 29 21 21 42 S
11 15 2 5 2 - 5 2 BO 3 10 3 - 10 5 7 30 5 40 5 15 5 29 • 25 2.0 - 4.5 S
12 15 2 5 2 - 3 2 BO 3 10 3 - 10 5 7 35 5 55 5 15 5 25 4.4 2.5 - 6.9 U
13 15 2 5 2 - 3 2 80 3 10 3 - 10 5 7 40 3 55 5 15 5 30 - 3.3 3.2 6.5 U
14 10 2 3 2 3 2 80 3 10 3 - 10 5 7 35 3 40 5 15 5 25 • 2.3 2.2 4.5 S
15 10 2 7 2 3 2 80 2 10 3 - 15 5 5 45 3 55 5 15 5 25 2.4 2.6 - 5.0 S
16 10 2 7 2 5 2 85 2 10 3 40 15 5 5 45 3 40 5 15 5 20 25 2.3 0.4 5.2 S
17 10 2 7 2 5 2 BO 2 10 3 40 15 5 5 45 3 30 5 10 5 25 - 2.4 2.1 0.7 5.2 S
18 10 2 7 2 5 2 80 2 10 2 - 15 5 5 40 3 55 5 15 6 30 35 2.9 - 6.4 U
19 10 2 7 2 26 3 2 BO 2 10 2 - 15 5 5 40 3 50 5 16 5 25 24 24 4.8 S
20 10 2 3 2 28 3 2 BO 2 10 2 - 15 5 5 40 3 55 5 15 5 25 - 2.3 2.5 - 4.8 S
21 15 2 3 2 - 3 2 80 3 10 3 - 10 5 5 40 3 45 5 15 5 20 - 2.3 2.3 - 4.6 S
22 15 2 3 2 - 5 2 60 3 10 3 - 10 5 5 40 5 45 5 15 5 20 • 3.0 2.3 - 5.3 S
23 15 2 3 2 5 2 80 3 10 3 120 10 5 7 35 5 40 5 15 5 30 2.4 2.3 20 6.7 U
24 15 2 3 2 5 2 BO 3 10 3 - 10 5 7 40 5 35 5 15 5 20 2.4 2.1 - 46 S
25 15 2 3 2 5 2 130 2 10 3 - 10 5 7 45 5 35 5 15 5 26 24 23 4.7 S
R1w wailing issued weigh slip L4w wailing for pick up doc
Rip Payment 2)Loa4PIanner & L4p collected/ classified doe by flight operation
1)Registration Area R2w waitng Queue Manifest L5w waiting Queue
R2p recheck dod AWE/weigh slips L5p Recheck actual weigh with don
R3w waling Queue Lbw wailing Queue
R3p input data into IT system Lbp Closed doc by departure flight
AI 1w waiting Queue
5)Aircraft area Al 1p recefie document
Al2w waiting Queue
Al2p recheck the doc before the flight departure.
Figure 4.3 Tracking Method by Documents: wait time; process time and defects
29
Finally, Handling shipment and documentation must be finished covered in a given
period of time, as in the set standard. If either takes more time than the set one, the
12 S U U
13 U U U • SATISFIED
14 U S U 17 UNSATISFIED
15 S S
16 S S
64%
17 S S
10 S U U
19 S S
20 S S
21 S S
22 U S U
23 U U U
24 S S
25 S S
As a conclusion again, the output indicates that there are 36% unsatisfied, while 64 %
are satisfied concerning the time factor. An error of 36% has been valued as a loss
Later, the next following steps are diagnostic of various problems and they are
logically analyzed to figure out root causes which refer to the cause and effect
diagram. Preceding this process, interviews of the person in charge in each area are
used to get insightful understandings of the existing problems in each specific area.
Therefore, with a cause and effect diagram, it can be seen that the main problem in the
whole processes is delay time, and that cause is detected and analyzed in each process
30
consequently. The problems of delayed shipments and documents are identified and
Delaying shipments can be identified to the problem in a root causes analysis in each
area.
Problem: The entrance is full of traffic at evening time between 02.00pm — 07.00pm
when vessels load with goods into the D1 area at the same time. This affects the
Causes: Goods are not fixed to a certain schedule of time in and time out.
31
4.2.1.3 Loading area (L7)
Causes: Person in charge is unspecialized. This area must select experienced staffs to
Problem: In the R8 area exists the problem of overstock during peak times, as well as
in this area it is more frequent to find damaged records and missing goods
Causes: The number of persons in charge of this area is insufficient at peak times.
Meanwhile, the consolidation method is disadvantaged when one has to await another
Problem: Al2 area sometime faces collapsing ULDs on the way to the aircraft side.
In addition, identified problems and found causes are diagnosed in document areas
Problem: Almost all the time, R1 area wastes times because of queues.
Problem: In this area job duplications exist and the process is bottlenecked.
Causes: Staffs are inexperienced and they do not follow their job procedures.
32
4.3 Identify "To Be" process
This section is about the process of selecting the most critical areas as well as a depth
analysis in that area. Thus, based on analytical proceedings from the previous steps,
two critical areas have been chosen which have the most effect on the whole process.
The first critical area is ULD reweigh, as this is the main key of the shipment process
as well as Load planner and Manifest work is the second critical area of document
process. The chosen reasons are to spend more times on processes, and there are big
gaps of waiting time between processing times. In addition, high defects are more
significant to progress an analysis. For further study in this section, the technique used
understanding of the existeing problems. In addition, a check sheet is one tool that
helps us to detect the actual causes. The Tables shown below are the final outputs of
33
4.3.1ULD Reweigh Area (R8)
By Order
Type of irregular Day1 Day2 Day3 Day4 Day5 Day6 Day7 No.
Packing Damage II I II 5
Missing Goods I I II 4
5 3 2 1 4 7 4 26
By Time Type of irregular Day1 Day2 Day3 Day4 Day5 Day6 Day7 No.
T .e of irre.ular
Consolidation Da 1 Da 2 Da 3 Da 4 Da Da Da 7
Order 1 35 - - - - - - - -45
- - - - 1 - - - -30
---- 1 35 - - - 1 - - - -55
- 1 30
1 1 30
Order 2 25 I 35 40 40 1 10
Order 3 40 40 1 30 1
Order 4 30 1
Order 5 35
Packint Damar e Da 1 Da 2 Da 3 Da 4 Da Da Da 7
Order 1 10 15 5
Order 2 5 5
Order3
Missin Goods Da 1 Da 2 Da 3 Da 4 Da Da Da 7
Order 1 30 30 25
Order 2 20
Order 3 +----- ----+----
Based on the tracking method as well as related tools like check sheet, it can explain
the main causes in the chosen area, of which the first Table above is a conclusion
from the ULD reweigh area (R8) that the most frequent cause comes from many
consolidated shipments, and packing damage and missing goods are the second and
third causes to be found in this area. Meanwhile, the most significant errors affecting
most of the waiting time is the process of consolidation, from our tracking of
shipments in one week, as seen in the second Table. So far, with continued analysis
based on a basic tracking method, the job quantities have been compared with regular
34
TIM ASSUMWION IINIVERSITirLTIM A
working hours in order to see the errors. As a result, jobs in this chosen area are quite
Based on interviews, at the present time two teams in this area are responsible for
building up their goods into ULDs. Each team has 3 individuals. There are 2 shifts.
The morning shift begins at 8.00 am, until 16.00 pm. The night shift begins later from
17.00 pm to 03.00am. The observed records the amount of arrival shipments every
hour; also the time taken in each period of time. Hence, results show that the actual
working hours used are more than total time amount of job numbers, as seen in the
conclusion Table below. It means that job overload in this area also affects too much
Day 8.00 AM 9.00AM 10.00AM 11.00AM 12.00PM i 1.00PM 2.00PM 3.00PM 4.00PM 5.00PM 6.00PM 7.00PM 8.00PM 9,00PM 10.00PM 11.00PM 12.00PM 1.00AM 2,0041 3.00AM Total
1 5 7 5 7 5 8 12 15 12 12 10 15 10 12 8 5 2 2 2 1 155
2 5 5 5 7 5 10 12 10 15 12 12 15 12 12 7 5 2 2 1 1 155
3 5 1 5 5 7 8 15 15 12 12 15 12 13 15 8 5 2 1 1 2 165
4 5 1 5 5 7 12 15 15 15 12 15 15 10 12 7 5 1 2 1 2 168
5 5 5 5 5 7 8 13 12 13 12 15 13 15 15 8 5 2 2 2 2 164
6 5 7 5 1 5 8 15 15 15 15 12 15 12 15 7 5 2 2 1 2 170
7 5 7 5 7 5 I 10 15 10 15 15 12 10 15 15 7 5 2 2 1 2 165
1 8.00AM : 9.00AM I 10.00AM11.00AM 12.00PM :1.00PM 2.00PM 300PM 400PM 5.00PM 6,00PM 7,00PM ; 8.00PM 9.00PM 10.00PM 11.00PM11ZOOPM11.00A14 ZHAO 3.00AM 4,00AM ,1 5.00A91
1
I
Job Tima 60min. Mind 60min. 60min. 60min. 160min.1 60min. 60min. ' 60min.1 60min. '60min. 60min.I 60min 60min. 60min. 60min. 60min. 160min. 60min.160min.1
. , 60min. 60min
, .
i
Day 1 1 60 1 60 60 1 60 60 1 60 1 120 75 1 45',1 120 1 60 60 60 90 1 30 1 60 1 60 1 60
1 1
Day5 60 : 60 60 1 60 i 60 1 601 120 1 60 60 1 120 60 1 60 1 60 60 60 60 60 60 30 30
35
4.3.2 Load Planner & Manifest area
Document Flow
Current Flow
Registration Area Load Planner and Mnfst
R1 R2 R3 L4 15 L6
MEI
I—1
Thee New Arrival I Balance Totalµ RI R2 1
.. R3 Completed New Arrival Balance Jotal .....I... L4 I L5 L6 4,Comilter
_ld
o
8.00AM 5
5 -1
-4 0 3 i r
9.00AM 5 2 3 -1 0 1
1 1
10.00AM 5 2 7 .1 5 5 2 : 7 - - - - - -1....____/ -1 2 3
11.00AM 8 I 2 5 4 f g 2 I -1 -2 4
12.00AM 8 2 10 6 8 5..................
t 13 .3 I a 1a
13.00PM 10 13 6 o..... 1 1 2 I 2 2 a
1 i
14.00PM 7 i 1 5 13 19 -2 1._. -2 -2 13
15 OOPM 10 3 12 5 6 11 3_4__A
16 OOPM 12 13 12 10 ____22 3 3
17.00PM 10 I 0 9 13 9 1 22 3 I .3
1-
18.00PM 15 14 9 10 I 19 -4 i -5
19.00PM 12 13 14 13 I 27 3 I -4
20.00PM 15 14 13 11 I 24 -3 T .5
1 r 1
21.00PM 15 16 14 13 1..._27._._. .4 1 3
22.O0PM 15 14 16 28 3 I 1_.
23.00pm 14
Eli
Next, the second critical area is analyzed based on the tracking method which was
used in one day to figure out the main causes. From our depth analysis in this area,
the main cause is to enlarge the document size between interconnections at R3 and L4
areas. The data collection is from 8.00 AM to 23.00 PM which is measured by time
every hour to see how mush time is used is from one shift to another. As a result, the
late documents are found when all documents are inside the Load Planner &Manifest
area.
36
4.4 Develop an Implementation Plan
The final section proposes a solution to the problems uncovered as well as figuring
out the optimal improvement. These chosen areas have been analyzed in depth based
on the previous tracking method. The final step is to find out the actual root cause,
Based on experimental interviews, there are three root causes to be studied by depth
analysis, of which the first is different goals in operational handling. The answer is
clear when we have a depth study of KPI measurements. It found that an imbalance
in KPIs between airlines and TG handling has direct effects on the process in this
area due to a lot of operational consolidation with various shipments affected by too
much waiting time. By having different purposes, of Airline and Handling, in terms
of weigh utilization, the gap is a difference of 2%, of which airlines accounted for
97%, while handling accounted for 95%. Also, secondly is the issue of low salary
and social benefits, which manifests in a high turnover rate and it becomes a main
cause when the current job is overload with staffs. In addition, thirdly it is related to
unspecialized labor which is causing damage to goods and many errors. Therefore,
these root causes lead to a weight loss of 14 tons; a sales loss of 1.33 million baht, and
with compensation having to be paid for claims. The Table below is the weekly
37
No. of shpt
offload Day Utileighkgi Selling rate Baht
1 1 500 90 45,000
6 2 500 95 47,500
7 2 700 95 66,500
11 3 100 95 9,500
12 3 100 95 9,500
13 3 500 95 47,500
14 4 500 90 45,000
15 4 500 45,000
16 4 500 47,500
17 4 500 47,500
18 5 1000 90,000
19 5 1000 90,000
20 5 500 45,000
21 5 500 90 45,000
22 135,000
23 80,000
24 6 500 47,500
25 7 SOO
31 95
Total 95
Meanwhile, the actual root cause is that staffs still keep to their traditional work
processes. There is no intention to redesign new processes into their own job duties.
This leads to late documents and this behavior affects much waiting time in the
process. Also, a big gap is found between interconnection between one area shift to
38
However, based on our basic computation, it can be explained that if the first area of
understand the same direction; and also training. The costing decreases to 11,250
baht a week compared with compensation paid costing 26,600 baht a week.
Meanwhile, it can keep sales revenue and utilizing the weight in balance. In other
words, for the second problem area, the better improvement is to reduce waiting time
every 30 minutes by changing working attitudes and perspectives. This makes the
documentation flow smoother than the current process because of waiting reduction.
COMPUTATION
Day1 60
D ay2 90
Day3 110
Day4 110
Day5 60
Day6 60
D ay7 110
Total 600 Ainutes
39
CHAPTER 5
In this section, the conclusion is that management by people and methods are the most
necessary to improve first. In both critical areas, people are more vital to reduce the
teams to understand the same goals, and to provide personnel training are another way
to increase their work abilities. In other words, it is another thing to manage the
solution. Small lot size helps to reduce errors and time. In fact, theories mentioned
above can reduce errors in terms of time and cost while increasing work efficiency.
Therefore, the offloaded problem can be relieved due to the fact that the main cause is
time delay.
uncovered, and does not include implementation. Meanwhile, this project will be a
guideline to understand the found problems of air cargo operational handling and the
40
REFERENCES
Books:
Jittangwatan, (2005). Airlines Business ISBN:974.
Articles
Anne F.Marrelli, CPT, PHD (2005). The Performance Technologistics Tool Box:
Process Mapping. Vol.44. Number 5.
Langdon, D., and Marrelli, A.F. (2002). A performance-based model for competency
identification: The workshop.Bellingham, WA: Performance International.
Luiz C.R. Carpinetti and Alexandre M.de Melo (2002). What to Benchmark? A
systematic approach and cases, Department of Mechanical Engineering, School of
Engineering of Sao carlos —USP, Sao carlos, Brazil.
Magnus Cohen (2003). How to improve the Delivery Accuracy in the Cargo
Handling, Master of Science Programme, Department of Busines Administration and
Social Science, Division of Industrial Logistics. ISSN:1402-1617.
Mizuno, S., ed. (1988). Management for Quality Improvement: The 7 New QC Tools,
Productivity Press, Inc., Cambridge MA.
Nayatani, Y., T. Eiga, R. Futami, and H. Miyagawa (1994). The Seven New QC
Tools: Practical Applications for Managers, Quality Resources, White Plains NY.
41
Subramanian Muthu, Larry Whitman, and S. Hossein Cheraghi(1999) Dept. of
Industrial and Manufacturing Engineering, Wichita State University Wichita, KS-
67260 0035, USA.
Swanson, R.A. (1994). Analysis for improving performance: Tools for diagnosing
organizations and documenting workplace expertise. San Francisco: Berrett-Koehler.
42
APPENDICES
S= TANDARDTIME
W= AITING TIME
P= ROCESS TIME
D= DEFECTS
S = ATISFACTORY
U= SATISFACTORY
Order Flow
L5w waiting goods approved into gale area R8w walling consol shipment
L5p offloaded goods into transfer area R8p boil up cargoes into pallets
3)Loading Area L6w Forklift on the way 4)Reweight OLD Area R9w waiting Queue
L6P offloaded goods into airlines area R9p weigh ULD and Issue doc
L7w waiting loaded
L7p recheck the goods) the outer boxes
45
S= STANDARD TIME
W= WAITING TIME
P PROCESS TIME
D= DEFECTS
S= SATISFACTORY
U= UNSATISFACTORY
Document Flow
REGISTRATION LOAD PLANNER & MNFST HANDLING FLIGHT OPT. AIRCRAFT TOTAL TIME
Rlw waiting issued weigh slip 14w waiting for pick up doc
R1p Payment 2)LoadPlanner & L4p collected/ classifed doc by light operation
1)Registration Area R2w waitng Queue Manifest .5w waiting Queue
R2p recheck doclAWB1weigh slips ISp Recheck actual weigh with doc
R3w waling Queue 16w waiting Queue
R3p input data into IT system L6p Closed doc by departure flight
46