Improving Performance and Flexibility at Jeppesen Sanderson
The Problem
Jeppesen Sanderson, Inc. maintains, manufactures, and distributes flight manuals containing safety information for over 300,000 pilots and 400 airlines worldwide. In 1997, a growing line of over 100,000 aviation charts overwhelmed the company's production system. Concerned about the timeliness of Jeppesen's service, the Air Transport Association demanded an "immediate, dramatic decrease in late weekly revision material and new manual orders." Meeting these demands required analytics expertise in modeling complex production processes.
The Analytics Solution
The company, working with an academic analytics professional and an O.R. consultant, established an analytics department that developed optimization-based decision support tools that improved production planning. Concurrently, it developed a method for evaluating investments in production technology.
The Value
The analytics team's work reduced lateness and improved production processes, leading to a decrease in customer complaints, a reduction in costs of nearly 10%, and an increase in profit of 24%. Two years after the analytics department began its work, the company realized annual cost reductions of $3 million and projects future annual savings of $7 million. Late orders went from 35% to zero.
Jeppesen President and CEO Horst A. Bergmann said, "In 1997, we had zero analytics professionals at Jeppesen. Now we have 14. We have learned our lesson."
He added, "You don't have to be a big company to apply analytics techniques. It is very well suited for small and medium-size companies. It can really, really make a difference and significantly enhance your bottom line."
