TOCICO

In 2005, Delta Air Lines filed for bankruptcy. Prior to its merger with North West Airlines, Delta was a $17 billion sales revenue airline with approximately 50,000 employees. After merger in 2008 Delta was a $35 billion top line revenue airline with the same number of maintenance, repair, and overhaul (MRO) employees. As part of the bankruptcy plan, engine maintenance was required to reduce cost and inventory while, at the same time, increase productivity. In 2002 the MRO had revenues of $77 million and in 2008 the revenues were $470. The requirements for survival aligned very well with theory of constraints--more specifically, critical chain and drum-buffer-rope. The summary of changes includes: create plans with buffers in critical chain and in drum buffer rope; control the work-in-process inventories by controlling release; manage using the buffers, and use exception management. TOC concepts implemented in 2006 were to focus on constraints and improve overall engine maintenance performance using continuous improvement as the growth strategy. Six sigma and lean had previously been implemented. TOC concepts have given a clear understanding of where to apply six sigma and lean methods to achieve true bottom-line results.