Raytheon claims marked improvement in support

 - April 2, 2007, 10:06 AM

Raytheon Aircraft is proclaiming victory in its ongoing efforts to turn around its customer-support operations, and is now focusing on sustaining that claimed turnaround. Ultimately, the company wants to redefine the way the business aviation industry provides customer support.

“Our strategy as we continue to move forward is going to stay very aggressive,” said Ed Dolanski, v-p of customer support operations. “First, we make exceptional product quality and customer support our number-one business priority. That is not just Ed Dolanski speaking. That is Jim Schuster, my boss and CEO, speaking.”

Since last year, Dolanski said, Raytheon Aircraft has increased its parts inventory by 80,000 items, through an alliance with Aviall, and launched a worldwide inventory network through Raytheon authorized service centers. That resulted in an additional 100,000 parts numbers, including many pieces that are no longer in production, which supplemented the 160,000 parts that RAC already had in stock.

“The message and direction was very clear to us,” he said. “Improve parts availability now. I don’t care if you add more people in the field, put AOG teams in place, get an awesome management team in place…if you don’t have the parts on the shelf you can forget everything else.”

Raytheon Aircraft has reduced the average time to resolve AOG situations from 14 days in September 2002 to 13 hours as of May. During the same timeframe, the parts-availability fill rates went from 57 percent to 94 percent. Meanwhile, warranty claims processing went from 26 days to seven days. And the warranty claims backlog dropped from 3,960 in January 2002 to 1,204 in May.

Holding Suppliers’ Feet to the Fire

Dolanski had high praise for his management team, which won the Raytheon Co. chairman’s award for the best Six Sigma project in 2002. As an example, he cited “systems so broken” that in 200l the total amount of money RAC recovered from suppliers for faulty products was less than $400,000. Last year the company recovered $13.4 million.

A sure way of getting the attention of subcontractors is to make them pay for shoddy work, he added, and that improves the quality of Raytheon’s airplanes. “That’s not beating the supplier up,” said Dolanski. “Their stuff broke. The bottom line is that now they pay us for it. Now they pay attention to the quality of what’s coming to us knowing that it’s going to cost them money [if they don’t].”

As a further result, Raytheon has noticed that mean-time-between-failure rates have improved, failure rates have dropped and the number of telephone calls on the warranty lines fell. “And we’re not doing anything but just holding suppliers accountable now,” he said. “It’s been a very successful program for us.”

Raytheon claims that with more than 100 field and technical experts, it has one of the largest, if not the largest, support teams in the industry. Despite the GA industry’s layoffs and drop in line rates, the company boasted that it had no effect on its field-support teams. In fact, the customer-support organization grew by 13 percent. “In 2001, the budget for customer support was just under $12 million,” said Dolanski. “This year the budget is $17.4 million.”

At a recent press briefing in Washington, D.C., Raytheon Aircraft reiterated that it is focused on being the world’s leading general aviation manufacturer by placing product quality and support as its top priority.

“Our focus in our [support] organization is to continue to shift perception,” said Dolanski. “We are in a battle of perception now. When you have been not so good for so many years, you’ve got to keep doing well over and over and over.”

Raytheon plans to continue strategic relationships with partners and alliances, and it announced at the European Business Aviation Convention & Exhibition in late May that it was opening a major European spares-distribution center at Liege Airport in Belgium.

The 147,000-sq-ft, fully automated facility will completely replicate the parts availability at its Dallas/Fort Worth warehouse, carrying $10 million worth of inventory. It will carry parts for all Raytheon models, including those no longer in production.

Raytheon expects the Liege distribution center to overcome international shipping delays and to provide supplementary capacity to support orders placed through the Dallas center. And with significant European content in its Hawker family, those suppliers will be able to dispatch spares to Liege more cheaply and more quickly than they have been doing to the U.S. warehouse.