ARSA Symposium. Art Smith, VP Quality, AAR CORP Jim Ballough, VP CAVOK. March 21, Presented by: CAVOK Oliver Wyman

Transcription

1 ARSA Symposium March 21, 2014 Presented by: Art Smith, VP Quality, AAR CORP Jim Ballough, VP CAVOK CAVOK Oliver Wyman

2 Agenda AAR Assessments SECTION 1 Introductions SECTION 2 Background CAVOK Work Approach Methodology Assessment Types Results in Brief CAVOK Oliver Wyman 1

3 SECTION 1 INTRODUCTION

4 AAR Overview Publicly traded on the NYSE: AIR 61 years as a market leader in aviation support Stable leadership two CEOs in company s history Experienced management team History of safety compliance, consistent profitability and financial strength Diversified revenue stream of ~$2.2 billion Broad-based aviation provider Aviation Services 76% of sales Technology Products 24% of sales 6,700 employees world-wide at 60 locations Certifications ISO registered AS 9100 and AS 9110 certified Civil aviation authority certificates for design and maintenance activities within and outside the U.S. 61 years as a market leader in aviation support CAVOK Oliver Wyman 3 3

5 New Business Segmentation AAR CORP. Aviation Services Technology Products Aviation Supply Chain Maintenance, Repair & Overhaul Airlift Defense Services InTech Mobility Systems Precision Systems Cargo Systems Part 145 repair station certificates 11 within the U.S. 5 outside the U.S. Part 133 and 135 operating certificates 7 EASA part 145 certificates 16 FAA part 145 certificates 3 other CAA part 145 certificates 220+ supplemental type certificates Supplier to civil aviation manufacturing efforts Leverage internal capabilities and encourage cooperation CAVOK Oliver Wyman 4 4

6 CAVOK is a subsidiary of the Oliver Wyman group; a $1.5 billion consultancy within Marsh & McLennan Inc. Leading global management consulting firm $1.5 billion in revenue in 2012 Brand Strategy Consulting Economic Consulting Human Resources Consulting 3,400 employees 50+ offices in 25 countries Four business units with several practices: Consumer & Industrial Value Transformation Financial Services Communication, Media & Technology Manufacturing, Transportation & Energy (MTE) Risk and Insurance Risk and Reinsurance CAVOK is part of MTE s Transportation Practice CAVOK was acquired in 2007 and serves as a highly specialized division within the Aviation, Aerospace & Defense (AAD) practice CAVOK Oliver Wyman 5

7 CAVOK core capabilities are split across six primary areas Certification Program Development & Redesign Diagnostic, design, implementation and validation of new or existing programs Assist new and merging carriers to obtain required FAA certification Maintenance Programs & Reliability Maintenance programs audit/ optimization or full program management Compliance, Quality & Safety Regulatory, quality and safety audits, strategy and implementation Technical Data Auditing & Validation Data cleansing, harmonization and audit services Technical Publications Management Manual content tagging, assessment, authoring and management CAVOK Oliver Wyman 6

8 SECTION 2 REPAIR STATION ASSESSMENTS

9 Project Background A recent audit report was issued by the Department of Transportation (DOT) Office of the Inspector General (OIG), titled FAA CONTINUES TO FACE CHALLENGES IN IMPLEMETING A RISK-BASED APPROACH FOR REPAIR STATION OVERSIGHT. The major focus of the audit was the FAA s inspector s use of the Risk-Based Approach to Repair Station oversight. They also cited FAA inspector training in this area as being inadequate. While a major focus of the audit was the FAA s Risk-Based System, the OIG also uncovered deficiencies at certain repair stations. The issues uncovered were identified in 5 major areas. Overall, the review of 119 randomly selected aircraft work orders in these four areas, coupled with our examination of tools and equipment at each facility, disclosed 92 systemic deficiencies. Based on the results of our statistical sample of 27 repair stations, we estimate that 217,641 (37 percent) of the estimated 589,573 work orders from September 2008 to August 2011 from domestic and foreign repair stations (where FAA performs its own inspections) had deficiencies in these five areas. 1. OIG audit report AV CAVOK Oliver Wyman 2. OIG s estimate of 217,641 has a precision of +/-28,919, and our estimate of 589,573 has a precision of +/-254,066 at the 90-percent confidence level, page 12 AV , page 13 8

10 Work Approach (1 of 2) A three phase assessment that evaluates each facility individually, then aggregates the results in a cross-facility review. 1 Facility 1 Review Regulatory Compliance 2 Facility 2 Reviews Regulatory Compliance 3 Multiple Facility Review 4 Comprehensive Consistency Review Identify Gaps Identify Gaps Regulatory Compliance Multiple Facilities Assess Safety Culture Assess Safety Culture Identify Gaps Documentation Review Individual Facility Report Individual Facility Report Facility Comparison Report Identify Gaps / Differences Facility Consistency Report Regulatory Guidance Facility 1 Facility 2 Facility 3 Facility 4 Facility 5 4 RSQM RSQM RSQM RSQM RSQM TM TM TM TM TM Additional Documentation Additional Documentation Additional Documentation Additional Documentation Additional Documentation CAVOK Oliver Wyman 9

11 Work Approach (2 of 2) Throughout the three phases, CAVOK will follow a multi-step process in order to complete each assessment. The application of this process will be driven by a CAVOK methodology and an initial list of concerns as identified by AAR at the start of this project. 1 Written Procedures Review 2 On-Site Observations and Personnel Interviews 3 Regulatory Assessment Gap Analysis and Concerns 4 Corrective Actions / Recommendations for Improvement CAVOK Oliver Wyman 10

12 Assessment Methodology (1 of 2) CAVOK has developed a set of checklists to guide our facility reviews and streamline observations Our checklists are composed of a series of questions that are answered using a 1 5 rating system Rating This methodology enables a more effective comparison across operations and facilities CAVOK Oliver Wyman 11

13 Assessment Methodology (2 of 2) 1 17 Focus Areas CAVOK has developed 17 focus areas that span the operational and regulatory activities of each AAR facility 2 10 Word Picture Categories Each word picture category is tailored to the corresponding focus area and contains 5 possible answers based on a rating system 3 ~300 Questions CAVOK SMEs utilize an all inclusive list of questions which cover CFRs, SAS, ATOS, EASA, 8900 Guidance, RSAT and Safety Culture 4 Facility Report CFR compliance assessment RSQM compliance assessment Training program compliance assessment AAR company document conformance assessment Safety culture assessment CAVOK Oliver Wyman 12

14 Assessment types Regulatory and Operational Assessment Customer Assessment Safety Culture Assessment CAVOK Oliver Wyman 13 13

15 Results in Brief 2 Facilities Finished, third this week Findings Regulatory and Operational Assessment Customer Assessment Safety Culture Assessment Corrective Actions CAVOK Oliver Wyman

16 Thank You! Questions? CAVOK Oliver Wyman 15