Personnel, Services, and Goods Supply Lines

– a model-based approach to managing “talent on demand”

Andreas Größler1 and Alexander Zock2

1: Radboud University Nijmegen

2: European Centre for Aviation Development

The case company

© spiegel-online.de

The aviation industry requires

long-term planning

• Example 1: Ordering of AC (Lead Time: 3 – 8 years)

– Investment: 40 – 50 Mio. € per AC (Narrow-Body)

• Example 2: Recruitment of pilots (Lead Time: up to 4 Jahre)

– Investment: 40 – 50 Mio. € for 12 pilots (Crew factor of an AC in Europe)

Misallocation of strategic resources can lead to severe

financial stress for companies in the aviation sector.

In the aviation industry important investment decisions are exposed

to long lead times. It is therefore important to plan carefully.

Long-term personnel capacity planning

Quote Eurocontrol:

• “Manpower Planning (MP) is

necessary to meet the strategic

objective:

„the provision of the right number of staff, with the right

qualification, at the right time and in the right place to meet

business requirements‟”.

Goals of project

• Conduct a structural analysis of the existing long-

term personnel planning process for air traffic

controllers;

• provide a dynamic analysis of the existing planning

policies;

• construct a scenario-tool to improve the existing

planning policies as well as the established risk

management approach accompanying the existing

processes.

A simple SD model of this problem

OperativeATCOs

#ATCOstraining GraduationRecruitment rate

DurationTraining

Recruiting delay

Exit-Rate

Duty life time

Number ofATCos

Gap

Movements

per ATCO

AC movementsGrowth

Growth ratio

The simple model with some extensions

This simple model was

the door-opener for the

project

The model is a very

simplified version of the

planning situation in the

client organization

The major dynamics

produced by the model

was already very

motivating for the client

organization.

Based on this model the

contractual discussion

could be started.

# of required

ATCOs

Operative

ATCOs

ATCOs (not

operational)

ATCO in

Training Graduation

Leave

rate

Recruitment rate

Duration of

Training

Gap

Movements

Per ATCO

Recuitment delay

Exit-Rate

Duty life time

AC movements

Growth rate

Rate of

reactivationRequired Trainers

Trainers required

Per ATCO

Trainer-Gap

Growth ratio

ATCOs

On sick leave

Sickness

rate

Rate of

recovery

Cycle

Amplitude Offset

Periode

<Time>

Some results that were presented

Recruitment rate600

450

300

150

02006 2010 2014 2018 2022 2026 2030 2034

Time (Year)

Operative ATCOs

6,000

4,500

3,000

1,500

02006 2010 2014 2018 2022 2026 2030 2034

Time (Year)

AT

CO

Gap

600

450

300

150

02006 2010 2014 2018 2022 2026 2030 2034

Time (Year)

AT

CO

Independent from the scenario used, there are oscillations in some key

variables over time that are not easy to understand.

Number of required ATCOs

6,000

4,500

3,000

1,500

02006 2010 2014 2018 2022 2026 2030 2034

Time (Year)

AT

CO

AT

CO

No Cycle With Cycle

Time Lag through training process

Start of

process

Signing of

contract

Start of

training

Varies for each

trainee

(Ø 24 Month)Identical for

all trainees

(15 Month)

Varies for each

potential trainee

(Ø 6 Month)

End of

training, start

of OJT

End of OJT

Varies for each

trainee

(Ø 6 Month)

t = 0 t = 6 t = 12 t = 27 t = 51

Resulting delay behavior

Ordered ATCO

Signed ATCO

ATCO in IT

ATCO in OJT

ATCO

OJT 18 Months

0 10 20 30 40 50 60 70 80 90 100

Time (Month)

100

75

50

25

0

pe

rso

n

100

75

50

25

0

0 10 20 30 40 50 60 70 80 90 100

Time (Month)

pe

rson

OJT 24 Months

t≈68 t≈58

Results from client„s perspective

• A more detailed planning paradigm can be

implemented (group level instead of centre level);

• the personnel planning cycle can be repeated

several times a year instead of only going through

the process once a year;

• the risk management can be complemented by

some quantitative scenarios that are provided

almost in real-time;

• intensified communication between all stakeholders;

• the new scenario tool can act as a learning platform

for the case company as it integrates the experience

and perspective of several departments.

A general issue resulting from the case

There is some confusion about the different types of supply

lines:

“The firm is a logistics service provider and is a service firm. The

issues at this firm are similar to issues faced by a service firm.

Service firms, similar to a logistics provider do not have a physical

product and definition of inventory is very different.”

“Supply chain in service firms are different and have their own

specific issues. References relate to service chain issues in a

service firm…”

Structural similarity of the three

types of chains

MaterialWork in

progress

Finished

goodspurchasing fabricating assembling shipping

Proposal DraftFinal

reportaccepting drafting finalizing delivering

Newly

hired

In

training

Fully

productivehiring starting

training

finalizing

trainingleaving

Physical goods supply line

Service supply line

Personnel supply line

Prototypical behaviour of chains

20

15

10

5

03 3 3 3 2

2

22

2

22 3 3 3 32 2 2 2 2 2 2 3

3

3

33

3

331 1

1

11

1

1 1 1 1 1 1 1 1 10 5 10 15 20 25 30 35 40 45 50

time steps

en

titie

s

1st stock 1 1 1 1 1 1 1 1 1 1

2nd stock 2 2 2 2 2 2 2 2 2

3rd stock 3 3 3 3 3 3 3 33

Perceived differences and

structural similarity

• Perceived differences of the three types of chains, in

particular regarding

– Utilization of “production” capacities

– Premature outflow from the chain

– Divisibility of entities

• Because of structural similarity, differences are mainly

caused by

– Inappropriate mix of supply line elements with attributes of these

elements (“co-flow”)

– The three types of supply lines regularly are located at different

organisational levels

• “Strategic architecture” (Warren, 2007)

System dynamics as a structural theory

Range

of theory

Goal of

theory

content structure

Explaining…

grand

theory

midrange

theory

minor

theory

system

dynamics

system

dynamics

models