McCarran Airport Service Operations: CUSS, RFID, and SOA

Introduction

The efficiency of airport service operations has a direct relationship to customer satisfaction and the ability to maintain security. The synchronization of all service functions in an airport must be aligned with a series of strategic objectives to be successful, whether the primary focus is on maximizing customer satisfaction or operational efficiency. In the case of the airport chosen for this study, McCarran International Airport of Las Vegas, Nevada, the strategic objective of significantly increasing customer satisfaction through greater efficiencies is the airport's primary strategic goal.

The accomplishment of business process management and process re-engineering efforts is exacerbated by the large influx and outflow of visitors the airport receives throughout the winter and spring months, when conventions and association meetings plan their events in Las Vegas. While airport service operations can predict the highest and lowest weeks of travel during any given year, they cannot precisely define the magnitude of these swings in airport use. As a result, the airport authority in conjunction with Clark County, Nevada local government agencies are applying many of the same concepts found in queuing theory, Economic Order Quantities (EOQ), inventory analysis, fulfillment theories and best practices, supply chain management optimization, and the evolving use of Service-Oriented Architectures (SOA) to synchronize these many efficiency strategies and align them with the broader strategic objectives of the airport.

This report examines those areas where McCarran International Airport has achieved best practices, and those areas that need continual refinement and improvement to better align with the exponential growth in freight and passengers the airport is experiencing. Specifically, the report focuses on the synchronization of service operation practices, front and back office relationships, queuing systems, facility layout and design, capacity constraints, and quality issues—placing all of these functional areas and strategies in the context of achieving the customer service goals the airport has defined.

Analysis and Strategic Objectives

McCarran International Airport's ability to balance security concerns with the efficiency of customer service is even more challenging than at many other U.S. domestic airports, due to the fact that the majority of visitors arrive by air rather than by any other form of transportation—over 80% at last count, according to the Las Vegas Chamber of Commerce and Visitor's Bureau. The airport's total passenger volume correlates closely with the city's total hotel room capacity, illustrating why service operations at the airport are critical to the overall growth of Las Vegas's primary businesses: tourism and conventions.

Surveys completed by Clark County's Airport Authority show a high correlation between traveler satisfaction and their perceptions of the entire city's attractiveness, service levels, and overall trip satisfaction. In essence, for Las Vegas, the level of service delivered at the airport is often the most memorable part of any traveler's visit. As a result of this finding, the airport's management teams and Clark County local government agencies have devised an aggressive series of goals to make McCarran International Airport one of the most efficient and highest-rated airports in customer satisfaction in the world.

Clark County government officials and McCarran International Airport managers have set the following strategic objectives to guide fulfillment of the airport's strategic plan:

Revenue generation: Identify and implement revenue generation opportunities (revenue per passenger) by combining the retailing and check-in process workflows throughout the airport's terminals. This includes the introduction of free Wi-Fi internet access throughout the airport, which provides an additional benefit for business travelers who wish to check email or browse the internet while waiting for their flights.

Internal quality assurance: Implement an internal quality assurance program focusing on service, cleanliness, and operating mechanics. Define a series of key performance indicators and metrics so that an analytical dashboard can be used to monitor progress toward defined goals.

Parking and wayfinding: Identify and implement optimum customer parking rates and complete a comprehensive roadway signage review to facilitate passenger navigation into and out of the airport. Surveys completed by the Las Vegas Chamber of Commerce identified more visible and easier-to-understand signage as critical to enhancing total customer service.

Check-in and queuing optimization: Initiate a hotel check-in program and increase the performance of ticketing and gate utilization, including more efficient use of queuing to optimize the flow of security checkpoints.

Redefining Processes First, Systems Later

For the objectives defined by both Clark County and McCarran International Airport's managers to be achieved, a synchronized approach to redefining processes was first needed. In analyzing how the airport can increase its service performance, McCarran's management team began to deconstruct the most core processes, starting with the queues that customers experience when entering the airport, checking in for flights, clearing security, and interacting with retailers and shops. Using both Business Process Management (BPM) and Business Process Reengineering (BPR) in conjunction with queuing and demand forecasting through Operations Research techniques, the airport has the best chance of increasing customer service levels while monitoring them through analytics applications.

The integration of IT functions to augment service strategies is discussed in greater detail later in this report, as McCarran is pioneering the use of Service-Oriented Architectures as the integration point for its many customer-facing and operations-centric applications. Included in the proposed SOA platform—which serves to synchronize the many front-office systems necessary for increasing customer satisfaction—is also a series of analytics applications useful for defining scorecards of key performance indicators and metrics. These scorecards will be used by McCarran's management team to measure progress toward specific objectives and goals. Using BPM and BPR techniques, including Six Sigma and queuing theories, as the foundation for redefining processes creates a more demand-driven framework rather than a series of disconnected processes.

Using an integrated Operations Management System as the basis for process redefinition provides a useful framework for defining how McCarran's management team can redesign the processes most in need of improvement.

Queuing Process Redefinition for Common User Self-Service (CUSS)

The first area of process redefinition is Common User Self-Service (CUSS), which according to IATA was expected to be growing at 30% per year through 2008. The CUSS implementation at McCarran includes all major airlines with the exception of Delta Airlines and is comprised of an integrated system of 106 kiosks, including 6 off-site kiosks. The six off-site kiosks are located at the Convention Center, The Venetian Hotel, and four other locations. As of January 2007, these kiosks offered boarding-pass-only check-in, with bag check coming soon. The kiosks do not have ATB capability but are 2-D bar code capable.

McCarran International Airport's management goal was to achieve 10% off-site check-in in 2007. At the time of this report, 30 to 40% of all passengers at McCarran were checking in at kiosks, with approximately 4 million boarding passes issued, or roughly 150,000 per week. McCarran was the first airport globally to move so thoroughly to CUSS-based workflows, based on analysis completed by Odoni, one of the leading experts in queuing and operations research theory as applied to airport services.

Luggage and Baggage Process Improvements

Another major area of process improvement McCarran needed to address was luggage and baggage handling. The airport had been losing between 10% and 30% of all bags, leading to high levels of customer dissatisfaction and numerous manual processes attempting to compensate for this broken workflow. Relying on Radio Frequency Identification (RFID), McCarran piloted several programs for baggage tagging, management, and retrieval. In the retail industry, Wal-Mart pioneered the use of RFID to achieve higher levels of logistics and supply chain performance, and McCarran's many efforts have led to the definition of U.S. best practices in this area. As of January 2007, 52% of bags were tagged with RFID, achieving read rates of 99%. These results represent best practices in the use of RFID to overcome queuing problems associated with freight and luggage handling.

Using EOQ modeling theory in combination with RFID illustrates the implications of queuing optimization on orthogonally defined processes including luggage and freight management. McCarran's approach to RFID pilots and implementation was executed rapidly due to reliance on queuing approaches as defined by Liu and Wang. RFID implementation at McCarran would have been far less successful without a process-centric view of queuing and EOQ strategy as applied to both freight and luggage. The results of redefining processes first have been an impressive 30% reduction in lost luggage and a more efficient luggage and freight handling process, as measured by a reduction in cost per bag handled.