7.30.2008

Flow in Alaska





For those of us who love lean, flow is a fascinating topic, whether we’re talking about how parts flow through a factory or how patients flow through a hospital.

I’ve just returned from two weeks’ vacation in Alaska. I didn’t spend my time there thinking about work, or even about lean; my wife and I were there simply to enjoy ourselves.

And let me say that the sights in Alaska are truly magnificent. If you enjoy viewing scenery and wildlife that you will see just about nowhere else in the world, I highly recommend the Tundra Wilderness Tour in Denali National Park, a ride on the White Pass Summit Railway in Skagway, and a visit to Mendenhall Glacier in Juneau. (The glacier is what you see in the picture.)

But while I was in Alaska, I couldn’t help but be intrigued by the flow challenges facing the tourist industry there. I don’t know whether this has ever been studied from a process viewpoint, or mapped; if not, it could be turned into a remarkable case study.

The biggest challenges involve cruises. Hundreds of thousands of people cruise Alaska every summer. The main starting and ending points for these cruises are Seward and Whittier, near Anchorage to the north, and either Seattle or Vancouver to the south. Some cruises travel in only one direction; others begin and end at the same point. (We cruised from Seward to Vancouver.) At least four or five different cruise lines offer Alaska cruises.

Caribbean cruises can select stops from among quite a few islands, but Alaska cruises have fewer choices. You can sail into Glacier Bay, and make stops at Haines, Skagway, Sitka, Juneau and Ketchikan. That’s about it. As a result, many ships stop at the same ports at the same time.

For example, while we were there, I saw four ships docked at Skagway simultaneously. That represents more than 5,000 passengers all descending at once on a town whose population is less than half that figure.

The towns have limited docking facilities. We actually docked at Haines and took a ferry to Skagway. As far as I know, only one ship can dock at Haines at any moment. (Most of Alaska is pretty rustic. Haines doesn’t even have any traffic lights.)

When we went to Ketchikan, we didn’t dock until the afternoon – after at least one other ship had finished a morning visit and left.

A cruise line may list two dozen excursions available at any given port. These include helicopter and plane flights, hiking or kayaking, historical tours of towns, visits to native villages, and many more. Any one of these excursions may be open to passengers of several different ships.

So as the passengers pour off a given ship, a horde of tour guides and buses are waiting, holding up signs and pictures so each passenger can find his or her excursion. And of course, many passengers don’t sign up for excursions, but simply decide to explore the town on their own.

Similar situations exist inland. Like many people, we were traveling on a land/cruise package that also took us far inland, to Fairbanks and Denali, before the cruise – which involved travel, also arranged by the cruise line, on trains and buses.

There are many different land packages. We met people in Fairbanks who were ultimately headed for the same cruise as us, but were traveling to different land locations first. Think of the coordination involved. (I even met a man whose package was taking him to Prudhoe Bay, on Alaska’s northern coast, where he planned to take a polar bear swim in the bay. I guess he wants to be able to say he did it.)

And of course, none of this includes the many tourists who travel through Alaska on their own, not part of any package. (However, we were told that, with the rising price of gas, the number of RVs seen in the state has dropped dramatically.)

For the most part, it all works pretty well. There are occasional glitches, like when we had to wait an extra half hour for our ferry to Skagway, on an unprotected dock in the chill, damp air (Alaska is having a colder-than-usual summer). We were told everything in Alaska is on “ish” time – your ferry doesn’t pick you up at 3, but at “3-ish.”

And while occasionally the parts of the process can make you feel like you are on an assembly line, that doesn’t last long. I highly recommend going to Alaska.

I don’t know how it is all coordinated. Clearly, the cruise lines, the ports and the local excursion providers work closely together. I’d love to see it laid out on a process map.

Is there a lean manufacturing graduate student out there looking for a thesis project?

2 comments:

Greg New said...

I recently returned from an Alaska cruise as well and had many lean thought throughout my trip. My main thoughts centered on the operations of the ships crew. The action of every employee seemed to be well planned and though out...standardized! I had imagined that at each position there is well-documented and trained standard work and for each level of management/supervision there is well documented auditing. Is there anyone with cruise line operation experience that can comment on this? It would be interesting to know if there is a lean element to the operation of cruise lines.

Anonymous said...

I live in Alaska, used to be in tourism lodging & activities, and now do Lean implementations here. It is a fascinating industry. Huge corporations next to Mom & Pop shops. The large cruise/tour companies have their production systems down, but customer value is not maximized. The cruise companies manage quality and delivery by vertically integrating between ships, hotels and buses. While Lean is rare, they generally manage by Theory of Constraints. Bottlenecks are logistical transfer points (docks, airports, buses, sidewalk space), bathrooms and meal facilities. "Butts in beds" are the capacity metric, and "newlyweds and nearly deads" are the target market. For land-based tours, they operate on 44-person batches that fit in a bus. Activities are managed as voids or “scrum events” where the guest has 6 hours in Juneau to choose any activity they desire.
Job Instruction is done by supervisors who are usually returning staff from last season that come a week early for their training. Employees are usually Asian (ships with year-round workforce), East European (back of the house), and U.S. college/youth (front desk & servers). Land-based staff are on a 4-month hitch with meals and lodging provided and one week of training, including team building activities like painting the lodge. Job Methods and standard work are rigid on ships and vary on land assets. Managers are year-round logistics professionals who do asset maintenance, adjustments to job methods, new products, hiring & training in the “off season” which infers that each year is a batch. Managers annually struggle with port officials over docking times, and itineraries are adjusted accordingly. The focus during season is on turning beds and turning bus wheels to keep the batches moving.
The entire Alaska cruisetour system guarantees a comfortable yet mediocre experience because the customer voice is cut off from production. Cruise customers accounted for 20% of our guests, 50% of our cancellations, and over 75% of our complaints (80:20 Rule) because we couldn’t manage expectations. The booking channel can be long: Guest – Travel Agent – Tour Wholesaler - Cruise Company – Supplier, so there was never an opportunity to reconcile guest expectations with reality.
The guests choose their daily activities in the itinerary voids between logistical transfers (your choice of activities in Juneau was a “scrum event”). The successful delivery of peak experiences of your trip (majestic scenery or bear viewing) is a random occurrence based on weather and wildlife. From a customer value perspective, that’s pretty risky for a $4,000 trip of a lifetime. Ralph wisely chose the closest thing to a guaranteed peak experience with the 7-hour Tundra Wilderness Tour in Denali. If he chose the 3-hour Natural History Tour that goes one-third as far (which is marketed very similarly), he would have been underwhelmed at the 3 days it takes to do Denali. That’s a huge difference in customer value based on two sentences of marketing copy in a 48-page brochure.
Eric Downey
Alaska MEP, eric@ak-mep.org