Standardized Service Level Agreements: Bringing Measurable Results to the Industry
As the industry has evolved and become more competitive and advanced, SLAs were first introduced to help evaluate and establish a baseline of agreed upon services between two parties. However, what once was as a short document has now turned into a novel-sized technical manual. Complicating matters even further, each airline normally has their own specific SLA, with variations on many small to large aspects of how they expect their cargo to be handled on the ground. Mr. David Ambridge, General Manager Cargo at Bangkok Flight Services; Mr. Mark Whitehead, Chief Executive of Hactl; and Mr. Joseph Notter, VP Cargo Operations at Saudia Cargo, spoke with us to further explain SLAs and why standardization of SLAs is the right step for the industry.
The International Air Transport Association (IATA) is the trade association for airlines worldwide. It is here where industry policy is formulated on critical aviation issues. Within IATA is the Cargo Operations Advisory Group (COAG), with members from major airlines and ground-handling agents. They work together on creating and implementing quality standards for the air cargo industry. Mr. Ambridge is a member of this group and gave insight into the discussions being had regarding SLAs.
“We are currently in the midst of trying to come together to develop a unified systematic SLA that can be applied to all airlines,” said Mr. Ambridge. “IATA’s COAG group has many goals and ambitions, but one that’s starting to come to the forefront is the idea of a standardized SLA. The main failure I see now with all the variations and customized SLAs is that they fail to bring value to the business; the reason being is that they’re so hard to measure. In fact, the entire objective of an SLA should be to measure the level of service being provided by a service provider to its customer. What’s happening now is that airlines are combining their standard operating procedures (SOP) with their customized SLAs and it’s creating an unwieldy document that is hard for anyone to wrap their mind around.”
The ultimate goal is to get back to where we once were and to create a standardized document that defines the customer experience and is easy to measure.
Mr. Whitehead echoed Mr. Ambridge’s sentiments in creating a measurable SLA. “I think there’s a realization that moving towards a more standardized approach helps everyone. That’s what the IATA subcommittee (COAG) is trying to accomplish, and we at Hactl fully support them. Standardization isn’t about the lowest common denominator; it’s about taking the best practices from the industry and trying to make it so you’ve got all bases covered. There will always be variations though; it’s hard to have a one-size-fits-all approach, but you can surely minimize the variations. Factors that are driven by local requirements or particular airlines where there are sensitivities will be there and I think we can all respect that, but you need to start with a good solid base first that covers all of the key issues, and that’s the goal with a standardized SLA,” said Mr. Whitehead.
Mr. Notter added, “A standard SLA along with many opportunities to reduce complexity, confusion and ‘Just-in-case’ syndrome from carriers is crucial if we are to expect competence and compliance from ground handlers (GHAs). The carrier community should ask itself how often the SLA is referred to and measured, and why equally does the GHA not measure correctly from a service delivery value? The industry is mixing a dangerous cocktail where everything is expected to be handled later and quicker at export, yet sits in warehouses for long periods at import arrival. The pressures and complex requirements are not conducive to repeatable and consistent process direction and best common practices. If speed is what we have to improve then it needs to be controlled and disciplined. We all have to take a step back and ask if we are supporting a more efficient and productive stance. In addition, we must ensure that the primary focus is on managing our business in the most safe and secure practice. This again requires keeping things simple and keeping things according to guidelines and best industry practice. Do we remember the term, ‘Ready for Carriage?’”
The wide range of varying SLAs of course brings about a challenge to the people working on the ground to make sure they follow the protocol set forth within each SLA. While they may do their best, mix ups and accidents occur because of the varying rules between SLAs. “With so many different procedures to do the same job, you’re bound to have errors, incidents, and accidents,” said Mr. Ambridge. “That’s why we want one manual and one way of working so we have consistency across the industry. Then you have more transparency if someone is not following the rules.”
A document that makes us better able to self-measure so everyone can see it is ideal; so then we can really drill down to the best service possible.
Mr. Ambridge continued with examples of differences he’s seen in SLAs that should be standardized. “When chocking an airplane, each SLA specifies a different way to do this with the same aircraft type. This can’t be right; there must be one correct way to put chocks on an airplane. We need to decide that, and implement it so it’s done the same on every single aircraft, every single day, so we have consistency. Another example is how to open up belly cargo doors. Some SLAs specify for us to open it off a lower deck loader, some want it to be done on a ladder, and some want it done on the belt loader, and so on. This all has to be taught and memorized to workers, and adds to costs and contributes to more mistakes. There should only be one way to open up the cargo door.
Once it’s established everyone can be trained, checked, audited, and certified for this. When you go to the same aircraft type, with four different airlines, with four separate SLAs to open the door, confusion is bound to happen. This is just one example of an endless list of nit pickings that could be solved with a simplified SLA.”
Writing a standardized SLA is one thing; having all parties involved to agree on said SLA is another. With all the customization that airlines want, it’s hard to even start to specify what the standard is for all. The real first step is getting a base set, from there then exceptions can be put in place. As Mr. Ambridge explained, “Exceptions can always be put in place after, but first we need the rules set before we worry about exceptions. Everyone is worried about the exceptions first before the rules, and that’s why progress is slow.”
Mr. Whitehead explained what he thinks should be in the base level standardized SLA. “If you look at the industry master operating plan, there are only a few milestones that the industry specifies measured for customers. That’s why we’re trying to get back to something practical and easy to measure. A document that makes us better able to self-measure so everyone can see it is ideal; so then we can really drill down to the best service possible. That would lead to the industry being able to be more competitive with integrators because if you can put it online it would lead to greater transparency like the integrators have. Some simple examples that should be at the very core of an SLA are ‘flown as booked’; did a shipment fly as it was booked or fly as planned? Did the shipment arrive on time? Did we notify the customer that the shipment had arrived? These types of yes or no questions are really easy to measure, practical, and useful information.”
We all have challenges ahead so why not start doing things simpler and similar to allow development and improvement where it is needed?
Mr. Notter informed, “GHAs must sometimes say no rather than accept what they know will confuse or disrupt normal expected services. The three dark strangers that have a negative impact on standard operating procedures are ‘Favor, Familiarity, and Flexibility’ all words and terms with many genuine intentions and even more loose interpretations! Carriers will of course have certain defined requirements that are out of the norm, yet these should be few and far between. The ‘just in case’ or ‘you never know’ or ‘remember when’ back-up mentality must change and if SLAs are to be used as they should then it must be because you can manage what is measured and measure what is managed – if both parties do not value the measurement and reporting and do not verify and validate the results then where is the partnership going? And what use will it be to the improvements everyone talks about but finds challenging to act upon? Our industry is a team; however, at times we do not perform as one nor at times appreciate each other’s position in the team. We need to win together or fail individually. We all have challenges ahead so why not start doing things simpler and similar to allow development and improvement where it is needed?”
A Plan Forward
Resistance to a standardized SLA seem to be few and far in between. Airlines will of course want to keep some of their more sensitive exceptions in their SLA, but creating a unified SLA is good for the industry as a whole. A common standard brings transparency and is an easy way to audit performance. With an organization as large as IATA, and trying to please all parties involved, it’s understandable that crafting this base SLA will take some time. All worthwhile endeavors do take time, but with the assistance of COAG a path has at least been set to achieving this worthwhile goal for the industry. We will be sure to check in again to see the progress that has been made later in the year.