Transcript Title of Presentation

What Airlines Can Teach Us
About Optimal Decisions in the
Midst of Constant Change
Optimization at Southwest Airlines
Rusty Burlingame
Sr. Operations Research Developer
Southwest Airlines
Oliver Bastert
Senior Director Product Management
FICO
© 2014 Fair Isaac Corporation. Confidential.
This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent.
For airlines (and other businesses),
optimization can make margins soar.
2
© 2014 Fair Isaac Corporation. Confidential.
Image: SWAMedia.com
3
© 2014 Fair Isaac Corporation. Confidential.
Agenda
► Quick
overview of Southwest Airlines
► The
Millions of Variables that Impact Margins at
Southwest Airlines
► The
► How
► The
Problem We Faced and What We Did About It
We Implemented Optimization Technology
Dramatic Results
► Future
4
Destinations on Our Optimization Journey
© 2014 Fair Isaac Corporation. Confidential.
Image: SWAMedia.com
5
© 2014 Fair Isaac Corporation. Confidential.
Quick Overview of Southwest Airlines
6
© 2014 Fair Isaac Corporation. Confidential.
Southwest Airlines History and Facts
► Maiden
flight was in 1971:
►4
Boeing 737 aircraft
► Serving Dallas, Houston, San Antonio
► Today:
► 600+
Boeing 737 aircraft (largest single fleet in the world)
► 3500+ flights per day
► Serving 93 destinations, including 7 international destinations
► Carrying over 100M passengers annually
► 10 crew bases
► 11 maintenance locations
► 41 consecutive years of profitability
► $17B annual revenue
Image: SWAMedia.com
7
© 2014 Fair Isaac Corporation. Confidential.
Where Does the Money Go?
► Airlines
have three main costs:
► People
► Planes
► Fuel
► At
Southwest:
► 45,000
Employees
► 600 Boeing 737s
► 1.8B gallons per year
Image: SWAMedia.com
8
© 2014 Fair Isaac Corporation. Confidential.
Current Optimization at Southwest Airlines
9
© 2014 Fair Isaac Corporation. Confidential.
People Optimization
► The
largest total cost
► Desire
to treat Employees well, have them work
efficiently, safely, legally
► Crew
Pairing Optimization
►
7000 pilots
► 11000 flight attendants
► 3500+ flights per day, 20,000+ flights per week, 10 crew bases
► The world’s biggest crew pairing problem
► MIP, parallel barrier, column generation, custom heuristics and
callbacks
► Various
►
Bidline Optimizations
Monthly Overlap, Vacation Overlap, Recurrent Training, Open Time
Reoptimization
► Crew
Recovery Optimization
► Staff Planning
Image: SWAMedia.com
10
© 2014 Fair Isaac Corporation. Confidential.
Fuel Optimization
► Second
► Even
largest cost
a few cents can make a difference when you’re buying 1.8B gallons
► Tankering
optimization
► Purchasing optimization
► Inventory and supply chain optimization
Image: SWAMedia.com
11
© 2014 Fair Isaac Corporation. Confidential.
Aircraft Optimization
► A huge
► Idle
capital expense
aircraft and empty seats don’t make money!
► Flight
Schedule Optimization
► Aircraft Maintenance Routing Optimization
► Gate Assignment Optimization
► Aircraft Irregular Ops Recovery Optimization
Image: SWAMedia.com
12
© 2014 Fair Isaac Corporation. Confidential.
Image: SWAMedia.com
13
© 2014 Fair Isaac Corporation. Confidential.
Image: SWAMedia.com
14
© 2014 Fair Isaac Corporation. Confidential.
Image: SWAMedia.com
15
© 2014 Fair Isaac Corporation. Confidential.
Image: SWAMedia.com
16
© 2014 Fair Isaac Corporation. Confidential.
17
© 2014 Fair Isaac Corporation. Confidential.
Even 2–5% more
margin would fill
our glass
18
© 2014 Fair Isaac Corporation. Confidential.
What We Decided to Do: Turbocharge with
Optimization Software
► Centralized
► First
focus:
► Crews
► Flights
► Adopted
19
FICO® Xpress Optimization Suite
© 2014 Fair Isaac Corporation. Confidential.
FICO® Xpress Optimization Suite
► FICO®
Xpress Optimization Suite provides
a comprehensive set of scalable, robust and
fast optimization algorithms to SWA
FICO® Xpress parallel mixedinteger programming and barrier solvers
heavily
► SWA uses
► SWA recently
started using
Optimization Modeler from the
FICO® Decision Management Suite to
build full optimization solutions quickly
20
© 2014 Fair Isaac Corporation. Confidential.
FICO® Xpress Optimization Suite at Southwest
► Crew
Pairing Optimization
► Flight Schedule Optimization
► Aircraft Routing
► Crew Recurrent Training Scheduling
► Crew Recovery
► Aircraft Recovery
► Gate Assignment
► Fuel Tankering
► Instructor Scheduling
21
© 2014 Fair Isaac Corporation. Confidential.
► Simulator
Scheduling
► Cargo Routing
► Ground Ops Scheduling
► Provisioning Optimization
► Reserve Optimization
► Dispatcher Workload Scheduling
What We’ve Achieved
► Crew
Pairings are better than ever, and that
capability has allowed us to prepare for new
challenges
► 737–800
series requires 4th flight attendant
► International flights
► Contract negotiations
► Strategic plans (what’s the best place to open a
new crew base?)
► One
simple project, Open Time Reoptimization,
paid for itself the first time it ran.
Image: SWAMedia.com
22
© 2014 Fair Isaac Corporation. Confidential.
What We’ve Achieved
► Aircraft
Operations
► Expanding
optimization to
►
Gate Assignments
► Cargo routing
► Dispatcher workload scheduling
► Fuel
► Work
has started to rewrite the flight planning
system, and to make tankering more accurate
using better input data
Image: SWAMedia.com
23
© 2014 Fair Isaac Corporation. Confidential.
Where We’ll Go From Here: Real-Time Optimization
► Data
is becoming more available
► Have
to be fast to make use of it
► Crew
Recovery
► Aircraft
► Gate
Recovery
Reassignment
► Global
Recovery
Image: SWAMedia.com
24
© 2014 Fair Isaac Corporation. Confidential.
Where We’ll Go From Here: More Precision
► Now
have the ability to run many more flight plans
► Make
fuel decisions as accurately as possible
► Leave decisions until just before needed, to leave time
for accurate data to arrive
► Use
historic data to adjust
► A planned
crew pairing may look good, but fail to
successfully operate
► Adjust plans based on expectations
► Try to optimize the best result, not the best plan
Image: SWAMedia.com
25
© 2014 Fair Isaac Corporation. Confidential.
Where We’ll Go From Here:
More Proactive
► Plan
a response when you see a
problem coming your way
► Aircraft
Recovery
► Crew Recovery
► Gate Reassignment
Image: SWAMedia.com
26
© 2014 Fair Isaac Corporation. Confidential.
Questions
27
© 2014 Fair Isaac Corporation. Confidential.
If small changes make a big
difference in your business, you
need automated optimization.
28
© 2014 Fair Isaac Corporation. Confidential.
29
Thank You!
Rusty Burlingame
[email protected]
Oliver Bastert
[email protected]
© 2014 Fair Isaac Corporation. Confidential.
This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent.
Learn More at FICO World
Related Sessions
►Optimizing Credit Policy and Strategy, How Sprint Calls It
►Marketing Mix Mayhem, Optimize Marketing Decisions
►Turning Lemons Into Lemonade: How Optimization Tools Help You Turn Questionable Data into
Profitable Actions
Products in Solution Center
►FICO® Decision Management Suite
►FICO® Optimization Modeler powered by Xpress
Experts at FICO World
►Oliver Bastert
►Horia Tipi
Community
►www.fico.com/blog
30
© 2014 Fair Isaac Corporation. Confidential.
Please rate this session
in the FICO World App!
Rusty Burlingame
[email protected]
31
© 2014 Fair Isaac Corporation. Confidential.
Oliver Bastert
[email protected]