Friday, June 25, 2004

Don't fear the standing army.

One of the central articles of the CATS faith is to 'avoid having a standing army'. One suspects this emerges mostly from the 'NASA does this, and to be CATS one must not do what NASA does' portion of the creed. This attitude however is, as Miracle Max might say, only mostly right. How to, and not to, do things should emerge from experience and be based on first principles not on dogma. Some of these first principles however are things that don't usually get much credit in the engineering oriented community that is CATS, namely PHB's and bean counters.

One of the most derided standing armies is the one supporting the Space Shuttle at Cape Canaveral, thousands of people supporting a small handful of vehicles flying a few missions a year. Somehow the equally large armies maintained by US Air, Southwest Airlines, etc. go unnoticed or at least unmentioned. Yet, the fact that they exist indicates that they cannot be dispensed with. (This should be obvious from first principles; if you are operating a vehicle, someone needs to kick the tires and check the oil level now and again.)

The key difference between the two armies is this; while those at the Cape support a few flights a year, those with the airlines support hundreds if not thousands of flights a day. There are two terms to the equation that determines how ground personnel affect your total costs, the first is their gross numbers of personnel, the second (and often ignored by the CATS folks) is how many flights per diem or per annum that they support. The bottom line of a tourist or transport operation is affected by both terms. One ignores this at peril.

Another issue, well known in many engineering and accounting communities, is that turn around time isn't the only criteria. Any vehicle participating in extended operations will also require both occasional repairs and routine periodic maintenance. Engineering cleverness that reduces weight, construction costs and turn around times must be balanced against its impact on day to day safety, maintenance, and operations. The key is to reduce the total cost of ownership not just the daily and per flight costs of operation.

Don't fear the standing army. Fear the impulse to concentrate on one facet of an issue while ignoring other aspects. A startup tourist or transport company would do well to hire an engineer and a CPA who aren't dreamers about space and who can serve to provide balance to the corporate viewpoint.


At 6:58 PM, Blogger Brian Dunbar said...

"One of the central articles of the CATS faith is to 'avoid having a standing army'."

Having a reasonable sized infrastructure is one thing. Having an army around hanging around is another.

NASA employes (round numbers) 20,000 people in the Shuttle program. That's an army. Most airlines employ (round numbers) 100 people per airplane. That's a reasonable number.

It's not (in my humble opinion) the infrastructure most CATS people object to, it's the sheer size of Shuttle's infrastructure that pains.

At 11:55 PM, Blogger Eric said...

I agree if your point is "do whatever makes sense to keep the business afloat" However, there's no way you could fit NASA-sized infrastructure into any realistic commercial plans. You'll never have enough paying customers (Unless you're actually competing with the airlines by offering long-haul passenger service).

I doubt the early airlines started out with a "standing army" when they began taking passengers.

In any event, the real reason you don't want to "do things like NASA" is the agency exists to create jobs in strategic congressional districts. No other entity would be allowed to fail so often. How many "shuttle replacements" have been designed and cancelled because they didn't pass first-principle analysis?. I don't see any aspect of NASA's operations that could reasonably fit into a business plan.

At 12:54 PM, Blogger Derek said...

Eric; That's pretty much the essence of my meaning; businesses should be based on business principles, not dogma. That's not to say that being a business gives them license to behave as some of today's megacorps do however.

(I get these great ideas, I'm not always so good at expressing them.)

At 2:26 AM, Anonymous Anonymous said...

Yes, airlines have about 100 employees per airplane. Southwest has about 84, while most airlines have between 111 and 160. However, most of those employees are selling tickets, handling baggage, catering the inflight meals, publishing the inflight magazine, and performing other activities rather than operating the aircraft.

A DC-9 requires about 6.4 maintenance man-hours per flight hour, but if you look at business jets, a Cessna Citation requires only 0.95 hours and a Lear 35 about 1.8.

The author posits a false dichotomy between standing armies that fly a few flights per year and standing armies that fly thousands of flights per day. Because NASA, Southwest, and US Air have large standing armies, he implies that such armies are inevitable. That is fallacious. Certainly, an operator with hundreds of aircraft will have hundreds of mechanics, but there are many small operators with only one or two mechanics on staff.

I doubt that any startup ignores flights per diem or annum, as the author claims.

A startup does not need to hire a corporate CPA or engineer, as the author suggests, to tell them that they should fly thousands of flights per day. That's like walking into a corner bookstore and telling the owner he should a million copies of the latest bestseller -- it's not that he hasn't thought of the idea or that he wouldn't like to sell that many, but growing a business takes time and he's limited by the number of customers who walk through the door.

Likewise, the first space transportation operators are not going to be selling as many flights per day as Southwest Airlines, nor will they be operating hundreds of airplanes like Southwest Airlines. Markets take time to develop and anyone who overreaches, trying to create a standing army overnight, will perish. First principles, not "dogma", "faith", or "creed" dictate it.


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