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Abstract / Conclusion
Every year, Hong Kong airport deals with millions of business travelers / holiday makers, Hong Kong airport does leave an impression on visitors mind on the high efficiency of an international renowned airport. TQM is the essence of continuous improvement. Critical success factors has to be laid out first and trying to measure various performance improved initiative that could bring about synergy to the airport operation, provides world class services to all of its passengers.

Keywords
Airport , services , CSF , performance indicator , performance evaluation, logistics hub

andrew wood 0020-- HKAA Table of Content -- Content page

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Hong Kong international airport authority -- performance and

process analysis of its successful implementation of its new creative marketable initiatives
Chapter A 1 Background Hong Kong [AA]--- a renowned world city with an airport in Lantau B 2 Outlining the objective of Airport Authority
Its objective is its Core values including Safety Security Operational efficiency And environmental concern

Page 3 3 3 4 4

3 Critical success factor CSF for new initiatives Stages in CSF creation Passengers are interested in comfort, expedite queuing time . 4 Performance indicator and Performance Evaluation Quantifiable performance indicators
Few examples of implemented plans Performance Evaluation

4 4 4 8 8 8 11 13 13 15

5 Limit to these performance indicator and few viable way to resolve all those limitations
Improving Weather Forecast Accuracy to improve flight promptness

R References and Bibliography

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The objective of this individual assignment : It is to apply the framework and concept on performance measurement, onto a real life successful organisation example A B -- background -- outlining the objectives of the organization

C -- state the Critical successful factors, how to monitor the progress, how will it be measured D -- Performance Indicator -main topic

E -- Limit of these performance indicator and how to resolve all those limitations eventually

A
Background
the perception of the Hong Kong international airport will leave a long-lasting impression for our industrys international business partners which in return would affect how successful Hong Kong doing business with the rest of the world. In addition, a comfortable surrounding in the airport with superb efficiency would reinforce the tourists awesome impression of Hong Kong --- a renowned world city. A clean, efficient and impressive airport would inevitably leave our visitor a good perception, Hong Kong international airport implements TQM in order to achieve an even higher ground as an ongoing process to improve its facilitated services. The new Hong Kong international airport is located on a piece of reclaimed land in Lantau island of Hong Kong. International flight handling and its passenger facility is being run by Hong Kong Airport Authority. abbreviation:

Hong Kong Airport Authority

--

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B
Objectives of the airport authority
The airport authority set up the following core values as their objectives in its service:

Safety Security Operational efficiency And environmental concern

Despite its success in serving the staff and passengers, it continues to seek higher ground by encouraging its employees to make recommendation about raising its own standard and implement those ideas in a busy logistics hub in SE Asia.

Safety refer to
1. 2. Workplace safety Identifying potential risk and drafting a contingency plan for different scenario and situation - BUILDING computer simulation model for the effect of major constructive work in the existing passenger terminal service -- to evaluate its impact during the refurbishment

C
Operational efficiency -- Critical Success Factors
The CSF Critical success factors would define key areas of performance that have to accomplish before declaration of a successful mission. Consultants with managers address these knowingly key areas when they set up their goals and they would direct the operational activities and task that would directly lead toward the goals. For a big organization like AA, these key areas for performance are made explicit, they provide a transparent point of reference for the entire organization. The first stage of CSF would be to 1. Identify the key concerns of senior management 2. identify focus areas in each stage of the project life cycle (and any possible causes that would result in project failure) 3. evaluate the reliability of the new initiatives -- assurance 4. identify threats and opportunities 5. Measure the productivity of the operation staff before/ during / after implementation Since there is an on-going preparation for the privatisation of the airport, therefore the following CSF have been set up: 1. High inventory levels must be reduced although a delicate balance of spare part availability has to be considered.

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andrew wood 0020-- HKAA improve performance with new initiatives Page 5 2. extreme measure would be implemented after the impact of the 9-11 terrorist attacks, that change the pattern of usage of the airport 3. more regional airport co-operation since the emerge of the logistics air-hub; barriers has to be reduced for regional co-operation: new dynamic has emerged and mutual complementary position is evolving

Brain-storming might not be the norm in many organization, in a big and articulate organization such as AA; new idea, new initiative have to be encouraged because there is always better idea out there: Therefore, the AA has been encouraging HOME-GROWN innovation: local intelligence, local ideas To be more efficiency, people and organization are now expected to be betterperform>> to achieve more, to accomplish things at newly raised level, with virtually the same resources or cut down unnecessary resource usage. By taking an innovative approach, the AA has new idea / initiative being adopted.

Asking for the Basic Marketing skill that passengers would feel pampered
The ultimate customers of the airport would be the passengers, the aircraft and the cargo. AA have to ensure ultimate customer satisfaction with every staff focus on the basic marketing skill to come up with new initiatives because they should know their customer well.

AA can Always Raise the bar -- currently, AA is already the best organization in

Hong Kong, but AA staff still able to find room for improvement to facilitate the airport operation.

andrew wood 0020-- HKAA improve performance with new initiatives Page When an idea is initiated, the AA staff must be THINKING ABOUT :
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Respecting the targets preference

the AA staff must be THINKING ABOUT :

Fast , Efficient and reliable service.

Since the ultimate users of the airport are business travelers AND holiday makers, therefore, they are more interested in >> 1. Comfort : easy-access, perceived comfort level, intermodal transport linkage 2. Cost : low cost airline has changed the landscape of the ticket price structure from the traditional airline operators; will low-cost affect the choice of public transport by the money-for-value market segment? : utmost concern, thoroughly-checked plane is the safest type of 3. Safety transport 4. Travel time perception : No one love to stuck in traffic, therefore airport must do the best to shorten the stay-in-queue duration, waiting time at the terminal, waiting-time for transfer passengers 5. Measures that will reduce perception of travel time : the airport will focus on Ease of boarding as its affect the travelers whilst waiting to get on board For public transport, there is a need for meticulous attention in the following areas: Frequency of the scheduled flight, punctuality, ease of access Quality , cost, personal comfort The above points may not be quantifiable, therefore we have to carry out an IMPORTANT STEP to translate it into measurable quantifiable :

Flexibility and access ease :

The flexibility is measured by satisfying excessive demand on airport service during peak hours and by the possibility of increase frequency of chartered flight during the first few hours of long holiday.

Reliability and punctuality :

Airline reliability and punctuality depend on weather factors and maintenance factors etc. Good organization of hanger maintenance team, Effective and Efficient relay of weather information and weather forecast has direct impact on punctuality.

Baggage service and tele-communication [commercial] service :

An accurate and high tech baggage handling service allows all the baggage to be delivered on board when the plane takes off. Commercial service, business travelers always want to make last minute communication while they are doing business in Hong Kong. Therefore, the airport has to provide all common means of tele-communication and providing appropriate level of internet / courier service.

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IT enhanced support for the swift change during the co-exist period of the current and new practice The airport authority has used an enterprise project management solution to work out the probable scenarios during the transition period. The software could provide following features Powerful data analysis tools that provide insights of overall portfolio by identifying simulated trends and problem area What-if scenario modeling for better understanding the impact of trade-offs for strategies evaluation and mitigation of risks Optimize resources across the authority for sustained competence Tracking of resources and workload across projects for better resource efficiency Staffing tools for optimized the production of each staff and for assigning an optimized resource allocation Streamline project management performance to add synergy With data analysis, capture and deploy best practices to achieve organization-wide compliance Planning tools for creating reflect realistic schedules, resource requirements, so that project teams can consistently meet project goals and attain customer satisfaction Project performance, issue and risk tracking capabilities for in-depth project governance and control Strengthen collaboration across the airport services for improved productivity Real-time access to mission-critical project managers to make timely, informed decision to ensure smooth operations through-out Email tools to enable team members easy to manage the project track and report on the progress of their project activities Central documentation repository means of knowledge sharing between teams members to

In many way, Airport Authority is a well-funded organization that achieve its own targets and be praised by various judging organizations / magazines critique, while the civil service of Hong Kong government do not have such initiative and high standard in its year-to-year appraisal by media and other organizations. It might be due to the Airport Authority do have a 3M company culture. 3M is an innovative company that invents a lot of consumer products; it has a highly educated, well-disciplined work force that seeks for unexplored marketing opportunity. Whilst in the Hong Kong Civil servants in the government, they also do have a highly educated workforce but try too hard to balance the interest of every stakeholders within the community in Hong Kong. Pretty much like any other big civil services in the world, sometimes, the civil servants lose it hide-sight when handling daily routine. Less adaptive to the ever-changing economic and political environment. As a conclusion, it strongly indicated that a delegated workforce with various contingency drills would prepare the staff to adapt better to the Global everchanging environment in the new millennium and the new political landscape. Stability

andrew wood 0020-- HKAA improve performance with new initiatives Page 8 does not come easy, but adaptability to the global issues, such as crude oil price is going sky-high, environmental concern of the energy efficiency, political environment is constantly changing in the local region, operation cost concern, organizational structure and its politics, citizen and media expectation, bio-hazard outbreak. Inevitably, the Hong Kong governments departments and various units could acquire the knowledge that the airport authority achieved during the last decade or so, pretty much like a young, vivid organization.
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D
Performance Indicator of the airport would be>> Satisfaction of the

business and leisure travelers

Arrival / Departure / landing / lift off punctuality and any occurrence of major clutches Passenger journey on time Escalator / Lift / baggage handling service reliability Handling passenger enquiry, response time, response quality, interpretation availability Temperature and ventilation Cleanliness of the rest room facility, waiting area, passage way, planes, other vehicles Customer satisfaction level --- could be measured indirectly by how passengers complaints is being handled, does it mitigate and resolve the concerned issue at the end and how does the passengers response to the arrangement Passenger / Staff injury rate Response time for the emergency drill

Implemented schemes include

Airport Lightning Warning System outdoor air field work Using computer modeling and simulation to demonstrate that airport facility expansions and enhancements will not compromise the full set of safety regulatory requirement.

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EXTRA -- air traffic cooperation with nearby airports Air space congestion -- illustrate how keen is the competition between nearby airport
Air space congestion has been single out as the most serious threat to the growth of traffic movement in the region. Airspace congestion in the SE Asia area has caused frequent delays of aircraft departures. There is a need for close co-ordination and cooperation among countries along these corridors and the need to upgrade to high-tech communication, navigation and surveillance CNS and ATC advanced satellite facilities. In recent year, the shortage of airport landing / take-off slots and congestion in air space have constrained the speed and extend of bilateral air transport liberalisation. Hong Kong was ranked 23 among the worlds airports in terms of total passenger volume, but HK is the only pure international airport that could be the top 25 without domestic air traffic. There are 4 Chinese airports in close proximity to Hong Kong, those are Guangzhou, Shenzehn, Zhuhai and Macau. For the future air traffic activities, it could be indirectly affected by the traffic in these airports and the Chinese Government directive in developing these airports into a regional airport Hub.

For the fifth freedoms agreement issue

HK has negotiated more liberal arrangement with a large number of its bilateral partner on the basis of exchange of balanced and reciprocal right. However, one of HK major concerns is in respect to fifth freedoms, Since HK airline do not have a protected domestic market, HK have to compete in international markets. Therefore, Hong Kong concern will be Granting fifth freedoms to other competitive international airline, whether the realised benefits will compensate for losses on third and forth freedom rights. As a result, the government position would be to allow maximum scope for market competition and HK will tend to not regulate with respect to fifth freedom. However, HK could learn the lesson from the success of US-Canada open skies agreement. In the short run, liberalisation may hurt inefficient carriers while being helpful to developing the integrated logistic hub. If we broaden our vision and see the long term effect, competition might bring about improve efficiency when they have flexibility and freedom to access nearby market, less pollution may be made by reducing the distance of truck traffic on the road to their final destination. Not only best service available to its passenger, but airport capacity is an important factor in the formulation of international aviation policies. At congested airport during peak season, slot allocation at congested airport is a major issue; bilateral negotiations between competitor airlines would be the way to resolve such slot allocation issue. Indirectly more slot means that more time / resources that need to handle passengers or cargo that the airplanes bring along.

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10

City
Tokyo BangKok Sydney Beijing

Airport
Narita Bangkok Kingsford Capital

Capacity shortage
Runway slots Terminal capacity, apron aircraft parking capacity and runway slots Runway capacity, gate capacity during peak hours and noise pollution in the surrounding areas Runway slots and passenger processing capacity

In order to improve the airport usage further, adding value to the airline users, and ultimately building a successful international transportation and logistics hub, the following area has to be addressed during future development

1. 2. 3. 4. 5. 6. 7.

base traffic level at the hub number of airports bilateral agreement and liberalised air transport regime, government commitment airport capacity Intermodal mode of co-ordination with shipping port, railway link, 3PL providers pro-business environment, like strong airline would prefer deregulation of the transportation industry improvement on information and communication technology

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Performance evaluation
Even when performance indicators are in place, we still need a proper external auditing committee to evaluate the progress and performance. In AA, there are various committees, management group that monitor the progress 1 AA got the executive management team team leaser : Chief Executive officer They will be accountable for managing Authority daily operation and assisting implementing the corporate strategies. The senior executives, as well as receiving reports and comments from VARIOUS PERSPECTIVES (facet of different form of perception) of the executive management. In order to ensure management can carry out its duties in an effective and efficient manner, the whole chain of command must have a clear delegation of authorities (decentralisation). The power centres with delegated authority are: the chief executive officer: daily activity, the business development committee and the works committee. 2 Accuracy of financial reporting They must ensure that the financial reporting is accurate, transparent, timely and complete. Project initiatives for improving service It is vital to lay out the entire major project that would be rolled out in the airport Here are the 10 key projects and ambitious initiatives 1. Cargo Flow Enhancement Becoming the cargo consolidation centres at PRD DHL express cargo terminal expansion Precious Metal Depository -- i.e. storage point for precious metal 2. Enhancement of Apron Parking and Hangar Capacity Go ahead for HACEL to build a brand new aircraft maintenance hanger 3. Enhancement of Terminal Facility and Services Terminal facility improvements to cope with Apron and A380 4. SkyPlaza(Terminal 2), Asia-World Expo (beginning of 2006-completed) 5. Privatization that is still on-going that expensive inventories re-audit is pre-realistic; lean stockkeep is not EASY for a major international airport: as it has to balance the availability of service and accounting low-inventory cost requirement All these project initiatives reflect AA determination to provide a constantly evolving platform of high quality services that truly merit HKIAs reputation as their desire to be the best airport in the world inspiration of the staff in the team.

andrew wood 0020-- HKAA improve performance with new initiatives Page 12 Besides, improving ourselves, it would be good have closer alliance with regional airports to see how the competitors are doing e.g. Shenzhen Futian has opened the first air cargo consolidation centre (ACCC) a Joint Venture project between Shenzhen authority and HACTL.
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e-channel for passport clearance (delivering high efficiency and utmost security biometrics of using fingerprint) For mainland-HK traveling, e-channel does look promising that will deliver a faster and more efficient services, esp. during the peak season when the peak season / peak time want to take off for their holiday destination at once.

Visual Enhancement In accounting audit and logistics warehouse stock-taking process; there are some simple, unsophisticated and low-cost ways to make dramatic improvement on Stock-taking process. I would think of a color sticker coding system, for those boxes that are accounted for, say Green stickers on each box that coincide with database records. This way, it is visually enhanced even when the boxes are in the top rack and during the next audit, some of the boxes dont have to be counted again. Besides, the stock-taking process would be the side-kick process of daily routine where the normal routine is un-interrupted. Hong Kong Airport Authority also make boulevard visual enhancement to the extra capacity central concourse on the departures, it put some small trees to put along the sides of the moving walkways with benches put along sides.

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E
Limit of these performance indicator and how to adjust it accordingly
The main issue would be OPERATION EFFICIENCY, for example, there are many factors that would affect the take-off time. Consequently, it might affect the arrival time of certain aircraft to the destination. Ultimately, it might shorten the time that a particular aero plane getting repair and maintenance after it has landed. That might jeopardise the logistics arrangement and timing for the future take off. The diagram of ATC weather information model Airborne Systems: Pre-flight forecast

Weather Analysis report Creation

Flight Data Processing

Other weather sources

Of course, another factors that might affect the aero plane would be the Weather forecast accuracy (that include cyclone, tsunami, wind movement etc) Paradoxically, most airlines also responsible to collect air temp, atmospheric Pressure etc information to feed the local airport or local weather observatory. Here is the diagram for the weather notification system, in order to mitigate the potential weather abrupt changes that might cause deterioration of Operation Efficiency to the major airport Hub, a better weather information system has been further enhanced.

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IN order to produce more forecast>> We could use trajectory prediction by collecting more precise information of wind, temperature and cloud thickness Identification of potential sudden change of atmospheric condition, the airport will use SIGMET For better collaboration of the local airfield, the HKIA will use TAFs, METARs and SPECIs for airfield-centred forecasts and reports. On the other hand, the information gathering and supply is bidirectional. When the aircraft climb or descent, it could also gather vital real time information of the atmospheric condition and supply it to the airfield ( include cloud temperature : indirect measurement of anti-icing spray required for the imminent take-off aircraft's in the waiting area of the runway, as more anti-icing would increase the weight of the aircraft which in effect fuel-wasting ) ==== The HK government together with the airport authority Got the following initiative implemented

Initiative
To strengthen Hong Kong position as a logistics hub To progressively expand the air service market through negotiating more air services agreements to broaden the legal framework for the development of air links To further strengthen HKs air link with the Mainland

Target
To commission and complete a strategic study on logistics service development To conduct negotiations on at least five new air service agreement

Current progress
Study has completed

Conducted negotiation on five new air service agreement and conducted negotiations or review on 18 traffic arrangement We completed the review of the air services arrangement between the mainland and the HKSAR which resulted in an expansion of capacity for airlines The CAD has formulated an action plan to further enhance the runway capacity to meet traffic

To commence reviewing the air services agreement between mainland and the HKSAR

To review the adequacy of runway capacity under different modes of peak season operation to meet

To complete a runway capacity review

ISE 538 andrew wood 0020-- HKAA improve performance with new initiatives Page 15 traffic demand demand in the long term To improve passenger To identify and implement AA has improved the terminal facilities and the improvement measures terminal facilities for procedures for transfer in conjunction with business transfer passengers (enrich transit passengers and partners retail outlet variety and baggage baggage handling speed)

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R References
Cokins, Gary. Airport Authority (Hong Kong, China) Anming Zhang Glad, Ernest. Conference material 1997 Ann M. Brewer, Kenneth J. Button, David A. Hensher
Activity-based cost management in government (for comparative analysis that contrast Annual report / Airport Authority Hong Kong. READ 2000 2004 annual reports Management Concepts, c2003. Hong Kong : Airport Authority Hong Kong

Air cargo in mainland China and Hong Kong Activity-based costing and management Computer performance evaluation : modelling techniques and tools : 9th international conference, St. Malo Handbook of logistics and supply-chain management

Aldershot, Hants, England ; Burlington, VT Chichester; New York Berlin ; New York : Springer, c1997 Amsterdam ; New York : Pergamon, 2001.

IES recommended practice for airport service area lighting

Doganis, Rigas. Peter Forsyth, Kenneth Button, Peter Nijkamp Graham, Anne. DVD Steven Spielberg film

The airport business Air transport

New York, N.Y. : Illuminating Engineering Society of North America, c1987 London ; New York : Routledge, 1992. Cheltenham ; Northampton, Mass. c2002.

Managing airports : an international perspective The terminal

Oxford ; Boston : Butterworth-Heinemann, 2001 Era Films (HK), c2004.

11 titles of books