One of the things that becomes clear to me as I read through the news posts about our industry is that the airlines who will survive and prosper are those that can deliver on two concepts that seem to be diametrically opposed to each other: 1) The relentless drive to cut costs, and 2) the absolute need to innovate and improve service performance and quality.

It requires major cultural change, in my opinion, and I don't think alot of mainstream airline employees get it. Am I wrong about that? How are you doing it where you are?

I am not sure these two items are diametrically opposed. In fact I think they are one in the same.

Historically, we have tried to cut cost through transacitional methods. IE. reduce the input cost of one activity by reducing labor, material, production costs at the individual piece part level. This tends to lead to local optimization and sytem suboptimization.

Think of it this way, you have a production line in which your customer demand is 10,000 widgets a day and you are justifying a new piece of equipment. Through your equipment analysis you can justify a machine that can produce 20,000 widgets a day because of how low it drives per piece production cost. However one of the other existing downline machines in your production line can only produce 5,000 widgets a day.

If you just focus on the indivdual machine, you would optimize its production, but suboptimize the overall production system. This is due to the fact that you have a downline 5000 widget per day bottle neck and a 10,000 widget per day customer demand. If you ran the new machine at its justification capacity, all you would be doing is creating a baklog of inventory at the bottle neck, expending raw material, using up tool cycle time and still only producing half of the customer demand.

I believe we have to find ways to do more with less.
We have to look for ways in which we can transform the overall systems. You can do this multiple ways, buthte two that come to my mind is to redesign the process at the system level to increase throughput and/or increase the production quality of the current system so you reduce waist and cost for the same production level.

What I was thinking about were the tradeoffs of the triple constraints. I generally agree with you with regard to reengineering of systems and processes, but what about those systems that hinge on a lot of human behavior, during and after the cost-cutting and downsizing? Some may say that service performance has improved, contrary to triple constraints, but is this really due to redesigned processes or systems, or something else? And if something else, what should the response of the project manager be?