Managing Operations at Virgin Australian Airline - Case Study Example

Operation Management] Name Course Lecturer Date Introduction Operation management involves the process or the systems used to create goods or provide services. This revolves around forecasting, capacity planning, scheduling, quality assurance, motivating employees, equipment acquisition and maintenance just to mention but a few. Operation strategies are employed in any given company in order to ensure that efficiency and effectiveness are improved1. These two are in other words the most important in an organization for efficiency ensures that the operations are at minimum cost and fast while effectiveness ensures that the intended quality is achieved. Value is the main reason why customers go for certain products or services. This therefore means that, if an organization can offer unique features from their operation management, then a customer’s has no option that to pay extra for it and most importantly remain loyal to the same organization2. Virgin Australian Airline Virgin Australian Airlines in one of the largest airline and the largest by fleet size to use the virgin brand. It was established in the year 2000 and now serves 29 cities in Australia using its Boeing and Embrear jets and Airbus. It is well known for as a low cost carrier using a business model which has aspects of no frills approach of low cost carriers but still offering services which correlate with full service airline. This happens so that they can compete effectively wit Qantas, the major competitor in the market. This Airline operated more than 150,000 flights a year, with a fleet of 98 aircraft flying to 33 Australian and 17 international destinations. This calls for accurate operations and time management if at all they have to remain competitive in the market. One of the issues that have made this airline rag behind is punctuality. Many flights have experienced delays which may result to a loss of customers in the long run. Punctuality Despite much concentration of attention of time keeping or punctuality, this company on time performance is still far below satisfactory levels. At least 70% of all the flights were delayed in more than 25 minutes. This may be attributed to the increasing air congestion and poor operational performance of air traffic control and airport facilities. However, the individual improvement potential within the airline’s disposal is of great importance. It is worth noting that punctuality is very vital as a performance indicator in the airline industry and can be used as a service differentiator mostly for valuable high yield customers. Improved on time performance can effectively result to cost saving. In order to improve the operations of Virgin Australian Airlines, vital insights and mind shifts by the airlines operational management is highly required. In actual facts, punctuality has for a long time being a leadership challenge in the entire organization and therefore should be given the first priority from strategy and planning and most importantly even to the front line operations. Additionally, to enhance this strategy, there is a need to involve the whole of the operation management mechanisms for this is the department concerned with the analysis of the airlines internal processes which can be deployed to improve performance3. It is a point worth noting that, operation management includes the entire department in the flow of communication, where processes can be redesigned or even changed entirely with an intention of being cost considerate, efficient and most importantly effective. The role of operation management is to create an overall sound, performing company, which connects all the departments, while wholly utilizing the resources available. This is the only way this airline can he assisted if at all their performances regarding in time performance has to be addressed. This is due to the fact that, most of the delays in this airline are as a result of simulations, statistical sampling, process monitoring just to mention but a few. Solution and Constraints In order to address this issue, Virgin Australian Airline needs to work on the following issues: Aircraft Availability, Ground operations and departure process and finally on network Planning and control4. Adding the number of aircraft, longer block times and more ground staff and equipments can be a possible solution in addressing this issue. This however calls for accurate analyzing of potential savings from avoided delay costs, failure to which the idea may not be accepted by the controllers for savings are variable while capacity increase builds up fixed costs5. In this airline, there are issues which act as constraints which prevent the system from achieving more of its goal. This being the case, much is needed so as to create more demand of the service by dealing with issues that result to unsatisfied clients6. There are some internal constraints starting with Equipments, which limit the system from producing more salable services, people which is as a result of mental models held by people which causes behavior that eventually become constraint and finally policy. This being the case, there is a need to have there is a need to work as a team in trying to address this issues. Having few workers on the ground and few equipments plus the protocols and procedures followed when giving feedback are some of the issues that have resulted to poor operations in Virgin Australian Airline. The manpower is not properly motivated and this has really been detrimental to the morale of the employee and this may be another cause of slowness in the operations. These three factors have been the most affected issues which have caused a downfall in the quality of services offered and this may in the long run impact the revenue part of the firm by loosing many customers. This therefore entails that, in accordance to the behavioral operations, the staff has cognitive limits and this on the other hand affects their decisions which are hampered by systematic biases7. This therefore means that, borrowing from the behavioral theory of operations, there has to be a clear explanation to the staff showing how the operating systems of Virgin Australian Airlines work and how they can be improved so as to ensure that the services provided align with the set goals and that delays are addressed to avoid unsatisfied customers. When operations are improved in Virgin Australian Airlines, one thing becomes evident. That despite of the constraints, improved quality management will assist the firm to become a world class service provider. The quality of services is also reflected by how the customers are satisfied. When they get late on the schedules, they are dissatisfied and hence the quality of the service is questionable. By improving the quality of the service, this could have direct effect on firm performance by lowering the cost and increasing market share. It is also noted that, quality develops additional capabilities in the form of cumulative capabilities theory8. This therefore entails that, there is equal needs to have the quality of the services offered improved in order to achieve much revenue through increased customer base. The operational procedures have to be changed in order to achieve the required goals9. Virgin Australian Airlines runs a separate planning and control centers for their major operational functions. This has to be changed. In actual facts, they have to be merged or centralized or even work closely together. In this case, there is a need to have integrated processes, systems and common command structures to man all this centers and this will be accurate in addressing the issue of delays. Additionally, the availability of aircrafts is also of great importance. The airline needs to increase the number of reserve aircraft and deploy them carefully. Their deployment should be accurate and not is a sweeping fashion which can cause more issues. Their deployment should be closely monitored so as to avoid using them just as buffer for maintenance requirements. In the same scenario, there should be scheduled maintenance only for unscheduled ones are critical especially in operations with tight rotation plans. Process engineering is another very effective solution that can be used to curb lateness. In actual facts on time performance at low price, with no major capacity investments and which has no due impacts of the sales front can be achieved through process engineering10. This calls for operational diagnostics, design of departure processes and adhering to improved measures must be implemented. The empowerment of the front office staff discipline support, good incentive schemes need to be incorporated in the operational management in Virgin Australian Airlines. There is also a need to have databases which monitor and evaluate performances in the overall departure process. This ensure that the origin of delays is identified and most importantly also detect the impact of the overall delay rate. This can be implemented through the use of systematic top down approach which at times asks questions as to what really caused the delay and the remedy which is the most effective. The operation management at the strategic level will have adverse impacts the airlines effectiveness on how it addresses its customer’s needs. This therefore means that, every decision must correlate with the corporate strategy11. The decisions made in this level also are operating constraints which are the terms of operation both the intermediate and short term. This is whereby the operation management has to address the number of staff on the ground and why they are needed. This therefore concludes that, these decisions in the long run become operating constraints under which operational planning and control decisions are made. Each employee must receive instructions from one person. This is due to the fact that, more than one line of command conflict in instruction and confusion in any duty. This will ensure efficiency and most importantly, feedback can be received adequately and addressed amicably. When there are diverse command stations, the staff may not be free to report any incidences and this will in the long run be detrimental to the performance of the employees and the quality of services provided. Applying all the underlined solutions will need a critical decision from all level of management12. This is due to the fact that, business strategy depends on the market requirements which are underlined by the customer desires. Then the environment is also of great importance for it is the one that concentrates with the competition, regulations and technological advances. Then finally the organization competencies are also of great importance for they underline the culture, strengths and weaknesses. Above all, every decision must be aligned to the goals and objectives of the organization. Operational strategies require one to add values to the customers13. This being the case, there is a need for the operational management department in Virgin Australian Airlines to make sure that their services are punctual and therefore different from other airlines. When customers feel that their schedules have not been interfered with, then they will feel that they have gotten a value for their money. Challenges There are diverse challenges associates with these critical decisions. Just like any other strategy, it is going to cost the firm some amount of money, even though later it is going to save a lot of money. Approving the same by the management will not be an easy scenario and therefore it will be one of the challenges this decision will face. Additionally, not all the staff in all levels will be involved in the implementation of the critical decision14. This means that, in the long run, there may be some resistance to the strategy. In the same case, there may be minimal resources which will mean that the success of the strategy is minimal. This therefore means that, the CEO and the board members or the top level management may not support the strategy implementation adequately. Additionally the current organizational structure may be a barrier to the implementation of the strategy and this may result to challenges associated with the critical decision15. Moreover, information and knowledge transfer is poor in various units of the organization and this may result to challenges while implementing the strategy. Finally, as it is the norm when it comes to the implementation of some critical decisions, there are some unpredicted problems which happen while in the process of laying down the decision and thus this may be a problem. References ALEDA V. ROTH AND LARRY J. MENOR. "INSIGHTS INTO SERVICE OPERATIONS MANAGEMENT: A RESEARCH AGENDA." PRODUCTION AND OPERATIONS MANAGEMENT Vol. 12, No. 2, , 2003: 145-164. Corbett, Lawrence M. "Sustainable operations management: a typological approach." Journal of Industrial Engineering and Management , 2009: 10-30. Elliot Bendoly , Karen Donohue & Kenneth L. Schultz. "Behavior in operations management: Assessing recent findings and revisiting old assumptions." Journal of Operations Management, 2005: 2-16. Koskela, L. and Howell, G., . " The Underlying Theory of Project Management is Obsolote. ." Proceedings of the PMI Research Conference , 2002: 293-302. L.J., Mullins. Management and Organisational Behaviour. 8th ed. Harlow: FT Prentice Hall, 2007. Matthews Rupert and Marzec, Pete;. "Social Capital, a theory for Operations Management: A Systematic Review of the Evidence." International Journal of Production Research, 2011: 3-34. Nader Seyed Kalali, Mohammad Reza Akhavan Anvari, Ali Asghar Pourezzat and Davod Karimy Dastjerdi. "Why does strategic plans implementation fail? A study in the health service sector of Iran." African Journal of Business Management Vol. 5(23), 2011: 9831 9837. Slack N., Chambers, S., Johnston, R. . Operations Management. . 6th edition, Harlow: FT Prentice Hall, 2010. Sterling, John. "Translating strategy into effective implementation: dispelling the myths and highlighting what works." STRATEGY & LEADERSHIP VOL. 31 NO. 3 , 2003: 29-34. Vastag, Gyula. "The theory of performance frontiers." Journal of Operations Management 18 ., 2000: 353–360. Read More