Managing Operations within Supply Chains: South West Airlines Turnaround - Essay Example

Managing Operations within Supply Chains: South West Airlines Turnaround Introduction This essay is about managing operations within the supply chain of companies. The analysis is based on the case of how the management team of Southwest Airlines reduced the airport gate turnaround times for the planes of the company. The Southwest Airlines management seeks to streamline the operations of the company by reducing the amount of time that the airplanes take between landing at their destinations and leaving for their other destinations. This paper examines the issue of productivity in the operations of Southwest Airlines. The analysis of the issue of productivity in the gate turnaround project of Southwest Airlines is examined using theoretical perspectives regarding productivity in operations management. The paper then presents various recommendations that the airline can use to improve its operations management processes. Overview of Southwest Airlines gate turnaround The rapid gate turnaround project of Southwest Airlines turnaround is based on the need of the company to streamline its operations and increase its level of productivity (Kelkar 2010, p. 337). A few decades ago, the company focused on optimising its operations so that it may gain a competitive advantage as one of the most common low-cost airlines. To speed up the gate turnaround times for its aircraft, Southwest Airlines focuses on three things. First, the company focuses on using standardised aircraft. Currently, the entire fleet of the company comprises Boeing 737 aircrafts (Lauer 2010, p. 136). The company uses standard aircraft so that it can successfully deploy its staff across all its aircraft easily (Lauer 2010, p. 136). Moreover, the company can reduce its overall operational costs because it does not have to retrain its staff members so that they can work in new planes. Secondly, the company uses special facilities for its operations (Gittell 2003, p. 21). It is noted that the company focuses on using facilities at airports that many other airlines avoid (Gittell 2003, p. 21). Therefore, the company is able to avoid the delays that are associated with using airport facilities that are in high demand. Thirdly, the company focuses on streamlining its service offering so that it keeps its costs of operations down. Essentially, the company uses the low-cost carrier model. The low-cost carrier model is defined by the way airlines avoid offering some in-flight services to their customers (Kelkar 2012, p. 337). For instance, Southwest Airlines does not offer in-flight meals (Lauer 2010, p. 136). Also, Southwest Airlines uses the open seating plans to reduce the costs that are associated with other more advanced seating plans that other airlines use (Lauer 2010, p. 137). Key factors in the design, planning and control of operations at Southwest Airlines In theory, operational planning involves making specific decisions on how the strategic objectives of an organisation will be achieved (Tovey, Mary-Anne & Sheldon 2015, p. 45). The strategic planning process normally covers specific aspects of how the tasks within the organisation will be accomplished, the people who will accomplish the tasks and the deliverables that should be expected from the tasks (Tovey, Mary-Anne & Sheldon 2015, p. 45). Thus, the process of operational planning directly arises from and complements strategic planning. Several factors affect the design, planning and control of operations at Southwest Airlines. For example, the operational planning and management processes at Southwest Airlines are affected by the approach that the company takes towards hiring and managing its employees. Human resource management practices play key roles in the success of the company’s operational management processes (Hill & Jones 2009, p. 105). It is stated that the company hires only 3% of the individuals that it interviews every year (Hill & Jones 2009, p. 105). Therefore, the kind of employees that the company hires determines how well the employees fit into the teamwork approach that is used at the company. Moreover, the company needs to develop a competitive advantage in its operations. Kachwala and Mukherjee (2009, p. 30) note that for companies to achieve and maintain a competitive advantage, they need to understand the needs of their clients. It is further stated that companies need to build their service offering to meet the needs of their clients in the most efficient way for them to be competitive (Kachwala & Mukherjee 2009, p. 30). Therefore, Southwest Airlines is faced with the need to compete in the industry based on cost. To achieve cost advantages, the company streamlines its operations and reduces all the unnecessary costs associated with various aspects of its service delivery model. Productivity in Southwest Airlines’ turnaround Productivity denotes the extent to which a company utilises its resources well (Galloway, Rowbotham & Azhashemi 2012, p. 128). Productivity is normally expressed as a ratio of the outputs that a company produces to the inputs that the company utilises in its processes. In general, there are two types of productivity measures: partial productivity and total productivity (Galloway, Rowbotham & Azhashemi 2012, p. 128). Partial productivity measures the extent to which an organisation utilises one of its various inputs to produce its outputs (Shim & Siegel 2009, p. 8). For example, the ratio of organisational output to labour is normally denoted as efficiency (Galloway, Rowbotham & Azhashemi 2012, p. 128). Thus, efficiency measures how well a firm uses its human resources in its normal operational processes. Total productivity on the other hand measures how well the firm uses all its inputs, including labour, capital and other resources, to produce its outputs (Galloway, Rowbotham & Azhashemi 2012, p. 128). Powell (2012, p. 41) notes that the productivity inputs of airlines include labour, capital, materials and fuel. Southwest Airlines, like any other airline, utilises these resources in its day-to-day operations. Moreover, it is noted that the outputs of airlines are measured in terms of the services that the carrier in question produces and which generate revenue for the carrier (Powell 2012, p. 42). Southwest Airlines, like any other carrier, relies on various services for its revenue. Some of the services that generate revenue for the company include baggage fees, passenger revenue, cancellation fees and cargo revenue. Analysis of productivity in Southwest Airlines’ turnaround Productivity at Southwest Airlines can be analysed using the Triple-P model. The triple-P Model describes how the productivity of a firm is tied to its performance and profitability (Tangen 2002, p. 3). In other words, the model shows how the productivity measures of a firm are intertwined with its other measures of profitability and performance and how changes to any of these three concepts affect the others. Under the Triple-P model, the productivity of a firm is measured in terms of the ratio of the firm’s output to that of its inputs (Tangen 2002, p. 3). For Southwest Airlines, its productivity can be measured by comparing the revenue that the firm receives from its various services to the expenses that it incurs when consuming various inputs such as fuel, labour and others. It is important to note that so far, Southwest Airlines has maintained above-average ratios of productivity (United States Department of Transportation 2007). For example, the company has a higher measure of average monthly ratio of passengers to that of its employees (207) than the industry average (106) (United States Department of Transportation 2007). Another important measure that shows the level of productivity of Southwest Airlines relates to average monthly revenue measured in relation to employees. Regarding this measure, Southwest Airlines has a score of 256 which is higher than the industry average of 238 (United States Department of Transportation 2007). Therefore, in general, Southwest Airlines posts above-average performance measures. The other aspect of the Triple-P model covers all performance-related measures of an organisation. In general, the performance of a firm is reflected in the way the firm takes into consideration the quality of its products or services, delivers its products and services fast and meets the needs of its clients (Lee & Johnson 2005, p. 21). It is important to note that the initiative of increasing the gate turnaround times for Southwest Airlines addresses all these issues that relate to firm performance. For example, the overall objective of the project is to reduce the time that the planes of the company waste when they are grounded at airport facilities (Kelkar 2013, p. 338). Thus, the company seeks to improve its performance by increasing the speed at which it serves its clients. Moreover, the management of the company seeks to streamline its service offering by focusing on the core needs of its clients and avoiding non-essential services such as in-flight meals (Kelkar 2012, p. 338). The company also uses an open seating plan to enhance its overall level of performance (Gittell 2010, p. 22). From the foregoing, it is important to note that the project to improve the gate turnaround time for the airplanes of Southwest Airlines can be adequately analysed using the Triple-P model. The specific activities that the management of the company chose to implement have had an impact on the performance of the firm as well as its profitability. In general, the performance of airlines is measured using industry-specific standards that include the following: the extent to which the departures and arrivals are on time, the number of denied boarding, the number of mishandled or missing baggage and the number of complaints from customers (Bowen & Headley 2017, p. 8). There are various important aspects related to the way Southwest Airlines seeks to improve its gate turnaround time. An example of the positive aspect of the process relates to how well the company ensures that its different employees collaborate with each other in the process. To achieve its productivity and performance-related objectives, the company has established a culture in which all its employees from different departments collaborate with others, share information and work as teams (Gittell 2003, p. 31). For example, pilots, air attendants and ground crew teams normally share important information related to flights and collaborate with one another to make the process successful (Gittell 2003, p. 32). Another important positive attribute of the process relates to how the company uses automation to manage its operations and ensure that it operates very efficiently. The entire project is based on a software that the various departments and teams of the company use to share technical data about flights and other operational details (Lauer 2010, p. 138). Currently, the company manages more than 3,200 flights every day (Lauer 2010, p. 139). Therefore, the operational and productivity excellence of the company depends on how well it maintains its system. Recommendations The following recommendations are suggested to help Southwest Airlines improve its productivity and, in the process, improve its performance and profitability. The recommendations are based on the need for the company to perfect the fast gate turnaround initiative that it has successfully implemented and maintained for decades now. 1. The company should address the problems of delayed arrival of flights. It is observed that the company is still struggling to meet the performance targets related to arrival time (Mochari 2014). Because the fast gate turnaround initiative is aimed at reducing the time that the company’s aircrafts stay idle, it is necessary for the company to improve on its arrival time scores. 2. It is necessary for the company to revise its operations to match the new models of Boeing 737s that it is now acquiring. Currently, the new models of planes that the company uses take longer to load (Tully 2015). What this implies is that the company needs to adjust the operational elements of the process of turning around its planes fast to accommodate the new challenges presented by the new models of planes. 3. The management of the company believes that the future success of the company lies in long haul flights as opposed to the traditional short haul flights that the business model of the company was based on (Mochari 2014). However, for the company to succeed in making this strategic change, it should ensure that it does not lose its key productivity efficiencies represented by the rapid gate turnaround initiative. Conclusion In conclusion, the way Southwest Airlines seeks to reduce the time that its planes waste in-between journeys at airport gates can be analysed using the Triple-M model of productivity. The essence of this model is that productivity is interlinked to the performance and profitability of an organisation. Thus, the attempt by Southwest Airlines to reduce the time wasted when planes are grounded at airport gates increases the airline’s overall measures of productivity, performance and profitability. However, it is recommended that for Southwest Airlines to maintain the approach, it should address the new challenges that it faces following the acquisition of new models of the Boeing 737 planes and the realisation that the company still ranks below its competitors regarding arrival times for its flights. 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