Nostovia's New Airport - Essay Example

Nostovia's New Airport Answer 1 (a): Globalization has indeed led to increasing travel and activities in order to enhance the business prospects. Airports being the entry points of almost all such business ventures have a crucial role in presenting the first impression to the visitor. Therefore, the Nostovia Airport Authority (NAA) will have to make sure that the facilities are good enough at the airport to make the customers i.e. the visitors feel at home. For example, the ‘Baggage carts, small tow tractors, small fork-loft trucks and freight loading equipment’ are the devices which make the life more comfortable for a visitor to the airport. Since the airport is being modernized, therefore it will help if the NAA is able to manage the supply chain of these equipments in such a manner that the airport gets user friendly baggage carts, tow trucks and other loading equipment. The Supply chain for procuring these equipments can be drawn as; Supply chain management (SCM) in general involves managing complex flow of information, materials, and money across multiple functional areas both within and among companies (Faisal et al, 2006). Efficient management of the supply chain helps in value addition in the final product, which ultimately leads to customer satisfaction. Quality of the services provided is ultimately assessed by the visitor while at the airport. In this case, the Nostovia Airport Authority (NAA) requires; Baggage trolleys: to help the customer in carrying his/ her luggage from one place to another. Therefore, such carts should not be too heavy in weight. It should be made up of lightweight material, yet with sufficient strength to withstand daily impacts and comparatively heavy weights. The baggage carts must also be made in such a manner that the while moving the cart, the luggage should not fall on the ground, which might result in more difficulties for the visitor. The carts must have light weight and friction free wheels, which could be easily nudged by the visitor. General complaint about such carts is that their wheels tend to fall apart or become immovable. NAA should try to avoid such situations. Small tow tractors: These types of tractors are generally used to carry some luggage, maintenance equipment, replacement parts etc. quickly to the aircraft. These carts are generally driven by the airport staff, therefore their direct users are the employees of the NAA. But, the effective use of the tractors invariably affects the services being provided to the visitor. Therefore the small tow tractors should also maintain quality standards, in such a manner that they appear as good smart looking vehicles and not an eyesore, as the direct impact of the services of small tow trolleys is quite apparent. Small fork-lifts etc.: These are the equipments which help in smooth loading and unloading of the luggage. These equipments will be termed of best quality if they work in a jerk-free manner, with considerable uniformity in loaded as well as unloaded conditions, while transferring the luggage etc. for the base of the aircraft to the luggage store in aircraft or vice-versa. Couple of times it is observed at some of the airports that the fork lifts malfunction, resulting in long delays in handing over the luggage to the passengers. Similarly at times, due to such malfunctioning, the take off gets delayed because not all luggage has been uploaded into the aircraft. Such incidents leave a bad impression on the customer, and doesn’t help the cause of the airport in value addition. Managing the supply chain is therefore, one of the major tasks in developing the value. Now a days, due to increasing use of the IT and internet technologies, service sector companies are also relying on e-Procurements, which not only saves time, but helps in cost cutting as well. Some of the performance monitors required for the e-procurement process are; i. Time taken in performing the procuring tasks. This should include overall time as well as time taken in different processes involved. ii. Saving in manpower. If only the system results in saving of manpower and the efforts than only will it remain useful. iii. Reduction in inventory management costs. Huge costs are involved to manage surplus inventory items. In addition such storage also results in pilferage and spoilage losses. How e-procurement reduces such costs is required to be monitored on regular basis. Answer-1 (b) i. There's a fundamental distinction between strategy and operational effectiveness. Operational effectiveness is marked by the returns on investments and other financial details, but Strategy is about taking a long term perspective, making strategic moves, and trade-offs. To keep the aircrafts in shape and the airport fully operational, it is indeed a prerequisite that at some of the crucial spares are kept in the inventory. Because, when the plane gets delayed on account of non-availability of such spares, the discomfort to the visitor will prove to be detrimental to the reputation of NAA. Airlines industry is the kind of industry which requires huge investments yet the level of competition is such that airlines often keep investing for years together and keep waiting for break even. The industry is investment intensive from the beginning, and requires continuous replenishment throughout the operational activities as well. Therefore, it requires a sound strategy on the part of the Director (Aircraft maintenance) to make it a workable solution. Some of the strategies that can be adopted in relation to the two different categories of parts viz. the parts common for more than one aircraft and the parts required for a specific aircraft are; The common spares can of course be stored in adequate numbers within the stores of the airport, with a predefined minimum level of the items, so that additional quantities can be ordered whenever the spares’ quantity falls below the level. At times it may happen that not many spares are required by the aircrafts, which is bound to happen since the aircrafts are the new ones and the airport facilities itself been upgraded recently. But we must be prepared for any eventuality and must not be found wanting even for trivial spares, when the need arises. As for the non-common spare parts, it is obvious that there won’t be many suppliers for these items; therefore NAA will have to enter in a strategic tie-up with the suppliers, so that the company provides these spares within least possible time. But in any case we will have to store couple of such items in our store as well. NAA must resort to measures towards competitive bidding for the supply of common inventory items as this would result in competitive prices and a cost savings. ii. Inventory management happens to be an integral part of corporate strategy of a service organization. The concept of Just-in time delivery, shipping & receiving, selecting and managing suppliers, planning and purchase decisions are all part of inventory control and inventory management. For ensuring rapid delivery of spares, which are not common stock items, but crucial for the operation of aircrafts and services, we require; Completion of paper work in least possible time Authorized communication to the supplier in least possible time Reducing the transportation time All this is possible when we have a reliable and functional channel of communication with the supplier. With the advancement of technology, communication channels have vastly improved, but that too requires adequate safeguards to avoid any communication gap with the supplier. E-procurement is one such solution which not only reduces the procurement time, but helps in speedy delivery of the authorized communication from NAA to the supplier. But, for effective functioning of a e-procurement system we need to have adequate safeguards to avoid any frauds or communication gaps. Whitefield Diffie, the inventor of public key cryptography, said (Goodwin, 2005), “Business would face new risks in the future, as more computing power is outsourced”. That’s indeed the biggest concern in moving from a manual system to an online system. Many of the efficiencies of an online system flow from improved handling of information, reduction in time consumed for transcribing the data, scope for errors is reduced. But the biggest concern is, what if some of the critical information land into some mischievous hands. Cases of hacking government sites are not new. Therefore we need to take care of all such aspects. iii. Having reliable communications and logistical services is a prerequisite not only for the business prospects of the company but also for entering into coordinated strategies with the suppliers, who play a crucial role in our business. Some of the key requirements for maintaining robust communication and logistic channels are; Mechanism for tracking the orders Mechanism for tracking the supplies with the help of devices like RFIDs. Eliciting the contribution from visitors, employees, suppliers etc. Organizing the workforce by assigning them proper responsibilities Inculcating the spirit of service amongst the workforce. Motivating the workforce by being liberal with appreciation in different forms, for the good work. Developing an information system for monitoring and coordination activities. Making use of sound judgment regarding the credibility of suppliers, their previous business with the company, their past behavior etc. NAA must also focus its attention towards the training and development of its maintenance staff, so that the costly items are not underutilized. It is worthwhile here to mention that the cost of training and development must be seen as an investment towards securing long life for the aircrafts. Proper monitoring and control mechanism must be in place for all such procurements and subsequent disbursal of these items. Answer-2 (a): Disappointment of Mr. Niran Keekiat is understandable to some extent, but Mr. Niran too must realize that today we are in the era of globalization and quality has now become an important tool for remaining competitive in the industry. If sometime in future, Niran desires to expand his business to other countries then the quality consciousness amongst his workforce will help him in taking on the international players. Moreover, if Novostia has decided to have a tough competitive standard, that means the rulers want the visitors to feel comfortable with quality services at the airports. The four key aspects to the refueling services are; Safety: Safety of the men and machines of Novobenzo company as well as the aircrafts, the passengers and the crew members. Accuracy: The amount of fuel required must be accurate enough i.e. the company must use standard and reliable measuring devices. Timeliness: In airlines industry is a very competitive industry and time factor is one of the crucial aspects of this competitiveness. If the aircraft fails to take off at the designated hour, that could mean a series of delays for the aircraft. Billing systems: The billing system must be reliable with backend support, so that if an anomaly arises, it could be resolved by tracing back the transactions. To ensure these key quality aspects, the THREE most suitable quality assessment tools for Novobenzo company could be; i. Pareto Analysis: Pareto analysis is carried out with the help of a Pareto diagram which takes a graphical overview of the process problems. The problems are ranked in order of the most frequent, down to the least frequent, in descending order from left to right. This way we can the management can have a first hand knowledge of the frequency of fault types. Thereafter management can take a considerate view of these faults and set it priorities to do away these faults/ problems. The basic underlying rule behind Pareto's law is that in almost every case, 80% of the total problems are caused by 20% of the reasons. These reasons could be related to HR, machinery, processes etc. This way Pareto analysis allows the management to focus on these causes so that majority of the problems are resolved. Once these aspects are taken care of, the company can very well boast of maintaining quality standards. For example the tool can be used in Novobenzo by detailing the problem areas as below; Date: Total fuel used No. of aircrafts fueled No. of airlines served Problem areas Total Quantity approx Percentage Percent distribution Spillovers Delays (No. of delays) Delay (duration) Staff shortages Pipeline malfunction Breakdown of pumping trucks Other reasons This data is collected for a predefined time period, say for a week, fifteen days or a month. Thereafter, the data is correlated to make comparisons and drawn on a Pareto chart to arrive at a decision. ii. Cause and Effect analysis i.e. fishbone diagram: This type of analysis will help the management in understanding the reasons behind some of the major fault lines. For example; If it is found that the cause of spillovers is the excessive force with which fuels is being injected into the fuel tank of the aircraft, then the force can be reduced If it is found that the staff is late in responding to the calls for filling up fuels, which in turn might be because of the delay in sending across the message to this team from control room or the vehicle is slow in starting or, the location of the vehicle is such that it has to take a long route to reach to the aircraft. The billing system is facing some problems on account of malfunction in the computer system, printer etc. Once the cause and effect diagram is ready, we can do the needful by taking measures to do away with the problem. iii. The Check Sheets: Such a check sheet helps in keeping a record of all the defective items, parts and similar types of faults can be grouped together for future reference. These check sheets not only help in doing away with the recurrence of such defects in future, but these are also a source of training for the workers as well. Some of the practical aspects are known only when the staff keeps working on the defects and gets the hands on training. Answer-2 (b): Quality is a customer’s determination and not the manufacturer’s or service providers’. The modern view of quality is that services should satisfy the customer’s needs and expectations in every respect on a continuous basis. For a successful total quality management approach, eight key elements are1; Ethics Integrity Trust Training Teamwork Leadership Recognition Communication Therefore the two quality management techniques that Novobenzo Company can adopt in order to achieve ‘best in class’ performance are; i. Effective communication with customers: Communication forms a crucial part of managerial activities. Regular interaction with customers not only helps in getting a feel of what their expectations are, but it also helps in getting a feedback about the effectiveness of company’s services. ii. Training and Development of staff: The workforce is the key interface between the management policies and the customers. They are the one’s who actually help in implementing the policies and bringing in quality into the services. The human element is the most important input in any service enterprise and it is one of the most difficult one to control. This factor operates from the lowest worker who actually provides the service to the by use of manual effort, right to the chief executive who controls the whole complex. The lower level worker may not be able to provide quality services on account of; a. Incompetence b. Lack of awareness c. Carelessness and lack of interest Therefore, these workers are to be trained and developed for delivering quality to the customer. When the worker realizes that his workmanship is being valued for quality improvement programmes, this is bound to stimulate his/her interest in quality. References: 1. ASQ (2007). 7 tools of quality. Available online at http://www.qualityspctools.com/ (October 16, 2007) 2. Faisal, Mohd Nishat; Banwet, D.K. and Ravi Shankar (2006). Mapping supply chains on risk and customer sensitivity dimensions. Industrial Management & Data Systems. Vol. 106 No. 6, 2006, pp. 878-895. Emerald Group Publishing Limited. 3. Goodwin, Bill (20 Sept, 2005), ‘Expert warns of growing risks of internet-based computing power’, available online at http://www.computerweekly.com/Articles/2005/09/20/211861/expert-warns-of-growing-risks-of-internet-based-computing.htm (October 16, 2006) 4. Murphree, Julie (2007). Building a Better Supply Chain Professional. Available online at http://www.sdcexec.com/online/article.jsp?id=8368 (October 16, 2007) Read More