Two-Star Airline - Assignment Example

Operations management What are the similarities and differences in the operations management of bmibaby and in the case of Fuller, Smith & Turner PLC (Brewery)? Your name Your grade course Date What are the similarities and differences in the operations management of bmibaby and in the case of Fuller, Smith & Turner PLC (Brewery)? Introduction Bmibaby is a low cost airline owned by the BMI Lufthansa group. It is a relative newcomer in the world of airlines and flying and has faced a fair level of challenges since its inception. The focus of concentration and the core competency of this airline is cost reduction which it achieves by multiple ways. Though quality is regulated and monitored by the airline but it is regarded as a two star airline which provides cheap flights. Fuller, Smith and Turner PLC is Britains only remaining traditional brewery or so they claim to be. It is one of the oldest brewers in London and therefore possesses an old world charm about its services. It was founded in 1845 in Chiswick as the Griffins brewery. The logo for the Fuller, Smith and Turners brewery states that quality, service and pride are provided in equal measures by them. The main product of the company is beer and it also operates pubs. Compare and contrast The geographical area that Fuller, Smith and Turner and Bmibaby cater to is the same. Both of them are located in England but there is a huge difference in the market they cater to. There is a huge difference in the history and background of both companies. The brewery is well known because of its ancient roots and traditional methods whereas Bmibaby is a company which hasn’t even completed a decade of existence. Operations strategy Smith, Fuller and Turner currently own 363 pubs and supply their products to them. The range of products is very wide and includes Chiswick Bitter, London pride and ESB. A major factor of their success is the companys recent acquisition of the Gale group which added another 111 pubs to its empire. This move ensured the elimination of a major competitor from the scene. Besides that Smith, Fuller and Turner are well known because of the quality of their products. The Chiswick Bitter has been known as the Champion beer of Britain and the record has been unmatched. The brewery also operated by adding more and newer beers to its portfolio thereby reducing monotony of products. Michael Turner, the CEO of the company once said that We have a long-term strategy, strong balance sheet, excellent cash flow generation and an experienced management team and are well placed to meet the challenges ahead. (Review) In contrast Bmibaby works by providing its services at the lowest cost possible. They provide services which are already there in the market but its core competency lies in the fact that it custom provides those, thus charging the customer for what it wants. As compared to the brewerys 363 locations, it operates from four main locations to 30 European destination. It manages costs by not charging for baggage when the customer doesn’t carry it, reducing legroom and other such cost cutting measures. When providing premium prices, it often compromises on quality and therefore is rated a two star airline. Even though the quality of services was low as compared to other airlines, it was rated the best no-frills airline. As Bmibaby is a newer venture, it cannot afford to grow by acquisitions. To grow it further cuts costs by laying off employees or using cheaper locations as bases. Bmibabys strategy is also weak. It operates in a market which is already saturated due to the presence of competitors like Easyjet and RyanAir. Though it a strong market position now but the absence of a strong niche is strongly felt. Design Turner, Smith and Fuller juggles both brewing and the pub and hoteling business. It acquires hotels and pubs and supplies them quality beer from its brewery. Besides that the pubs also serve quality food and the company has expanded its business to introduce hotels. Most of the pubs are located in London or the Southern region so supplying is easier. The brewery also exports its beers. The brewerys products are in the maturity stage of development whereas Bmibabys low cost airlines are still a part of the growing market. Bmibaby owns a fleet of 14 aircrafts (Bmibaby-details and fleet history) which operates from the Midlands. The Midlands are the bases for the airline as they provide an affordable base. It only operates on routes which are profitable and are demanded by the target market. The level of operations is still limited as the airline is still in its infancy. It uses demand management systems to utilize its aircrafts for maximum efficiency. They follow a fixed schedule with minor changes to handle the high demand timings. Planning and control For Turner, Smith and Fuller, long term planning encompasses which pubs to buy and how to expand their operations. Bmibabys planning includes how to get the most market share and get an edge over competitors. For the brewery, effective advertising control as well as ensuring that the regular processes of quality management and production are taking place are processes which are controlled. Both the brewery and the airline have to ensure time management in its operations. Achievement of time effective time management is more crucial and difficult for the airline as compared to the brewery. Bmibabys tries to overcome marketing and branding weaknesses. Though the company struggles to maintain its competitive position in the market it cannot afford to spend a lot of money on marketing and advertisements. Even then Bmibabys plans and controls all operations on a stringent budget. It has made multiple partnerships to boost its image and claims that it provides a branded feel to its services. Cost control at Bmibaby is very strictly monitored so as to avoid the company from making losses. Flights causing costs are delayed and routes which present losses frequently reviewed and are cancelled in favour of more profitable ones. Bmibaby like all airlines has to control flight timings and ensure that flights run as per schedule. Supply chain management Fuller, Smith and Turner use a supply chain management software since 1997. The software increased the companies efficiency and also automate the accounting and management system. This system has now been integrated into including payroll, , Electronic point of sale) systems in the pubs, budget, business intelligence systems and the rescheduling of vehicles. It uses mechanized keg machines to ensure that the supply is quick and regular. An Ecommerce system has also been developed and an ERP (Enterprise Resource planning) system is also under consideration. For an airline an Ecommerce system is integral and thus it is no news Bmibaby has an online booking system. To ensure effective supply chain at low cost, Bmibaby outsources most of its groundwork. It works in close coordination with advertising agencies and travel agents to ensure that its seats are utilized. It manages peak time demands by using more flights. It uses digital research to get customer feedback and plans its operations accordingly. Quality and performance Turner, Smith and Fuller are better known for their premium quality and unique services. They are the market leader in the services they provide and their performance has been stable. The companies profit increased by 11% in the current year (Great). The proof of the superior quality is that Chitswick Bitter and ESB has been rated the Champion brand of Britain. Thus the brewery doesn’t compromise on quality and leaves no stone unturned in ensuring that premium beers reach the market timely and regularly. Bmibaby claims that it is on the highest quality spectrum of the low cost airline market. There is a variety of customer opinion about that flights have been cancelled due to budgeting in the past and the customers have not always been happy with the service. (Bmibaby customer review). Nevertheless since the market area which Bmibaby covers is low cost airlines and thus such fluctuations of quality and service are to be expected. Performance of the airline has also been a bit dodgy as the company has reported losses in the recent years and the new management under Lufthansa tries to create synergies and create profits. Conclusion Since Fuller, Turner and Smith and Bmibaby provide entirely different services to different sectors of the market their operations are completely different from each other. Though both of them are devoted to gaining more market share but the strategies they employ to do so are completely different. The brewery has grown by both horizontal and vertical integration as it has acquired pubs to supply its beer and also acquired the Gales brewery. The brewery allows innovation by introducing more lines to its already varied portfolio and ensures that the quality of products is the best. In contrast Bmibaby tries to get market share by emotionally targeting the customer through superior branding but uses its strength of low costs which is often used as an excuse to compromise on quality. It has grown by retrenching and selling off its assets and cancelling routes which is often done at the cost of both customers and employees. References Bmibaby customer review. 19 December 2010 . Bmibaby-details and fleet history. 19 December 2010 . Great, William. Fuller, Smith and Turner financial results. 20 November 2010. 19 December 2010 . Review, Business. "Fuller, Smith & Turner reports adjusted profits up four percent." Business review Europe 10 July 2008. Michael Lewis, Nigel Slack, Operations Management: Critical Perspectives on Business and Management, Routledge, 2003 Read More