The Role of Systems and Operations Management at Airbus - Case Study Example

Name: XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Institution: XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Professor: XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Course: XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Date of Submission: XXXXXXXXXXXXXXXXXXXXXXXXXX Table of Content Systems and Operations Management ............................................................................... 3 Executive summary............................................................................................................ 3 Introduction....................................................................................................................... 3 Discussion.......................................................................................................................... 4 The Role of Systems and Operations Management at Airbus........................................... 4 Updating Airbus’ Information Systems and Operations Management.............................. 7 The Role of Soft System Methodology in Analyzing and Defining the Business Requirement of Airbus................................................................................................................................. 9 The People, Technology and Organisational Issues Involved in Improving the Operations at Airbus.................................................................................................................................. 13 Conclusion and Recommendations..................................................................................... 15 References........................................................................................................................... 17 Systems and Operations Management Executive summary As a result of the rising competition in the industrial operation in the world today, systems and operations management form the most imperative area in which the companies can gauge their competitive advantage (Salvendy, 2001, pg 22). The paper will look at system and operations management using the Airbus Company case study. Under this, the paper will focus on the functions of the system and operations management to the company, how the company has taken advantage of its system and operations to find competitive advantage. Some of the failures in the process shall be of major concern and ultimately recommendations will be made to strengthen the company’s operations. Introduction Operations management is a section of management that takes into consideration the supervising, designing, and redesigning industry functions in the provision of goods and services. In this case, the management makes sure that business activities are effective in terms of utilizing the little available recourses. The activities that transform inputs into outputs are well controlled to maximise on productivity. In summary, the activities that are involved in operations management comprise of product manufacture, improvement, assembly, and ultimately distribution. This paper will analyse a case study of Airbus in relation to systems and operations management. This will include the determination of the functions of systems and operations management at the company, the need for updating of the information systems and operations management as well as how people, technology and organizational issues affect the improvements at Airbus manufacturing company (Salvendy, 2001, pg 73). Discussion The Role of Systems and Operations Management at Airbus In essence, systems and operations management is a field in business undertaking that concerns all the activities of a company. This runs from the production of goods and service to the point of consumption (Slack, Chambers & Johnstone, 2010, pg 112). These activities usually involve people at work to the technological machinery which is applied to produce goods that can satisfy the needs of customer and at the same time maintain the company’s profitability. Systems and operations management is therefore imperative in any business as it determines the decisions made within the company about the running of company activities. This has to put into consideration the strategic plans of the company and how changes would be implemented to accommodate new ideas for the well being of the company. Looking at Airbus Company, this is one of the main competitors in the manufacture of airplanes getting competition mainly from Boeing Company. The system and operations management is therefore important for the Airbus Company to weight its market standards and how to make changes to meet clientele requirements. This has been well illustrated in the case study when the company intends to venture into new products that can reduce delays and increase profitability of the company. In the first place, the company through the system and operations management carries out a survey of the need to construct a larger passenger aircraft. For safety of not losing out when they venture into this activity, the company’s operation system consulted with the major competitors in the market so that it could be established whether they have the same ideas or not. The role of the operations and system management is to offer a systematic or step by step procedure into the production of a good or service up to the point this product will reach clients (Slack, Chambers & Johnstone, 2010, pg 132). I n the first place, the Airbus company generated an idea of developing super-large passenger aircrafts. This was in 1991 when they asked their main rivals in the market of their views in developing this kind of product (Salvendy, 2001, pg 42). This served as a roadmap for the competitive advantage expected between the two companies. It was them fortunate for the Airbus Company when Boeing Company decided in 1993 not to venture into the same product. There was minimal competition for the Airbus Company in constructing the super-large passenger aircraft. The main focus from clients therefore shifted to the Airbus Company and it was its responsibility to deliver to the market. Since the systems and operations management is more applicable to the assembling and manufacturing company, the Airbus Company had an upper hand as the activities of the company took place in diverse factories. This has an implication that different activities are carried out in different sections before an ultimate product is reached at the central place. The operations and systems management also looks at the expenditure in the production of goods and services so that such costs are minimized as far as possible. To capture the market, Airbus decided to make a special engine instead of relying on the already available models. The company had a central assembling plant in Toulouse although parts were manufactured in different factories. This is the main focus of the systems and operations management in which sections are created for the company and each accomplishes their work before assembling is done. In this case, the engine for the super-large passenger aircraft was made Rolls-Royce before delivering the same to the Toulouse for the final assembling of the aircraft. On the other hand, the wings for the aircraft were completed in the North Wales factory. In addition, the preparation of the new aircraft was done through expansion of the airport particularly in London’s Heathrow airport. It is therefore clear that the systems and operations management involved such preliminaries before the actual production of goods is done. However, the company’s systems and operation management experienced a number of flaws particularly in the delivery of the product into the market in good time. This was especially seen between the periods of completing the assembling of the aircraft to the launching into service to the customers (Salvendy, 2001, pg 31). As noted, this had three levels of delay in which blame is laid upon the management for delaying to inform all the stakeholders about what was wrong in the system. The delays resulted into problem in the management team whereby a number of top managers decided to resign. The contribution of the systems and operation management towards prevalent delays is seen in the complexity of the product to have ever been built and therefore required some good time and planning to reduce risks as much as possible. This was aimed at achieving customer satisfaction so that the gap between clientele perception and satisfaction is reduced. The company as well experienced internal rivalry so that work could be balanced between the French and Germany industries of the Airbus Company. There was no integration within the company and this affected the system operations management ultimately causing the delays in releasing the aircraft into the market. The disappointment as exhibited affected the clients as well who had developed high expectations for the coming aircraft only to be told they should wait for some period of time. However, the release eventually proved to have been a good product even after being delayed (Salvendy, 2001, pg 33). Updating Airbus’ Information Systems and Operations Management In the contemporary business activities, information systems and operations management forms an integral part of any organization this is opposed to the conventional business activities in which every operation in the company was carried out manually. It is imperative to note that information systems offer more reliable and timely information that is pertinent to the operation of a business. In the information systems and operations management, there are three areas that form the pillars of an organization (Khosrowpour et al, 2002, pg 27). These include the kind of technology applied in the organization, the information received or disseminated within the company and finally the kind of people at work. Talking of people within the information system management, the focus is usually on the right man at the job. Expertise forms an important tool towards the success of any business activity. A close look at the information systems and operations management of Airbus, it can be realised that there is a big problem which has in fact resulted into the delays of releasing the product into the market (Khosrowpour et al, 2000, pg 40). The information systems and operations management at the company in the case uses manual means to carry out most of the activities. These are conventional means that were used decades back and therefore as a result of technological advancement, there is need to update the information system and operations management at the company. As explained by one of the workers at the company, the delay in releasing the aircraft into the market followed the fact that electricians had to resolve the wiring problem within the design before releasing the product into the market. On the operations side, there was need for the engineers to adjust the computer system blueprints for future use in other aircrafts. This is a less developed technology application of the available resources which should be updated for efficiency in the company. According to the team leader, Sabine Klauke, installation in the computer systems normally has to take two to three weeks. Because of the traditional information system and operations management systems being used, it forced the company to take four month to resolve such small issues. This raised pressure on the engineers who had to keep up with the demand in the market as a result of the traditional means that were being used. The wiring process has taken a lot of time due to the manual way of doing it as well as being expensive (Khosrowpour et al, 2004, pg 55). This brings into light that there is need to update the information system and operations management. There has also been failure in communication between and among the respective factories of the company which has forced a large number of people to be involved in solving a small flaw at hand. From the case, it is clear that activities that had been earlier planned to occur did not take place as a result of lacking a more integrated information system that could store data for inventories purposes. For the Airbus Company, there is need to update the enterprise resource planning systems so that newer technologies are incorporated in the production such as wiring instead of relying on conventional methods (Khosrowpour et al, 2004, pg 210). In the case the information system is updated, company’s operations would be improved not requiring up to one thousand people from another factory to fix a wiring problem. This would also help in the reducing of cases of delays during production so that service to the consumers is rendered at the right time. For instance the company could incorporate soft system methodology in establishing its needs so that all material are availed at the right time and only the right people are at the job. Updating of the information system and operations management at Airbus should involve information keeping within the company’s database so that future productions do not experience the same problems (Meyler et al, 2008, pg 106). Communication between member factories should be updated through the use of integrated computer networking for all information systems within the company. This will facilitate easier communication between the company and its sub-industries as well as updating the customers on the improvements made or problems experienced within the company’s machinery. This will serve to improve the relationship of people within and outside the company so that there are no further resignations after a small hitch is experienced (Meyler et al, 2008, pg 109). The Role of Soft System Methodology in Analyzing and Defining the Business Requirement of Airbus Analysis of a business is one of the main pillars that explain the trend in which a business is taking (Ahoy, 2008, pg 207). It is inevitable to avoid analysing business activities if at all the company wishes to miles ahead of other competitors. In the analysis of a business, there are a number of models that have been developed over time to help business analysts establish problems within the organization and recommend how the flaws can be fixed. The kind of problem at hand usually determines the kind of model to be used in analysing the business. A good example of a model that can be used to analyse Airbus Company is the Soft System Methodology. This follows the fact that the problems facing this company are not well defined by the different stakeholders like the clients, the owners and the workers within the company. This approach to analysis of businesses was developed by Professor Peter Checkland and is based on business thinking technique. This kind of system think has its basis on the fact that investigation into the problem should not be handled in isolation but in relation with each other. The soft system method of analysing a business should however be in agreement that actual world flaws are not easily well-defined (Mahadevan, 2011, pg 62). It is also in line to the view that such issues like those in the Airbus case study are unstructured. This system seeks to solve the problem and not just identify or define the problem and leave it at that stage. It incorporates a wide range of possibilities towards reaching a solution to the flaw. The kind of problem has to be critically analysed before establishing the way out of the issue. Based on this soft system methodology, a number of techniques towards reaching a solution were put forward. This involves a number of stages structured to advance the analysis process through considering the unstructured business problem like in the case of delays in the Airbus Company. This ultimately leads to a sound solution being reached (Mahadevan, 2011, pg 71). Real World Conceptual thinking It is clear from the figure above that a number of the soft systems function in the actual world while the rest only take place in conceptual thoughts. Following the case study under study, the role of the soft system methodology for the company analysis shall be considered only through five processes. The problem identified at the company and it is unstructured is delays in the launching of the aircraft into the market without prior information being given to the stakeholders. In this case, the stakeholders are place under the CATWOE model comprising of the clients, actors (engineers in this case), transformation (holding of higher capacities of passengers by the aircraft), worldview (which may include the competitors perceptions of the action taken by Airbus company to build a super-large passenger aircraft), owners and finally the environmental problems posed by the plane or the process of building this aircraft (Chary, 2009, pg 64). At the second stage, the problem of delaying the release has been expressed three times to the clients and therefore the company has a number of explanations as to why this happened. Some attribute to the company’s internal conflicts while other say it is because of the technology employed in the information system and operations management. Following investigation, it is realised that technology should be updated so that the company moves away from the conventional ways of construction to more contemporary ones. This is followed by building of a conceptual model of what the clients expect from the company. The problem is geared towards being fixed based on the clientele perception. These ideas are then supposed to be compared to the problem at hand like technological inefficiency so that a final decision is reached to fix the issue one and for all. The role of this method is therefore to find out the way Airbus is performing in the production area and find a solution based on the views of customers and other stakeholders. It is perfectly suited to fix the flaws within the company following the kind of problems identified as being unstructured (Chary, 2009, pg 67). The People, Technology and Organisational Issues Involved in Improving the Operations at Airbus In the improvement of the operations at Airbus Company, three important areas had to interact closely for the effectiveness of production. These include people, the technology used and finally organisational issues (Mahadevan, 2011, pg 89). The improvement that is desired in this company was to reach the goals of the company at the most cost-effective manner possible. Within the organization, people are a vital part to the success of the organisation. This usually refers to the kind of person at the job. Whether this individual is qualified or not is of significance. It is important that the right person is put at the job to maximise production. People issue that may lead to the improvement of the company include the attitude towards their work. People usually vary in their perception of situations in life following their cultural beliefs and backgrounds. Airbus Company used the right people to contribute towards the success of production. This was realised in the way delays arose due to small problems within the wiring of the aircraft. It was better for the operations management team to delay launching of the plane and find the correct people for the job so that the problem is fixed than risk having bigger technical issues emanating at a later stage of the aircraft’s operation. Since in the initial stage the company had used incompatible software to design the 500km wiring, it was compelled to ferry the right manpower of up to 2000 people from Germany to come and fix the problem (Mahadevan, 2011, pg 100). Technology is similarly significant in the success of any industrial activities (Mahadevan, 2011, pg 99). The aircraft at Airbus had to be delayed three times because of the wrong technology being applied in building the product. In the first place, the software used in designing the 500km wiring was incompatible forcing the company to delay the launch for the problem to be fixed. In addition, fixing the problem took a whole four months since manual means were being used by the company to fix something that could have only taken two to three weeks to complete. More advanced technology in the information system and operations management becomes of vital importance in the improving of efficiency of production at the company. This issue can be fixed if the company incorporates more current technology in building its aircrafts like the computerised system for communication purposes as well as keeping of inventories. Organisational issues comprise of the leadership or management structure of the company. This should be based on the expertise of the managers in the assigned fields of control. When management is streamlined, activities at the company will move more smoothly as opposed to the current situation of conflicts (Wilson, 2001, pg 240). This area also encompasses the financial sector of the company as the delays led to heightened expenditure in the construction of the aircraft. This should be corrected so that the company does not strain in completing the aircraft according to the initial budget. Organisational issues as well comprise of the external competition for the same product. The company managed to improve due to reduced competition from Boeing Company that settled on smaller aircrafts rather than the ones Airbus had ventured into. Conclusion and Recommendations Systems and operations management is imperative for the well functioning of any organization. This is a field that looks at the supervision, designing and redesigning of industrial activities to establish the production rate of an industry. The paper has analysed Airbus case study in relation to systems and operations management in which a number of flaws have been identified within the company’s production activities. The company ventured into the production of super-large aircraft for passenger. There are a number of operations system management activities that were carried out in the company. However, a problem emanated based on the launching of the aircraft which experienced a number of delays. It was established that the main problem lied in the information system and operations management which require updating so that production is improved on a general scale (Wilson, 2001, pg 243). There is need for this company to use more contemporary technologies in the construction of the aircrafts instead of relying on the conventional techniques that were mainly manual. Communication as noted is an imperative thing in the avoidance of conflict among stakeholders. The paper was therefore divided into sections that analysed the role of systems and operations management, the need to update information systems and operations management in the company as well as the contributions of people, technology, and organisational issues towards the success of the company. References Slack, N., Chambers, S. & Johnstone, R., 2010. (6th Ed). Operations Management. Harlow: Pearson. Wilson, B. 2001. Soft systems methodology: conceptual model building and its contribution. New York: John Wiley and Sons. Mahadevan, M. 2011. Operations Management: Theory and Practice. New Delhi: Pearson Education India Chary, C. 2009. Production and operations management. New York: Tata McGraw-Hill Education. Ahoy, C. 2008. 2008. Customer-Driven Operations Management: Aligning Business Processes and Quality Tools to Create Operational Effectiveness in Your Company. 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