Importance of Operations Management for Virgin Airways - Case Study Example

Operations Management Name Course Institution Date Introduction Operations management is a managerial area in work places which oversee, control and design the production process and plan for the business operations to. In addition, it includes other activities such as quality control, logistics, inventory control, evaluations and purchases amongst others. Moreover, it ensures that all of the business operations involved use as little resources as possible and still meet the set or expected end results. It harmonizes the different logistics involved in converting in puts such as energy, raw materials and labor into out puts which are either goods or services. This is achieved by proper management of both technological elements and organizational behavior. Technological elements include tools and machines while the organizational behavior refers to information flow and labor division. More emphasis is laid on effectiveness and efficiency of the processes involved to ensure high productivity of goods and services without compromising the quality. Hence, operation management includes analysis and measures of the internal processes (Mullins 2007: Dess &Lumpkin 2005). The aim of the whole process is to add as much value as possible to the inputs in the most efficient and effective way. For example, if a company produces mango juice, it will acquire mangoes at a price X. In the company, crushing of the mangoes and packaging of the juice will add a value and the packaged juice will retail at price Y which will be much higher than price X (Krajewski & Ritzman 1999).. OPERATION management makes decisions that control the cost of goods and services as well as how they are produced or delivered and hence has a big impact on the total revenue collected by the organization. Different organizations will have varied natured of the operations management due to different nature of the services and products they offer (Voss, Tsikriktsis & Frohlich 2002). Importance of operations management Operations management emphasizes on the techniques and tools used by manufacturing firms to ensure effective and smooth production. The top administration points out the factors that promote sales and customer loyalty. In return, the firm realizes growth accompanied by other benefits which include expertise, profitability tracking and regulatory compliance to evade fines by the involved regulatory bodies (Krajewski & Ritzman 1999). One of the benefits is Profitability management. A healthy operations management ensure that the leaders in a cooperate challenge the employee’s sense and wisdom and train them in ways that will see the firm produce a great output and realize high profits (Johnston & Clark 2005). The executives, for example, ask the employees to come up with new tactics of solving challenges faced in the firm. As a result, the specialized personnel will identify ways and means of enhancing their areas of specialization and the operations managers get ample time to monitor expenses and revenues (Voss, Tsikriktsis & Frohlich 2002). Secondly, operations management gives a firm competitive advantage by handling both internal and external major factors professionally. The internal factors include attrition rates, operating policies and intellectual capital. Attrition rates show the numbers of workers who leaving their job by retire, death or resignation (Mullins 2007). On the other hand, Intellectual capital is refers to the knowledge, expertise and abilities that the firm has collected over its operational period (Krajewski & Ritzman 1999). The external factors mainly involve the competitor’s strategies and the economical state. Consequently, the firm comes up with tactics that are effective enough to deal with the operating environment (Johnston & Clark 2005). Through understanding external and internal conditions, operations management uplifts the firm’s competitive power. This is clearly seen in the SWOT analysis where the business measure its strengths, evaluate the weakness, seek other opportunities and put up measures against threats to its expansion (Stevenson & Hojati 2007: Dess &Lumpkin 2005). In addition, operations management allows the firm to improve or change the whole production line from handling the raw materials to storage of the finished products in order to raise its manufacturing edge a notch higher (Johnston & Clark 2005). This prevents deterioration of quality of either goods or services offered to the end user. Making use of manufacturing tools such as defect trackers, re-engineering applications and warehouse management software assist in achieving this (Krajewski & Ritzman 1999: Voss, Tsikriktsis & Frohlich 2002). Moreover, operations management ensures the firm comply with the set regulations. As a result, the managers evade harsh regulatory decisions and heavy fines that would adversely affect the running of their firms (Scheraga 2004). Departments ensure their personnel perform their duties without compromising the law. A good example is improving safety at work place in accordance with the set standards by the Occupational Safety and Health Administration (Stevenson & Hojati 2007). To add on the list, operations management aids in planning and forecasting the firm’s future endeavors. This is achieved by making use of the available data to estimate possible outcomes for the firm (Voss, Tsikriktsis & Frohlich 2002). To realize the forecasted results, operations management comes up with a strategy and proper plans. The main advantage of forecasting is to avail the firm with incredible information that can be used to make precise decisions about the future of the firm (Mullins 2007). PERFORMANCE OBJECTIVES To increase and maintain profitability and competitiveness, Virgin Airlines pay keen attention to performance objectives. QUALITY The quality of a product is remembered long after its price is forgotten. With this in minds of the virgin Airline staffs, they strife to offers top quality services ensuring what they offer meets the set standards. This includes efficient bookings, punctuality, proper luggage handling and interaction with the airline staff (Voss, Tsikriktsis & Frohlich 2002). SPEED In virgin airlines, there are sectors in which speed is imperative in the operations of the organization. Some of these sectors include reservation, turnaround time for airplanes, aircraft maintenance and luggage handling (Liou, Yen &Tzeng 2008). All of these operations have a direct effect in terms of cost to the virgin airlines. Even though the airlines has taken the appropriate steps to increase speed, there are also some services which are provided for by service providers who do not report directly to virgin airlines hence they do not control these services (Stevenson & Hojati 2007). DEPENDABILITY This relates for the most part to air travels being on calendar and dependability of baggage administration. The data for the second from last quarter of 2009 demonstrate 89% on-time air travels and 0.3 missed luggage for every 1,000 travelers (Johnston & Clark 2005). This contrasts positively and contenders, where promptness is comparable, yet the missed pack/traveler degree are requests of size higher. This amazing record needs to do with the way that virgin airlines offer just point-to-point flights, consequently disposing of the danger of gear bungle amid interfacing flights (Stevenson & Hojati 2007: Dess &Lumpkin 2005). FLEXIBILITY Clients have a high level of adaptability in picking the level of administration, since just the essential airfare is charged and any extra administrations must be paid for. Expanding adaptability for the client would mean offering extra choices (Johnston & Clark 2005). From Virgin's point of view, adaptability accompanies broadening of supplementary administrations from one perspective, and, with expanding business sector quality, the capacity to arrange choices for different administration parts, for example, support understandings, outsourced capacities, and so on (Stevenson & Hojati 2007). COST The most discriminating expense element for any carrier operations is fuel costs. There are colossal changes, and, not at all like its rivals, virgin airlines has focused on an arrangement of not forcing fuel extra charges. Hence any variances must be ingested by virgin airlines. Accordingly, virgin carriers reported its first yearly misfortune in 2009 when oil costs were at a record high (Stevenson & Hojati 2007). CAPACITY MANAGEMENT The approach of offering amazingly low airfares while staying beneficial can just work with exceptionally cautious limit administration so that all assets are ideally utilized and all requests are met. Regarding medium- and long haul limit arranging, virgin has made various strides that have turned out to be extremely effective. It is always including new center points as a premise for operations in a specific region (Krajewski & Ritzman 1999: Liou, Yen &Tzeng 2008). It ceaselessly stretches its armada to offer new ends of the line and more successive administration. Through the securing of the misfortune making Tiger Airways, virgin assumed control courses to which it beforehand did not have entry and could in this manner build its piece of the pie (Chase & Zhang 1998). An exertion to assume control British Midland Airways, notwithstanding, fizzled, because of a decision by the European Commission, which contended that this would prompt a restraining infrastructure that may be disadvantageous for the clients (Voss, Tsikriktsis & Frohlich 2002). Transient limit administration can be controlled by outer variables that are outside the ability to control of the administration. Cases are the Gulf War in 1991 or the terrorist assaults in 2001 which prompted an extreme downturn of travelers (Chase & Zhang 1998). While such occasions have sensational negative effects, experience has demonstrated that these are moderately fleeting and in this manner have just constrained reflection on capacity administration (Mullins 2007). Total Quality Management Client fulfillment: Customers, inward or outside, are fulfilled when their desires in regards to an item or administration is met or surpassed. Frequently, clients utilize the term quality to depict their level of fulfillment. Client fulfillment incorporates conformance to determinations, values, wellness for utilization and backing (Meredith 1998: Liou, Yen &Tzeng 2008). The statement of purpose of Virgin Atlantic is wellbeing, security and reliable conveyance in all that we do (Chase & Zhang 1998). Virgin Atlantic's economy administration is fragmented into Premium Economy and Economy. Virgin Atlantic's Economy class means to give most extreme quality for cash. It offers shaped, space-sparing seats with a normal seat pitch of 31", condition of the craftsmanship in-flight excitement framework including feature on interest, a decision of three dishes and free beverages and a pleasantry pack. Travelers have an opportunity to check online for all flights aside from the Caribbean (Chase & Zhang 1998). Virgin Atlantic's premium class peculiarities improved ergonomics for expanded solace and is the greatest seat in its class. It has cowhide seat covers and expanded seat width of 21. The seats have portable computer control in all seats on LHR flying machine; travelers can revel in need preparing to leave, a different lodge, predeparture beverage, condition of-the-workmanship in-flight stimulation framework and significantly more (Johnston & Clark 2005). Virgin Atlantic's privileged suite is unique in relation to else other possibilities flying. The privileged travelers get the most agreeable informal lodging buzzing around (Liou, Yen &Tzeng 2008). They are likewise given an extravagance calfskin easy chair to unwind. It is a top notch item for a business class admission. These travelers even get limousine exchanges and drive thru weigh in and numerous different profits (Meredith 1998: Scheraga 2004). Employee Involvement: According to Dess &Lumpkin (2005), a project is worker contribution incorporates changing hierarchical society and empowering collaboration. When an individual thinks Virgin Atlantic, the one idea that goes to the person’s psyches in Innovation (Meredith 1998). Who brings this development? It's the workers. An association or an organization is simply a statement, what makes it alive are the individuals (Scheraga 2004). Workers are the substance of the association and they are the person who manages the clients or travelers consistently (Chase & Zhang 1998). Who can comprehend the clients better than them? Virgin Atlantic includes its representatives in every choice or each transform they make. They get important input from them which provide for them an extent of change. Virgin Atlantic uses the methodology of collaboration where they make groups of people and designate assignment to them (Voss, Tsikriktsis & Frohlich 2002). Consistent change: Continuous change is focused around a Japanese idea called Kaizen which ponders constantly looking for approaches to enhance forms. Ceaseless change includes distinguishing benchmarks of fabulous practice (Meredith 1998). The center is to lessen wastage, for example, lessening the period of time needed for any procedure to finish. Virgin Atlantic as an association proceeds with achieves changes in their methodologies and their operations to expand client fulfillment. Case in point, they give more things remittance to understudies contrasted with Ryan Air (Krajewski & Ritzman 1999). Conclusion In the wake of dissecting the above operations strategies for Virgin Airways, it can be seen that VA assume a paramount part in the travel and tourism industry. Which unite an enormous work drive regarding administrations, item and brand picture (Chase & Zhang 1998). VA accomplishment has been carried out through its correspondence channels which organize easily through all the diverse level of the organization. Thus, Building collaboration and worker trust. As is commonly said "A chain is as solid as its weakest connection". Cooperating towards a typical objective helps towards VA's system, mission, notoriety and development. References Chase, R. B., & Zhang, A. 1998. Operations management: internationalization and interdisciplinary integration. International Journal of Operations & Production Management, Vol. 18, No.7, pp 663-667. Dess, G. G., & Lumpkin, G. T. 2005. The role of entrepreneurial orientation in stimulating effective corporate entrepreneurship. The Academy of Management Executive, Vol. 19, No.1, pp 147-156. Johnston, R., & Clark, G. 2005. Service operations management: improving service delivery. Pearson Education. Krajewski, L. J., & Ritzman, L. P. 1999. Operations management. Reading, MA ua: Addison Wesley. Liou, J. J., Yen, L., & Tzeng, G. H. 2008. Building an effective safety management system for airlines. Journal of Air Transport Management, Vol. 14, No.1, pp 20-26. Meredith, J. 1998. Building operations management theory through case and field research. Journal of operations management, Vol. 16, No.4, pp 441-454 Mullins L.J. 2007 Management and Organisational Behaviour. 8th ed. Harlow, FT Prentice Hall Scheraga, C. A. 2004. Operational efficiency versus financial mobility in the global airline industry: a data envelopment and Tobit analysis. Transportation Research Part A: Policy and Practice, Vol. 38, No.5, pp 383-404. Stevenson, W. J., & Hojati, M. 2007. Operations management (Vol. 8). Boston: McGraw-Hill/Irwin. Voss, C., Tsikriktsis, N., & Frohlich, M. 2002. Case research in operations management. International journal of operations & production management, Vol.22, No.2, pp 195-219. 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