Management Business Operation - Airline Industry - Essay Example

SUPPLY CHAIN MANAGEMENT AND QUALITY MANAGEMENT Report explaining how theoretical model and principles of supply chain management and quality management can be applied with Airline Industry Name: …………………………………….. Course ……………………………………… Date of submission…………………………………… Introduction Supply chain and quality management have recently gained growing attention because of their importance in the modern business world. The demand driven economy has challenged many companies to provide goods and services with adequate mix of responsiveness and efficiencies (Slack et al, 2007). This process of delivering system is operating in the principles of supply chain management. Customers are the boss in the market and satisfying their needs are to be targeted, and meeting their requirements by providing excellent goods and services with dependability, reliability and durability is the way to achieve ‘quality’ in the business (Slack et al, 2007 . Quality management aims at planning, controlling, assuring and improving the quality of products and services offered to the customers (Rose, 2005, p. 41). This paper presents an in-depth description of basic principles of supply chain management and quality management and it attempts to apply those principles with the Airline industry. The basic processes included in both supply chain management and quality management are detailed in this work. The Supply Chain management Why Supply Chain Management Most industries have recently been forced to invest in and to concentrate their efforts on supply chain due to severe competition, introduction of certain products with shorter life cycles and high customer expectations. Ongoing advances in both transportation and communication technologies have paved the way to evolve much evolution in supply chain management (Wisner and Leong, 2005). The Airline Industry has greater opportunities to invest and to make use of potential transportation facilities to enhance the effectiveness of supply chain management. Qatar Airways has recently launched Qatar Airways Cargo in order to address the supply chain needs of its customers. The new step forward by Qatar Airways Cargo services as part of its supply chain shows that old business rules and processes are being replaced with new ways of business strategies of supply chain management (Qatarairways, 2010). When global market competition increases, business have to pay greater attention to where the raw materials are extracted from, how the products and services of their suppliers are developed and designed and how the end products are being transported (Hugos, 2006, p. 3). Basics of Supply Chain Management Simchi-Levi and Kaminsky (2004) emphasized that supply chain management always gives much attention to the facilities that have an impact on cost and it plays key roles in making the product ultimately conforming to customer requirements, from supplier and manufacturing facilities through warehouses and distribution centers to retailers or stores. There can be three or more customers in the chain and their specific requirements are carefully met by their concerned supplier by giving greater emphasis on cost reduction and other various factors (Slack et al., 2007). Between these customers, transportation plays pivotal role by distributing raw materials and goods from one supplier to his customer (Hugos, 2006, p. 5). Airline industry can effectively work as a middleman between suppliers and customers by providing its transportation services. About half of the goods transported by air are carried by freight only airlines. It shows that there is a significant change since 1960s. These freight only airlines have added motor carrier facilities offering point to point services. These advances in modern air transporting facilities have made it possible that air transport can fulfill the growing need of supply chain by providing the fastest mode of transport (Wisner and Leong, 2005, p. 279) Wisner and Leong (2005) describe the process of supply chain management as follows. The process of supply chain starts from collecting raw materials and then selling them to raw material manufactures. These manufactures turn the raw materials in to those materials that are usable by their customers for specific needs. The component manufactures are involved by receiving orders and specifications from their customers and they accordingly sell intermediate components. Basic characteristics of Supply Chain Management Supply chain management is a global optimization process because it may be dispersed over a large geographical area and it consists of complex network of facilitating transportation, distribution and inventory control (Simchi-Levi and Kaminsky, 2004). In this global optimization process, Airline industry’s role is significant that it can facilitate transporting raw materials or intermediate or final goods to the customers. The raw materials extraction can be held in one country while the intermediary products development, inventory control and final product development can be done through various companies in different countries. Airline companies, in operation as part of supply chain, have to bear greater risks and deal with uncertainties that arise due to matchlessness of demand and supply or other factors. Managing uncertainty has become a very natural and basic part of the supply chain management. As in the case of market elements, demand and supply factors cause challenge and bring uncertainty in the supply chain management process. The overall supply process becomes complex and difficult may be because of raw material shortage or sales decline (Simchi-Levi and Kaminsky, 2004, p. 2- 4). Bozarth (2005) emphasized that organizations are highly vulnerable to face uncertainty while managing inventory throughout the supply chain process. On the other end, they may face supply uncertainty, or the risk of interruptions in the availability of those components that are required for internal operation. Basic Elements of Supply Chain Management Ross (2004) argued that the proper planning and control of inventories form to be the very core of supply chain management. The basic purpose of inventory control and management in supply chain management is to provide the trading partners with facilities to satisfy customers with the desired product, at right time and in right quantities. Inventory control plays vital role in managing the supply chain efficiently and effectively because a small change in consumer demand or meager fluctuations in market or economic factors can cause greater impacts on the overall performance of the businesses involved in the supply chain (Slack et al., 2007). Wisner and Leong (2005) identified the basic four elements of Supply Chain management as Purchasing, Operations, Distribution and Integration. As far as Purchase element is concerned, it is highly critical and significant element in the supply chain management because the quality of materials to be bought and maintaining long term relation with suppliers can cause long term effectiveness in the business. Focusing on the quality of raw materials to be collected or goods to be bought from suppliers will be a challenging task for Airlines while participating as transporter in a supply chain management system. As far as operation element is concerned, Emirates Airlines is not directly involved in the operations of supply chain management system. After materials or goods are purchased from a supplier firm, the customer organization has a number of internal operations like assembling, manufacturing, fitting, fixing and converting them in to final products (Wisner and Leong, 2005). Once production process completed, the products are to be delivered to the customers through various methods of transportation and this is the fundamental task of Airlines. Delivering products to the customers at right time, right quality and quantity can be achieved only with high level of planning and cooperation between partner firms (Wisner and Tan, 2008, p. 19). Supply chain management comprises of various relations and dealing with various goods and services (Monczka and Handfield, 2008). Airlines is a service provided within the supply chain and it may have to cooperate and collaborate with various firms involved in supply chain. Integration element represents the broadest process in the supply chain by which the different practices of purchase, distribution and operation are to be coordinated and managed among the supply chain’s participants (Wisner and Leong, 2005). Members of the supply chain work together to facilitate extraction of raw materials, purchase of materials or goods, operation and distribution of goods or materials and other various services ((Wisner and Tan, 2008, p. 6).. As a participant in the supply chain, Airlines is basically involved in the logistic function and moreover it has to integrate various elements and functions carried out within the supply chain and by various firms participated in the supply chain (Simchi-Levi and Kaminsky, 2004, p. 3). Quality Management The concept of quality management and its importance in the business have noticeably increased in recent years (Slack et al., 2007). Quality management has been considered to be a management strategy that helps managers to adapt to the changes in both technology and consumer demands. When there is a change in the business environment, the business must be able to adjust with it and to provide goods and services according to the changing environment (Hoyle, 2007, p. 1- 2). One of the basic tasks of managers is to achieve quality in the business. Peter F Drucker is of the opinion that a business must be able to create a customer- that is to satisfy him by providing some products or services that he wants (Burril and Ledolter, 1999). ‘Quality’ Quality refers to providing excellent product including its attractiveness, lack of defects, reliability and long term dependability (Slack et al., 2007). Customers demand high value and high quality in the goods and services and they will not accept those goods or services that are failing to offer a reasonable quality (Bateman and Snell, 2003). Airlines have more to do with increasing the ‘quality’ of transportation services especially in the competitive service market. Airline industry is highly competitive and it will be a challenge on Airlines to improve the service quality in order to increase customer satisfaction, to build brand loyalty among customers and to remain as the leader in the industry. According to Burril and Ledolter (1999), the basic aim of an organization must be to provide the right service, at the right time, at the lowest possible cost. As far as an airline is concerned, to provide the services at right time, to right customers and at lowest possible costs must be the organizational aim and managerial goal of attaining the ‘quality’ in the business and to gain competitive advantages. Foundations of Quality Management The father of quality management W.Edward Deming has developed a quality management system by emphasizing ‘joy at work’. According to him, quality must be focused and it must be stressed at each and every step of the managerial processes and not just by inspecting the product or service when its production is completed. He argued that most of the problems in products and services are caused by faults in management (Gitlow, 2001). Attaining quality has become more important in the changing business contexts because customers prefer those companies and organizations that are ‘quality certified’ and therefore managers are tremendously serious about achieving ‘quality’ in the business (Hoyle, 2007, p. 10- 11). Quality management includes all those activities that are essential for planning for the quality achievement in the organization and all those activities that are required to satisfy quality objectives (Nanda, 2005). Achieving quality is not simple since there are different factors related with products or services and all those factors must have its required quality. More specifically, quality relates to physical appearance, reliability and durability, specific features, suitability for the need and parts of the product or service and after sales services. So, quality management refers to any activity that leads to achieve quality for these factors related to the product and services. Components of Quality Management The system of quality management comprises of four basic elements that are quality planning, quality control, quality assurance and quality improvement. Quality planning Schwalbe (2009) stated that quality planning is the ability to anticipate situations and prepare actions that bring about the desired outcome. Quality planning process looks at reducing and avoiding any product or service defect that can possibly arise and to implement strategies that can achieve and improve the quality of goods or services. According to Schwalbe (2009), quality planning involves communicating the correct actions for enhancing quality in understandable format. In quality planning, it is imperative that managers are to describe those factors that contribute to meet customers’ requirements. Quality planning is a forward looking process. Airlines have to foresee what kind of services and amenities are highly demanded by its customers and accordingly it has to plan to achieve the quality. Most valuable and attractive services at affordable prices would be a common requirement of customers who travel by air. Services in and out of the airport and flights have to be valuable, useful and to be offered according to the requirements of the customers Quality Control Quality control is the process of checking and inspecting goods or services and works done in the business. Work done by one individual or department is assessed and inspected by another individual or department (Hall and Jones, 2001, p. 673). After the completion of the production, the product is subjected to further scrutinizing and inspection by concerned authority in order to ensure that the product meets quality target set by the management (Burril and Ledolter, 1999, p. 18- 19), Schwalbe (2009) emphasized that quality control includes 1) acceptance decision, by which a product or service produced as part of a preplanned project is accepted or denied, 2) Rework, by which rejected items are brought into compliance with requirements or specifications and 3) process adjustments, by which corrective or preventive actions are taken based on quality control measurements. Today, this has been changed and businesses are not concerned about “has the job done properly”, but instead, product and service inspection is carried out during the production process itself. It thus helps to avoid any defects before it is being carried out and it helps reduce wastage (Hall and Jones, 2001). Authorizing a quality control and quality inspection department will be an easy step to find the defects and bring solution without wasting time and money (Burril and Ledolter, 1999, p. 18). The services offered in and out of the Emirates Flights are to be inspected and assessed regularly so that it can focus on improving the service quality on the basis of personal approach, tasteful atmosphere, information, care, safety and consideration etc (Lester, Enrick and Mottley, 1992, p. 462). Quality assurance Quality assurance is a method of ensuring quality by considering the views and requirements of customers. Customers may be met and consulted for sharing their views about the goods and services so that managers can identify the levels of customer satisfaction and the level of ‘quality’. It involves all those activities that can satisfy the relevant quality standards for the product and services (Schwalbe, 2009). Quality assurance attempts to ensure and guarantee that quality has been maintained at all stages of production process (Burril and Ledolter, 1999). Quality is targeted for customers and they are the ultimate agents who decide whether a service has quality or not. So, customers’ view is of greater importance and therefore Airlines should deal with customers to see the real views and satisfaction levels of customers (Burril and Ledolter, 1999). . Quality Improvement Once the quality is achieved, it is imperative that the quality must be maintained and improved. Conducting research and study on the quality provided and identifying customers’ changing behavior towards the quality can help improve the quality in the organization (Schwalbe, 2009). Once the quality is achieved, the airline industry should seek measures to maintain, enhance and to improve the quality being provided by the organization. Conclusion This research work finds out that supply chain management and quality management are the two highly important factors that modern management can consider in order to meet today’s business requirements. As global competition and business threats increase, management practices need to concentrate on developing products and services exactly according to customers’ growing and dynamic need and this can be achieved with the help of supply chain management. Competing successfully in the modern highly competitive business environment requires management to focus on various effective strategies like achieving and maintaining ‘quality’ in the business. this research work suggests that both supply chain management and quality management are effective tools as well as success pathways for the modern management. Bateman T.S and Snell S.A. 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