The main aim of this assignment is to elaborate the importance of the operation management. In the current market climate and competition, there are various companies that face confronts on how to serve its customer with better quality products and services at the time of continuing to innovate. Competing on all dimensions concurrently will be hard and needs huge investment from the companies. Order winners and qualifiers are described under this assignment by taking consideration of South West Airlines.
Background of the company
South West Airlines was founded in 1967 and the company has developed its operation in an effective manner with around 59 airports with 381 planes (Southwest, 2018). The purpose of South West airline is to connect people with their vital aspects such as reliable, low-cost travel. The company is committed to give a stable work environment to company’s employee by providing them equal chance to grow significantly.
The company has faced various challenges while embracing change as there were no amendments in the context of grand designing, lack of planning to expand a business. There are major two goals of the company such as cutting costs and increasing number of passengers. For the purpose of overcoming such issues, the company has taken initiatives to dominate the market by applying strategies for affordable flights to a high range of people to pull passengers away from competitors.
Literature Review
According to Hill, (2009), it has been found that the “order winners “ and “order qualifiers” are considered as the process of analyzing the operational capabilities in order to attain the competitive advantages and market success. It has been advocated by Terry Hill in the context of the need for the marketing and operations to work together. The dimensions of order qualifier and order winner are given by the operation department through marketing which is considered as an integral component for the products to win orders at the market.
Kathuria, Porth, Kathuria and Kohli, (2010), analyzed that this process is started from the top of the structure with the corporate strategy and finishes at the bottom of the structure with taking consideration of operations dimensions that handles company operations through impacting the preference of the customers. On the other hand, order qualifier allows product to be potentially referred for buying products through customers. The role of order winner ins such scenario is to distinguish its products firm competitors in order to play a vital role in informing customer purchase decisions (Lee, Hu, Yen and Tsai, 2008).
Leuschner, Rogers and Charvet, (2013), found that the role of the order winner and order qualifier is integral for the organization for the purpose of developing and operation strategy. Moreover, to get a better understanding regarding of the market, it has been advised by Hills to separate this term from each other. The significance of both winners and qualifiers is huge in the operation management; hence order qualifying has to go before order winner to attain growth (Hu, Chiu, Cheng and Yen, 2011).
It has been analyzed that the general rules are minimal that is why it is vital to bear in mind that the criteria of order winners can be different from order qualifiers in specific market conditions. It has been found that order winners and order qualifier have different perception in performance and dynamic in nature. Quesada, Rachamadugu, Gonzalez and Luis Martinez, (2008), argued that amendments in the taste and demand of the customers can be liable for the amendments of order winners in to order qualifiers.
In the context of the South West Airlines, it has been found that the company has approached various strategies to attain the competitive advantages. There are a plenty of competitive dimensions on which the companies need to focus in order to get growth in the sustainable market. The competitive dimensions are cost, quality, delivery reliability, delivery speed, demand management, variety and innovation. The overall strategy of South West Airlines is to service price and convenience sensitive customers. It has been analyzed that the demands of the customer influence the determination of the quality.
Bazargan, (2016), analysed that cost is the major competitive priority for attaining the competitive advantages. It is vital for the operation managers should work determinedly with marketing for the purpose of understanding the competitive situation in the market of the company before they can decide which shows the important competitive priorities. Cost competitive priorities are based on the low price cost of the products in order to an influenced number of customers towards the services. it is necessary for the operations to develop the cost competitive priority to focus on cutting costs in the system effectively in order to reduce the waste.
The company can approach extra training to employees for the purpose of amplifying the productivity and reducing scrap. Along with that the company can invest in automation for the purpose of increasing productivity (Hallgren, Olhager and Schroeder, 2011). Commonly, there are so many companies that compete on the basis of cost that provide a slender rate of products and price characteristics. It has been analyzed that the companies that are based on cost provide a contracted range of products and features of product, permit for little customization, and have an operation process that is made to be as effective as possible.
Order winners: Cost
Cost is the factor that is considered under the term of order winner for South West Airlines. It has been found that the function of South West Airlines is designed in order to support this approach. the facilities of this company are streamlined as it has been analyzed that only one kind of aircraft is taken into consideration by the company and the routes of flights are generally short. This provides to reduce costs of forecasting maintenance, inventories of parts, crew amendments and various costs related to administration. Along with that South West Airlines (SWA) has focused on elimination of unrequited costs as there are no meals, no seat assignments, automated gate ticketing, and no premium classes of services and standardized feet of aircraft.
The company is more concerned towards a quality of the products for which the training program has been implemented to perform number of functions and consider team approach in order to amplify customer services. South West Airlines have become the model for number of airline industry die to adaption of this strategy in their system (Southwest, 2018). SWA did away with taking consideration of managing distribution and procurement, transferring the activities into regional level. The company is applied sensible expansion policy from which the company is able to attain national presence by flights to 59 airports and 58 cities. It is the company that introduced the airline industry the ten-minute turnaround which was being the cause of significantly amplified demand for short flight routes.
Order qualifiers- quality
Quality is another competitive priority that covers two dimensions such as higher performance design that refers the operation function should be framed to focus on factors of quality like close tolerances, excellent customer services, superior features and high durability. SWA treats its employees well by backing the decisions as it has been found that the organization is tied the upper level of a spot at 68%, which represents 8% above the rating of t he company all over airline industry (Pitfield, 2008).
The major focus of the company is on successful internal marketing in which the company treats with customer in an efficiency manner as internal customer. It has apparent that the quality is the order qualifier for the company by which the company can move ahead. Along with that the company can prefer another strategy to improve its quality in order to attain competitive advantages (Wang, Wallace, Shen and Choi, 2015).
The process of improving and deliver its order winners/qualifiers
The company develops various strategies in order to remain in the competitive advantages as this company has number of competitors that provide outstanding services to the customer in order to attain competitive advantages. Due to an order winner which is Cost, the company has great opportunity to expand its business significantly. The company can improve its image as develop to continue its low cost position strategy. it is required for the company to maintain low cost flying which would be helpful for the company to attract huge range of customers towards the services (Lee, Hu, Yen and Tsai, 2008).
Along with that it is necessary for the company to focus on continuing streamlining and automation which would be helpful for the company to cost-cutting and achieve competitive advantages on which the brand of the company is based. It has been found that the company has taken some initiates in order to reduce the challenges. Ticket counters and security streamlined have been enlarged by Southwest.
Along with that to deliver its order qualifiers, southwest has streamlined the boarding process by replacing the old plastic card system with an automated one (Wiley, 2018). The trust of the customers keep huge importance in the growth of the company and the trust of the customer can be maintained by the company to provide them right and good quality products. Customer retention strategy should be applied by the company in order to retain the company.
Potential implications of delivering an improved level of the order winners/qualifier
It has been evaluated that in the hard economic situation, the major point to be competitive and develop performance of the business is supply chain integration. This integration comprises number of aspects such as manufacturing, distribution and customer. It has been found that there are major two factors that can be attained by the company with the help of the supply chain integration company. Firstly, the integrated supply chain provides outcomes in more effective manner that facilitate to volatile demand pattern (Huo, 2012).
This developed ability to give a response in case of increasing visibility of knowledge and information. In order to improve the customer’s services, it is required by the management of southwest airlines is to focus on the “lean” and “agile” supply chains which have to be developed for the purpose of improving the market responsiveness. “Lean” refers improving a supply chain which reduces waste within the company and facilitates a level production. “Agile” focuses on flexibility in determining the market knowledge to develop opportunities in the volatile marketplace (Bozarth and Handfield, 2008).
The above image implies that in case lead time is the order winner, in such case the company should be on agility and in case of order winner is price, the company should focus on the lean supply chain. It is the challenge for Southwest to focus on both supply chain both lean and agile similarly well, developing lean methods for stable products and for slow movers as well as new products, the company should focus on the agile methods. According toSeuring and Müller, (2008), it is the sense that lean precede agile methods and in order to be agile, it is vital for the company to have an understanding of its ongoing processes.
It has been found that the “customer-centric” supply chain has a significant impact to SWA for the purpose of responding to various requirements of various customers in an appropriate manner. The potential to frame and handle various operational strategies will be a need for all kinds of airlines to beat competition. In such scenario, it is necessary for SWA to align itself with the upper level of suppliers, which can significant impact on lean as well as agile focus. It has been found that the integration with a supplier would be helpful for SWA to amplify benefits and eliminate quality issues. It has apparent that a Southwest airline succeeds in such concepts.
Conclusion
In the limelight of the above discussion, it can be concluded that the role of the operation management in southwest airlines is huge as it handles all activities of the company in order to attain competitive advantages. The discussion has been made on order winners and order qualifier in which it has been analyzed that cost is the order winner in the context of SWA. On the other hand, quality is the aspect which is order qualifier of SWA by which company can compete with number of competitors in order to remain in the competitive market. A literature review has been supported by various journal articles, books and online sources so that a better understanding could be made regarding the proposed topic.
References
Bazargan, M., 2016. Airline operations and scheduling. Routledge.
Bozarth, C. and Handfield, R., 2008. Operations and supply chain management. Strategies, 21, p.22.
Hallgren, M., Olhager, J. and Schroeder, R.G., 2011. A hybrid model of competitive capabilities. International Journal of Operations & Production Management, 31(5), pp.511-526.
Hu, H.Y., Chiu, S.I., Cheng, C.C. and Yen, T.M., 2011. Applying the IPA and DEMATEL models to improve the order-winner criteria: A case study of Taiwan’s network communication equipment manufacturing industry. Expert Systems with Applications, 38(8), pp.9674-9683.
Huo, B., 2012. The impact of supply chain integration on company performance: an organizational capability perspective. Supply Chain Management: An International Journal, 17(6), pp.596-610.
Kathuria, R., Porth, S.J., Kathuria, N.N. and Kohli, T.K., 2010. Competitive priorities and strategic consensus in emerging economies: evidence from India. International Journal of Operations & Production Management, 30(8), pp.879-896.
Lee, Y.C., Hu, H.Y., Yen, T.M. and Tsai, C.H., 2008. Kano’s model and decision making trial and evaluation laboratory applied to order-winners and qualifiers improvement: a study of computer industry. Information Technology Journal, 7(5), pp.702-714.
Leuschner, R., Rogers, D.S. and Charvet, F.F., 2013. A meta?analysis of supply chain integration and firm performance. Journal of Supply Chain Management, 49(2), pp.34-57.
Pitfield, D.E., 2008. The Southwest effect: A time-series analysis on passengers carried by selected routes and a market share comparison. Journal of Air Transport Management, 14(3), pp.113-122.
Quesada, G., Rachamadugu, R., Gonzalez, M. and Luis Martinez, J., 2008. Linking order winning and external supply chain integration strategies. Supply Chain Management: An International Journal, 13(4), pp.296-303.
Seuring, S. and Müller, M., 2008. From a literature review to a conceptual framework for sustainable supply chain management. Journal of cleaner production, 16(15), pp.1699-1710.
Southwest, 2018. About us. Available [online] https://www.southwest.com/html/about-southwest/index.html Accessed on: 19th December 2018.
Wang, Y., Wallace, S.W., Shen, B. and Choi, T.M., 2015. Service supply chain management: A review of operational models. European Journal of Operational Research, 247(3), pp.685-698.
Wiley, 2018. Operations Strategy and Competitiveness. Available [online] https://www.wiley.com/college/reid/0471320110/pdf/i_ch02.pdf Accessed on: 19th December 2018.
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