Operations Management Report writing help analysis overview Question??

You must do a professional business report on Southwest Airlines that also addresses the following questions:

1. To what do you attribute the success of Southwest Airlines?

2. How significant is the 10 to 15 minutes turnaround time of Southwest’s aircraft in terms of savings in investment and utilization of its aircraft compared to competitor’s?

3. What challenges is Southwest facing in the future and how should they meet those challenges?

4. What should their business and operations strategy be for the future?

5. Will Gary Kelly, the new CEO, be able to maintain the profitability of Southwest Airlines while insuring the continuation of their unique culture?

Answer the question frame is::

Executive summary

            The following report includes the description and analysis of the Southwest Airline. The report includes the factors that have attributed fro the success of the airline which mainly includes the scheduling of the services, the company strategies, use of the spider web system, the turn around time concept and so on. The report also includes the Significance of 10 to 15 minutes turnaround time of Southwest’s aircraft and the Challenges Southwest will be facing in the future and the factors that will be used for meeting those challenges like effective marketing and promotion strategies, use of outsourcing for maintaining the operations. The conclusion has also been presented in the report in order to bring out the major factors that has been considered in the report.

Introduction

            The southwest airline was started in the year 1918. Initially the service was just seen as a support or supplement to the railway transportation. Then with the changes in the trend several other airlines came into existence and opened the way towards the world transportation. After the completion of the World War II several governments came into forces for establishing the rules and regulations for the airline industry. This helps the industry and also opened several opportunities for the companies. With the increase in the competition price war between the organizations led started and affected the market profitability (Bunz and Maes 1998).

Factors attributed to the success of Southwest Airlines

            There are several factors that have attributes to the success of the southwest airlines this mainly include the following factors:

Scheduling of services:

The Company has the policy to limit the airplanes on ground for not more than 10 minutes; this is the key reason that the company has reduced its idle time and has decreased the cost and increased its revenue. The company has developed world class processes which mainly includes the services related to effective maintenance and also the effective baggage handling (Gittell 2005).

Services and Strategy:

The company adopted the strategy to select the secondary airports where the company airplanes finds less congestion and this has led the company to maintain its 10 minutes turnaround time.

Similar Boeing Airplanes:

The company adopted the strategy of buying the similar planes which led to easy maintenance and requirement of fewer members as maintenance staff. This helped the company in reducing the cost effectively (Renga and Mentges 2010).

Spider Web System:

The success of the company is also due to the adoption of the spider web system instead of the Hub and Spoke system, which helped the company with maximum flexibility with higher satisfaction and lower bottlenecks (Hill and Jones 2009).

Minimum operational cost:

            The company does not offer any meals, assignment of seats and also used the reusable boarding cards which aid the company in reducing its costs. The company also adopted the automated printed tickets instead of the hand written tickets. The company also contracted data processing, maintenance and legal services, which kept the company costs at lower level (Cohan 2003).

            The company was also highly careful in expansion of its operations in the new markets. The company has the strategy of selecting the markets which matches with its business plans and strategies which are highly underserved and less expensive. The company took time in analyzing the markets and researching about the potential of any market area. After proper evaluation the company initiated its operations in California in the year 1980 and also coast to coast services in the year 1990. The company services more than 65 million passengers in more than 30 states (Hill and Jones 2009).

Effective Marketing and Promotion:

            The company used several marketing and promotion strategies like the use of the brightly coloured airplanes which was also one of the factors for its success. The company also initiated the theme “LUV”, the in-flight services of serving drinks and peanuts were called as LUV positions and also LUB bites. The company always tried to project the liveliness of the operations in its services (Lauer 2010).

The company also operated several promotions schemes and activities during its entire life cycle. The promotions mainly include the free round trips for passengers who made a set of travel with the air lines, cheaper ticket prices etc. These promotional ideas were targeted to pull maximum number of customers who uses the other means of transportation. The company become successful in attracting the customers to a large extent as compared to its competitors (Krajewski  2012).

Significance of 10 to 15 minutes turnaround time of Southwest’s aircraft

            Southwest airline is an airline which works n the economic sector. The turnaround time is one of the best strategies the company has adopted in its working tenure. This was one of the major areas where the company has performed pretty well in order to maintain the cost of its operations at the lower end. The significance of the turn around time can be seen from the factors that the more the time is consumed by the airline on land the more the company looses its revenues and also increases its operational costs. The reduction in the turnaround time has led to the increase in the number of trips by the airplanes at different destinations.

            This turn around time has been achieved by the company by flying to secondary airports with less congestion. This is highly significant for the company in terms of the reduced costs and increased revenues which have been one of the major factor fro the company in its success. The uniformity with the fleet made the company staff to maintain the aircrafts and their repairs and also update the technical know how of the planes in the shorter time period. The company has also outsourcers its major maintenance to several contractors which has also led to the decrease in the turnaround time. Most of these activities were not adopted by the competitors of the company which has given an edge in its operations to the Southwest airlines (West  2005).

Challenges Southwest will be facing in the future

            The economy in the current period is going through turbulence. With the increasing fuel prices the operational costs of the airline companies are increasing and forcing several companies into bankruptcy. After the post 9/11 and also the SARS the future of the airline industry seems into trouble. All these factors are affecting the customer’s confidence in the airlines and affecting the travel of the people by the airlines. The increase in the security arrangements at the airports are affecting the operations of the companies and making the operations more and more complicated for which the company was mainly known for among its customers. The company needs to pursue aggressive marketing and promotion strategies in order to pull customers to travel from its airline in this difficult period (Cohan 2003).

            High competition is also one of the challenges which the company may face in the coming period. The new economy airlines which have entered the airline industry like the JetBlue with its cheap services and high comfort rooms with leather seats and direct TV at reasonable prices will affect the company operations. JetBlue has launched with high end technologies with online ticket bookings and check-ins and has made travel easier. The competitor has also adopted the southwest operational strategies with some differences.

            For facing these challenges the company has to adopt several options like providing several frills to the passengers without affecting the stream of its revenues. The company has also gone or has planted the leather seats in its airplanes. The company must also plan for newer plans with hi tech features like the back seat televisions. With the introduction of the newer fleet aircrafts the company can also reduce its maintenance expenses. This can also help the company to pacify the customers who has been affected in the recent blunder by the company in which the company has been fined by ATA for the lapses in the maintenance activities. The company in order to meet the challenges also needs to upgrade its information technology infrastructure and enable the online check in and managing the seating arrangements. These factors can bring the company operations into competitive mode (Krajewski  2012).

            The labour issues are also one of the factors which seem to be the major challenge for the company operations in the future. Though the company has always maintained harmonies relationship with the workers and employees and also the management of the organizations, some labour negotiations has put the company harmonious relationship into strain. This has also affected the operationally of the company and is one of the major challenge for the company in future period (Cohan 2003).

            Changes in the management are also one of the threats for the company is future period. Many changes in the management has been done during the period of the labour negotiations. This is definitely a major challenge for the company as the labour have trust on the old management and are also one of the major factor in the success of the company. These factors can be managed as the new heir Gary Kelly has come from the same cadre of the older management and might also pursue the similar policies which was adopted in the past (Heizer, Jay, Render, Barry and Rajashekhar  2009).

Business and operations strategy be for the future

            The company has the greatest advantage of lower fuel prices due to its effective fuel hedging. According to the reports the company has hedged 70 % of its fuel in the year 2009 at the rate of $66 per barrel. By the year 2012 the company is expected to decline its hedge to cover around 20 % of its fuel consumption. This provides the company some time to shift its strategy and focus in reducing cost (Krajewski  2012). Looking at other airlines they are already in rouble due to the rising fuel prices. The factors that the company need to focus on in order to improve its operationality mainly includes,

• Investment in new and efficient airplanes with high tech features,
• Closure of routes with less profitability and look for new profitable destinations
•  High promotion and advertising activities
• Outsourcing of maintenance and information technology operations
• New and advanced website with features of online check in and seat allotment
• Using the aircraft for cargo services generating high revenue for the company.

Maintaining the profitability of Southwest Airlines

            The unique culture of the company was one of the main assets of the company from long. The average salary provided to the employees of the company has always been lower than the industry averages even then the company employees have worked hardly and heartily whether it’s the flight attendants or the maintenance crew. All this is mainly due to the organization culture of the company that has managed to keep the employees happy and provide their dedication to the company. The more the happy the employees the more they keep the customers happy. By the encouragement of this organization culture and modifying the strategies of the organization in order to meet the changing needs of the company operations Gary Kelly can be able to effectively maintain the profitability of the company for long term.

Conclusion

            From the above analysis of the company and the case under consideration it can be concluded that the Southwest airlines has adopted several strategies which has led the company to succeed in long term. The strategies adopted by the company have also increased the output of the company and has also helped in reducing the cost of operations of the company which is one of the unique factor for its success. The company must also develop its operationality in the profitable sectors and also increase and develop its operations into highly advanced and technical areas in order to grow in future and face competition in long term.

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