It will discuss the four stages In the Hayes and Wheelwright’s model of operations contribution. This will take Flatirons as an example. Ryan is one of Rupee’s largest low cost airlines, which operates more than 1, 400 flights per day from 44 bases across 27 countries with a fleet of 272 Boeing 737 aircrafts. They operate with a team of 8, 000 personnel and have carried around 73. 5 million passengers during 2011 with the average fare of 39 Euros. (Ryan official website).
In every organization, operation strategy provides a framework to determine how the organization should pretzel and utilize Its resources to achieve Its performance objectives and gain advantage to Its competitors In the pre-defined market place. In another word, once a company defines it’s role in business and identifies its performance objectives then it needs a set of framework and guiding principles for decision makers, to ensure that all the objectives are met. These frameworks and guidelines are the principles of what is known as operations strategy.
In today’s easiness world, operations managers are faced with various challenges regarding development of effective strategies in line with organization’s -mission and vision- and to properly implement those strategies.
Ryan Operations Strategy
As a low cost airline, Ryan overall framework is to provide air travelers the option of flying to vast number of destinations with the minimum fee possible. To attain that In the costly businessenvironmentLike the allure business, Ryan needs to carefully adopt operations strategy to malignant It’s basic services while lowering the costs as much as possible in different operation areas.
It is important to understand Market qualifiers, in order to survive in the market. The terms Order-winning and qualifying objectives will be discussed later. Hence in general the efficiency of the Ryan operations should support it’s market positioning, as a low-cost airline, and the following are some key elements on how RA manages the processes and implements the operational factors to deliver its results.
Keeping turnaround time at minimum
This has been achieved partly due to improved employee productivity, which could be the result of intense staff training and development, and partly because there are no meals and sees luggage to be loaded on to the plane. * Aircraft equipment cost. Using identical aircrafts (Boeing 737) in large quantities helps Ryan to reduce significant cost in repair, services and storage of aircraft parts. It also gives the company the advantage to negotiate the price of purchasing aircrafts and parts coming all from single supplier.
Apart from those, using identical aircrafts offer reduction in staff training cost as well as flexibility in the scheduling of crew and equipment.
Airport access cost
Airport landing and services fees are much lower in secondary airports and could save the airline a lot of none by diverting flights to these airports. Also diverting passenger traffic to these airports gives Ryan the advantage to negotiate costs with airports by providing high passenger flow.
Customer services costs
Ryan has developed its own Internet booking service facility, which sells tickets directly to the costumers, offering lower prices by cutting travel agency commissions. Using electronic services will give an advantage to management to access a range of data for future planning and service enhancement. Apart from that, Ryan has entered into agreements with third party contractors at certain airports for assenter and aircraft handling, ticketing and other services that can be provided in a more cost efficient way by third parties. Personnel productivity Ryan endeavors to control its labor costs by continually improving the productivity of its already highly productive work force. Compensation for employees emphasizes productivity-based pay incentives, including commissions for on-board sales of products for flight attendants and payments based on the number of hours flown by pilots and cabin crew personnel, within limits set by industry standards will stem to higher personnel engagement and productivity.
Apart from the mentioned bullet points Ryan air’s management, reviews the day-to-day experience of the company regularly to modify and refine their strategic decisions in order to abide to the company’s policy on customer services.
Ryan has been known as Rupee’s first low cost airline, which is the company’s strongest selling point. Adopting low cost strategy helped Ryan to rapidly increase of customers and expansion of their operations. Addressing to the marketing trends by adopting Internet services like booking and ticketing has changed the customer behavior and has provided wide range of clients for them.
Last but not least, rapid expansion of flight routes and aircrafts, has provided more frequent flights and destinations to air travelers.
Restricted customer service, deceivingadvertisementand low quality services are among those weaknesses, which has lead to bad publicity for the company.
Ryan, according to its strength, has opportunities to still dominate the European airline industry in term of providing more quality service standards and maintain its positioning as a low cost airline.
By determining the latest trends in airline industry and meeting the up to dated demands of customers they are capable of gaining more customers to be the number one airline company in the whole region.
Given the competitive nature of airline business, Ryan is faced with the inevitable threat of competition. To tackle that, Ryan needs to constantly provide highly effective and efficient new products with higher quality services comparing to competitors. St
‘Market Qualifiers’ And ‘Order Winners’
Qualifying and order-wining factors are ways to distinguish a company from its imitators within the market.
Order winning factors are mainly those aspects, which contribute to promote the service or product to the highest level of costumer satisfaction and help the business to stand ahead of other competitors in the market. On the other hand, qualifying factors are those aspects of the service provider, which should be met to attain the consideration from costumers for business. Costumers needs and wants along with competitors market standards define weather a factor is a qualifier or a winner.
Flatirons is an electronics manufacturing services provider, which specializes in supply chain services such as packaging and transportation, as well as design, engineering and after sales services within several markets including automotive, computing, consumer, industrial, infrastructure, medical and mobile.
Based in Singapore, Flatirons is behind well-known brands like -but not limited to- HP, RIM, Motorola, Microsoft, Dell, Cisco, Sony Ericson and IBM. (Flatirons official Website) Flatirons Operations Strategy As one of the global leaders in design, manufacturing and distribution and after sales market services, Flatirons operations strategy must be designed in a way to address the needs for low-costs, responsive and flexible product and services.
To achieve this Flatirons has adopted the following strategies:
- Extensive network of design, manufacturing and logistics facilities. These extensive networks are placed in the world’s major electronic markets helping Flatirons to address each customer’s that simplify global product development and supply processes. Through his, Flatirons is able to go through the life cycle of the products from its initial design to volume production, test cycles, distribution and post sales services in a more efficient manner.
- Integrated industrial parks. These industrial parks are positioned in low cost regions close to the Flatirons costumers and world markets, giving them the advantage of delivering the products and services in a very large scale and as cheap as possible. Also Flatirons encourage its own suppliers to position in these industrial parks for easier access. Through this strategy Flatirons reduce major cost of shipping, handling and storing products.
Hayes and Wheelwright’s Four Stage of Operation Contribution
Professor Hayes and Wheelwright developed a four-stage model to evaluate the role and contribution of operations function. These stages are as follow:
- Internal Neutrality: Lowest level of contribution by operations function. It does not react upon competitive success and the aim is to avoid mistakes.
- External Neutrality: At one level higher, in this stage the company begins to look outside and compare itself with its competition. The objective may not be to be the best but at least to implement the best practice with regards to other market players.
- Internally Supportive: Operations at this stage are among the bests in their market. Developing appropriate operations resources to support company’s strategicgoalsis at the most priority.
- Externally Supportive: At this stage the operations functions are designed to provide a foundation for competitive success. Adopting a long-term view, considering the future changes in the market and consumer behavior helps the company to be one step ahead of the market.
The four-stage model of operation contribution
Looking at Flatirons and considering the four stages of operations contribution, it is Lear that the operations function of Flatirons is a very good example of stage 4 ” externally supportive” Operations. As mentioned earlier, through an extensive network of design, manufacturing and after-sale services, Flatirons can deliver its services at the most appropriate locations, which shows in depth knowledge of costumer behavior understanding.