Understanding Operations And Process Management In Qantas Airways Essay.

Demonstrate understanding of operations and process management concepts and frameworks.

Discuss the complexities of and relationships between supply network design, capacity planning, process design, inventory management, resource management for the supply network.

Critically discuss the role of operations and process management in developing efficient and effective organisations.

Analyse the effectiveness of operations and processes within as well as between organisations and identify improvements.

Apply knowledge about operations and process management concepts and recommend cost-effective improvements in a workplace setting.

Introduction to operations and process management

• What is operations and process management?
• What is a process perspective?
• Should all processes be managed in the same way?
• Operations strategy and performance objectives
• Operations strategy from the top and bottom of the business including operations resources alignment
• Operations strategy and operations improvement

Supply network design and capacity planning

• Supply network design
• Supply network configuration
• Operations location decisions
• Fundamental issues in capacity planning for the supply network

Every organisation has a number of internal and external operations that it must carry out todeliver its product. These operations may be between different parts of the organisation or with external parties, including suppliers and customers.

Take any operation in your organisation, or one with which you are familiar, and discuss the processes and their effective control that make this operation a success.

In your discussion, provide recommendations to improve the operation.

In the report, you are required to:

• Describe the organisation and the operation you have selected. Keep your descriptions brief but clear.
• Evaluate the current performance of the operation in the terms of its objectives.
• If your recommendations include a change of the process or control of the operation, include a process-flow map of that operation.

It is important to adhere to high standards of academic integrity. Academic integrity refers  to ethical, honest and responsible conduct in writing and reporting. Breaches of academic integrity include:

• Plagiarism – submitting another person’s words or ideas as your own without appropriate acknowledgement and referencing.
• Collusion – submitting work as if it is one’s own when in reality it has been completed with others, including assisting or being assisted by another; receiving or giving assignment details to another; or publishing one’s work or related AIB materials online.
• Contract writing (ghost writing) – submitting work that has been contracted out toothers to complete on one’s behalf. This is a form of collusion.
• Fabrication – submitting work with results or data that do not exist and that have been made up.
• Double submission – submitting substantially the same piece of work for more than one subject unless agreed upon with the facilitators of the different subjects.

Qantas Airways is considered for its pioneering services in Australia. It is considered as one of the largest for international destinations based on size of the fleet and flight destination. Some of the most noted features of the airline company have been recognised with Qantas being the third oldest airline carrier preceding Avianca and KLM. The airline company’s operations started from 1920 and first passenger flight was seen to take place in 1935. The main operational hub of the company situated in Sydney Airport. Based on the report published in 2014, the airline carrier is seen to have 65% of the total share based in local market of Australia and responsible for carrying 14.9% passengers solely in Australia. The subsidiaries of Qantas Airways have been recognised with regional centre operation of Australia under Qantas Link. Jetconnect and Jetstar are identified as the main subsidiaries of the company and they have been seen to be facilitating in Australia and New Zealand. Jetstar is regarded as the economy airline which is holding various sun brands and mainly operating in Australia and New Zealand. The company has been further seen to be placed in various other geographical locations for business, projects and assets (Qantas.com. 2017).

The main purpose of the report is to evaluate the current performance of Qantas Airways in terms of its objectives with regards to concepts of operations management such as services and the nature of the customer benefit package along with value chain analysis. The study has further recommended on the strategic vision and operations strategy for the organisation. Some of the main recommendations of the study have further included the process and control of operations thereby suggesting a change in the services through process flow map.

The complete analysis of the company has been conducive in understanding the various types of customer benefits package delivered by Qantas along with suggesting the design of Value chain with several advantages and disadvantages.

Customer Benefits Package (CBP):

CBP is identified as an important part of operations management which clearly defines the various set of tangible and intangible services provided to the customer’s before or after purchase of the same. Based on the concept of CBP, the value provided to the customers can be real or perceived through various dealings of the company. Qantas Airways is recognised to make a significant contribution to the economy of Australia. The airline carrier has been not only able to provide economy flights but also make provisions for several special facilities provided to its customers. The company has been further considered with an improving network of operations in terms of connectivity, improved safety and overall standardised improvement. Due to the several types of improvements in the customer benefits package the overall customer loyalty has shown an increasing trend. Some of the main forms of services under the customer benefits package include:

• 24x7 hotline for flight assistance and other Qantas services
• Hotel booking before and after reaching the destination
• Chauffeur services provided by various partners of the airline company
• Serving customers with specific needs such as child seats or other accessibility options earlier than 48 hours prior to the departure
• Connecting of domestic and trans-Tasman flights
• Travel insurance services(Qantas.com. 2017)

Value Chain Design:

CBP alone is not enough to act as a specific system or tool for operations management, hence it is important to integrate this concept with value chain analysis. The process of Value chain starts with identification of the various demands or expectations of the customers. The development of the value chain is essential for adding process to the individual peripherals of the services and the world development of final product is delivered to the customer.

Customer Benefits Package (CBP)

Similar to other airlines operating in Australia, Qantas has a supply chain which is highly dependent with the economic drivers like domestic tourist visitors, real household discretionary income, total flying distance in kilometres, international travel package to Australia and global price of crude oil. The airline carrier has further given an augmented focus on consumer sentiment index. The various types of supply industries associated to Qantas has been recognised in terms of aircraft manufacturing, repair services, airport operations, catering services, non-scheduled air transport and wholesaling of petroleum products. Some of the main types of demand industries of the airline carrier have been identified in terms of mining, air, railways, finance, tourism, courier services and postage services. The various types of individual activities under the supply chain have shown which services should be integrated to create satisfied customers.

Qantas has been identified to take several initiatives to upgrade value for its existing services. The value chain process of the airline companies simple and consists of the following components:

• Frequent flyer program
• Qantas Holidays and Viva! Holidays
• Check-in
• Baggage handling
• Qantas flight catering
• Jetset Travel World
• Jetset (budget)
• Qantas engineering
• Qantas airlines

The aforementioned components of the value chain have been seen to be owned by Qantas Airlines and it doesn’t need to outsource these services. Some of the most noted service brand for leading manufacturer of meals and main components have been identified with Q catering and Snap Fresh. The catering group of the company has employed more than 3500 employees in 8 centres and these are ISO 22000 certified for food safety management system. The Qantas frequent flyer program has added value to the regular customers by offering loyalty points with each flights and these are summed up later so that they can avail the free flight. Based on the fact files of the airline carrier it has more than 7.2 million members as frequent flyer thereby making it the most popular loyalty program in the southern atmosphere of Australia. In a similar way, more than 3.3 million award seats have been redeemed across international and domestic destinations in 2013 (Qantas.com 2017).

Qantas engineering is identified as a vital section of operations group for the airline company. This is known as one of the largest aircraft engineering and maintenance services in the entire Asia-Pacific region. The services have been accredited with international recognition for operational experience thereby implying more than 6000 staffs across Australia and globally. Qantas ensures recruitment of quality engineering, supply chain, training, support and maintenance crews for its aircraft and engine. The main facilities of Qantas engineering as in seem to be located in areas such as Sydney, Brisbane, Avalon, Melbourne and Adelaide, Perth. The various types of facilities of the airline carrier have been further seen to be approved by Australian civilian aviation safety authority. The facilities are seen to be operational for 24/7 including an audit which is done regularly to the deemed compliance with Australian regulations. As the airline company holds international flights and engineering facilities, the international approvals are done by United States Federal aviation Administration (FAA) and Australian Department of defence. Qantas has achieved its quality assurance certificate from ISO 9001:2000.

Value Chain Design

The outbound and inbound supply chains have been considered as the products honouring the airlines from suppliers to the products which are moving out of the company. These procedures are carried out before passengers move to the middle operations phase. The main components of the inbound Logistics comprise of the passenger service system, flight scheduling system, crew scheduling, route selection, fuel and aircraft acquisition where outbound logistics are present such as baggage system, flight connections and hotel reservation system. Qantas has been efficient in addressing various activities of inbound Logistics in the following ways:

• The website of the company provides the customer to avail all the facilities apart from booking of their flights
• Varied range of selection of meals
• Selection of the preferred route
• Booking of the car and destination city
• Conserving the environment by playing its part in reducing carbon footprints which their aircraft does during flight
• Effective it support and passenger service system through Amadeus
• Effective yield management system
• Key economic driver in reducing full usage
• Facilities planning
• Crew and flight scheduling
• Varied range of options to paysuch as debit cards, credit cards, poli payment and BPAY
• Fully owned aircraft is unlike other low-cost airline which uses in order to spend less on initial costs associated to start up costs(Qantas.com 2017). 

The Amadeus services provided by the passenger service system is based on indigenous development of Qantas Universal Business Environment. In the late 2000, the company has been seen to outsource its passenger service system through Amadeus. This has been identified as the main IT Company which provides the PSS support various types of other airlines operators such as Virgin Australia. In the recent times the airline company signed to travel intelligence solution known by Amadeus Schedule Recovery which is helped to reduce the disruptions in operations caused due to several types of external events like traffic control condition and poor weather. The use of such IT tool ensures that such disruptions in the operations are avoided by using data analytics to make quick choices in cancelling or delaying flights are reassigning landing slots (Bazargan 2016).

The Yield management system is based on the fact files published by the company in 2010. The importance of this has been mentioned by how Qantas handles this area is glorified. The rational for fewer vacant seats in the last minute is seen to be based on the effective yield management program followed by the company. The IT team in the company has been further able to acquire the seat pricing from specialist suppliers known as PROS widen the various range of prices paid by the customer in order to maximise revenues. The demand has been put this into the fluctuating and this is the main reason for trade-off for that yield manager by accepting all the reservations or to wait for the high paying customers. Some of the main considerations for the yield management system include price initiatives, discount allocation, traffic management and overbooking (David Mc 2013).

Evaluation of the current performance of the operation in the terms of its objectives

Some the main corporate achievements and objectives based on the recent our reports are listed below as follows:

Profitable growth: based on the reports published in 2014 $ 2 billion program has been used by Qantas for transformation of program related to permanently reducing the costs which are required for profitable sustainable growth. The aforementioned transformation has a bill to save $440 million in 2013/14. This has been further able to minimise the debt and maximise cash flow. The transformation program has been further able to cut down the unit costs by 3% in 2014.

Enhancing the cost reduction program- the majority of the fleets operated by the airline provides a better fluid efficiency and significantly reduce the maintenance costs. In order to ensure this Qantas has stopped operations of flights such as Boeing 737-400 and B767s and most B747s by early 2016.

Qantas Engineering

Selection of right size for network and fleet- The airline carrier has taken several initiatives to reduce the variety in the aircrafts with most advanced and basic ones for maintaining the services.

Deferring of growth- in order to improve the cash flow generation to pay off the debts the company has further delayed few projects on deliberate basis.

Alignment of capital expenditure to financial performance- The Company uses the capital to pay for the operations to improve its performance and get maximum quality with the invested capital.

Working hard on the existing assets- This Has Been noted with an Increased Fleet Usage and allocation of the appropriate aircraft on correct route in the international destination. This is the nurtured as a $100 million benefit for the company in the first year itself.

Accelerating simplification- The company has ensured this by restructuring of head office to remove the various types of management layers and improve performance through simplified organisation structures and strict control on recruitment including contractors and consultants.

Punctuality- Since 2013, the airline carrier has been recognised to be the most punctual domestic airline operating in Australia.

Market share- Jetstar and Qantas, together has been seen to control more than 60% of the domestic airline market in Australia.

Possessing of high yield customers- The Company has been able to ensure this aspect by upgrading the yield information management system and passenger service system.

Sustainable development- the sustainable development aspect at Qantas has been considered with an augmented focus towards environment and safety.

Strengthening of corporate social responsibilities/communities – Qantas foundation has been transforming lives of many Australians with direct empowerment or through empowering change. A handful of the programs include “make a wish”, “Spirit of the Arts”, “Qantas Spirit of Youth Awards 365”, “Spirit of Sports”, “Spirit of Reconciliation”, “Spirit of our People” and “UNICEF Change for Good” (Qantas.com.au. 2017).

The following recommendations are suggested to Qantas Airways for improving on the current process of operation:

• Improving the network - the company needs to put an augmented focus on improving the network by following a separate booking process for domestic and international flights. It needs to further implement technologies such as e-secure flight system. The introduction of such technology will be able to ensure prevention of issues related to hijacking and terrorism in the aircraft carrier. This allows sending of instant notification to the designated law enforcement, airlines and partners on report of any such incidence.
• Stop outsourcing of maintenance services - The airline carrier should give an augmented focus on increasing holding capacity at Australian maintenance centres and include more staffs. In order to ameliorate the value chain, the airline carrier needs to stop outsourcing their job and terminating their Avalon Maintenance centre to reduce the excess costs (Belobaba, Odoni and Barnhart 2015).
• Stop downsizing of staff- In the process of reducing the costs, the airline operator reduced the total number of working staff in 2013. They were also seen to strictly control the recruitment will allow various types of process in accordance to simplify the fleet. Downsizing of the staff has a very negative effect on the morale and sometimes may not be of any benefit. This may also reduce the quality and value of the service delivered (Eaton 2017).
• Stop wage freezing - Although the staffs at Qantas are paid with one off bonus, it is not supplemented by any fee hike. He says the detrimental effect on the staff as it keeps them worrying(Heizer 2016).

Conclusion

The various discussions of the study have been able to state on the existing customer benefits package offered by Qantas Airlines. This has been identified in terms of 24x7 hotline for flight assistance and other Qantas services, connecting of domestic and trans-Tasman flights, Chauffeur services provided by various partners of the airline company etc. This has been further related with the value chain in terms of services such as frequent flyer program, Qantas Holidays and Viva! Holidays, Check-in, Baggage handling, Qantas flight catering, Jetset Travel World and Jetset (budget). The various types are suggested strategies is on the current performance has been seen with improving the overall network with technologies such as e-secure, putting a hold on downsizing of staff and stopping of wage freezing.

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