Understanding Order Qualifiers And Order Winners In Operations Management: A Case Study Of Southwest Airlines Essay.

To give an overview of the nature of Operations Management and Strategy including the strategic decision making process and an insight into how they deal with the challenges that they encounter.

To enable students to apply various theoretical approaches to practical examples and to critically discuss current issues within the subject.

Identify key candidate order winners and qualifiers for an organisation of your choice and examine how that organisation might deliver and improve on the order winners/qualifiers.  Discuss the potential implications of delivering improved level of the order winners/qualifiers (or lack of improvement) on the organisations’ supply chains.  Support your discussion with relevant literature.

Choose an organisation of your choice and describe the business activities, analyse the service delivery process or the manufacturing process, identify what should be done to improve the processes and discuss why the organisation is successful (or not successful).   Support your discussion with relevant literature .

Background of the Company

The quick technology advancement contributes to a volatile market, since technology impacts the demand the human capital in various business areas. Subsequently, new business areas are developing, which develops extent of human capital in one area of business and shortage in another. The main aim of this assignment is to focus on the “order qualifier” and “order winner” in order to highlight the advantages of them in the context of the companies. The literature review will elaborate on the importance of both concepts by taking consideration of Southwest Airlines.

Southwest Airline is a well known company in the aviation industry that was introduced in 1967. The company has expanded its business all over world and serves 59 airports with taking range of 381 planes in operation and the expansion of the company is still in progress (Southwest, 2018). The main aim of this company is to satisfy the customer and give chance to everyone to fly high. The company seems intentional to contemplate on markets that other airlines do not regard as vital. It has been found that in the starting of four years of its existence, the company was airline by name only as the competitors of Southwest wanted to kill it at birth. The company faced number of confronts to get developed within the industry. the company had adopted an effective strategy and took action after great discussion in which instead of fighting with wealthier and strong rivals, the company had decided to adopt the strategy of guerrilla war which refers be there where enemy is unable to approach (Airlines and Roadway, 2014).

According to Caniato, Caridi, Castelli and Golini, (2011), when a company determines whether to purchase a service from one company or another, the decision process can be distinguished into two parts. It is the process that initiates with an evaluation of the offers that are ready to qualify into the buying process, that refer as order qualifiers. Secondly, there are specific offers proceed to the final stage where the option of one order shows, the order winner. The main aim of both concepts is to understand and identify the needs and wants of the customer. According to Leuschner, Rogers and Charvet, (2013), at the time of developing the operation strategy, it is crucial for the company to pay attention towards on both concepts. Moreover, it is integral for the company to separate order qualifier from order winner for the aim of improving the knowledge and the understanding of the market. The role of qualifiers and winners have significant value in the company, if the company is unable to qualify, the company cannot win the order. Hence, it represents that existing criteria is vital when a company wants to attain a huge market share and develop. It has been found that order qualifiers and winners are dependent on the market. Thus, it is necessary to bear in mind that the company should not dependent on the general rules as the order winners and order qualifiers rely on the situational context. Moreover, the significance of criteria amendments over time as the sources of order qualifiers and order winners criteria should be recognized and it is integral to include the customer in the criteria of the process. Lee, Hu, Yen and Tsai, (2008), stated that the focus of the company on the order qualifier can turn into order winning process.

Literature Review

                                                                      Source: (Jaller and Ullstrom, 2008).

With respect to the definition of order qualifiers, Lyles, Flynn and Frohlich, (2008), stated that order qualifier comes under those criteria that the company should comply with to be measured as a potential supplier. The good performance over this criteria can lead the company into success zone, however, it is not easy to win the orders and increasing the entrance limit for such aspects affects nothing or very little in the final decision of the company. in the context of the definition of order winners, it has been found that the criteria of order winner are those that comprise the company differentiation in contrast to the competitions that permit suppliers to carry them to win the orders (Tierney and Kuby, 2008). The role of both concepts keeps huge importance in the development of the company. Hence, suppliers should guarantee to fulfill the range of the qualifying criteria for the purpose of staying in the competitive market. Both concepts are value drivers for the business to get success in the relative industry.

With respect to the case study of Southwest Airline, it has been found that the company has an effective strategy to run its operation in a competitive environment. In comparison to many of its competitors, it has been found that the company offers a distinctly no-frill service. The main focus of the company is on making an effective strategy. It has been analyzed that there are targeted airports by the company where routes overlooked or badly handled by other airlines. It shows that the availability factor is effective for the company by which the company can grab huge opportunity to reach peak. The order qualifier and order winner in the context of the company are mentioned below:

The cost is the major order winner of the southwest airline which cannot be beaten by another competitor of the company. The function of the company is framed by taking consideration of the order winner as the company applied many strategies that refer to cost-cutting strategy. it has been found that the facilities of the company are streamlined in which the routes of this airline are shorter in comparison of other airlines and one kind of aircraft is taken into consideration by the company (Prajogo and McDermott, 2011). It represents the approach of the company towards cost-cutting. The main motive of the company is to do more for less in which the company does work hard in comparison of their competitors. Planes turn around earlier and the staffs of the operation are fewer. It has been found from the case study that by not using travel agents which helps the company to reduce the cost in the form of the agent’s commissions. A southwest airline has approached number of strategies to reduce the cost and become famous in airline industry as no airline can beat cost-cutting strategy as Southwest airline does.

On the other hand, quality is another factor of order winner in the context of the southwest airline. It has been found that the quality conformance is considered as an integral competitive criterion of order winner concept. Due to manufacturing techniques of Japan, the quality level is referred by each company to attain competitive advantages. It is vital for the suppliers to be aware of what dimensions the customer involves in the criterion of quality. Southwest airline has been able to evaluate this criterion in which the main focus of the company is to focus on cost cutting along with quality factors so that the company can reach up to maximum number of employees (Kathuria, Porth, Kathuria and Kohli, 2010). In case of finding the gap between the current performance of the supplier and the customer’s need, it is required by the supplier to amend the performance so that the demand of the customer can be fulfilled. It has been found from case study that the leader of the company (Kelleher) has faith in leading by illustration instead of focusing on direction. The company maintains thee closer relationship with customer that be the cause of customer loyalty frequent flyers know ground staff, cabin crew which makes good relationship with the company for a long period.

Order Winner: Cost and Quality

Order qualifier is the factor that refers to the competitive priorities that should be fulfilled by the company to qualify as a competitor in the marketplace. Availability cones under in those competing priorities that comes up to expectations of order qualifier. The company has approached a plenty of factors to remain in the competitive environment for which the company has approached those place which is out of think of other competitors. This kind of different thinking might lead the company at peak (Lockett, Johnson, Evans and Bastl, 2011). The system of operation management has turned into new an effective strategy for which speed and flexibilities are two key components for the company. By operating a turn-up policy, the company is able to provide services at lower rate to the customer and increase availability. Southwest opted ground that has mid-sized airports in cities such as Los Vegas, Sacramento, Little Rock and Phoenix.

In the context of process of improvement and development of order winner and order qualifiers, it has been found that the company has adopted a number of approaches such as low cost position strategy, quality services and availability factors. It shows that the company should focus on continuing streamlining and automation by which the company can cut cost and attain competitive advantages (Huo, 2012). The company can implement services in such areas where its competitors exist, the company should not cover all areas but it should cover at least that area where passengers face issues due to lack of availability of planes. However, cost and quality is the order winner for the company and the approach and the strategies of the company towards availability would be helpful in catches up other’s order qualifier. It has been found that the trust of the customer has a significant impact over the performance of the company that is why it is vital for the company to be on words and make visualize what is real so that the trust of the customers can remain same for the company (Ramasamy and Yeung, 2010).

It has been found that supply chain integration is the major factor in the hard economic situation. It has been implied to the company to keep focus on the different kinds of supply chain as one kind of supply chain factor influence another factor. The lean supply chain and agile supply chain are two major concepts of supply chain which are applied to Southwest Airlines. The company should focus on supply chain as per the main motive of the company towards attaining competitive advantages (Zorzini, Corti and Pozzetti, 2008). It is necessary for the company to improve the customer service to focus on both agile and lean supply chain as the main motive of the company is on cost cutting and quality of the products. Lean supply chain has focused on developing high volume at low cost. It shows the company should include other facilities like competitors such as food, online ticketing but on lower cost in comparison of other airlines. On the other hand, in the context of agile supply chain, it has been found that it focuses on the flexibility and receptiveness. It has been found that “customer centric” supply chain has an effective influence on Southwest in order to answering to number of needs of different kinds of customers in an effective manner.  

Conclusion

It has been concluded that the order winner and order qualifiers have significant impact on the performance of the company. The discussion has been made by taking consideration of both aspects in which definition of order quality and order qualifier have been elaborated. The literature review section has entailed the discussion on both aspects and the process for improvement in order winner by Southwest in order to attract number of customers towards the services. Potential implications have been made in the context of the southwest airlines so that the performance of the company could not get affected due to any potential issues. Along with that the supply chain of the company has been mentioned under this assignment in the context of the chosen company.

References

Airlines, S. and Roadway, U.L., 2014. Southwest Airlines. Facebook. com.

Caniato, F., Caridi, M., Castelli, C. and Golini, R., 2011. Supply chain management in the luxury industry: a first classification of companies and their strategies. International Journal of Production Economics, 133(2), pp.622-633.

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.

Jaller, A. and Ullstrom, P. 2008. Identification of order winner and order qualifier characteristics: case studies on the home appliance market. Available [online]https://www.diva-portal.org/smash/get/diva2:1022819/FULLTEXT01.pdf Accessed on: 19th December 2018.

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.

Lockett, H., Johnson, M., Evans, S. and Bastl, M., 2011. Product Service Systems and supply network relationships: an exploratory case study. Journal of Manufacturing Technology Management, 22(3), pp.293-313.

Lyles, M.A., Flynn, B.B. and Frohlich, M.T., 2008. All supply chains don't flow through: Understanding supply chain issues in product recalls. Management and Organization Review, 4(2), pp.167-182.

Prajogo, D.I. and McDermott, P., 2011. Examining competitive priorities and competitive advantage in service organisations using Importance-Performance Analysis matrix. Managing Service Quality: An International Journal, 21(5), pp.465-483.

Ramasamy, B. and Yeung, M., 2010. The determinants of foreign direct investment in services. World Economy, 33(4), pp.573-596.

Southwest, 2018. About us. Available [online] https://www.southwest.com/html/about-southwest/index.html Accessed on: 19th December 2018.

Tierney, S. and Kuby, M., 2008. Airline and airport choice by passengers in multi-airport regions: the effect of Southwest Airlines. The Professional Geographer, 60(1), pp.15-32.

Zorzini, M., Corti, D. and Pozzetti, A., 2008. Due date (DD) quotation and capacity planning in make-to-order companies: Results from an empirical analysis. International Journal of Production Economics, 112(2), pp.919-933.