Operations Management in British Airways

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Table of Contents

Overview
The Concept of Operations and Component Parts of Operations
Operations and Strategic Objectives and their Relationship
Information Management
Distribution Channels
Factors that Impact on Operations
Impact of Stakeholders
References

Overview

Throughout its operations, British Airways (BA) has greatly benefited from its effective operations management. This has resulted in the introduction of policies and strategies that have enhanced the business operations of the firm in a bid of striving to achieve client satisfaction and realizing operational goals and objectives (Smith 2012).

As such, BA has created a strong brand name within the aviation industry based on the number of its international flights, its fleet size, as well as the quality of service it offers to its clients. This paper will thus critically analyse operations management at BA.

To achieve its goals, the paper will focus on BA’s concept of operations, its component parts of various operations and how they interlink with each other, the relationship that exists between the company’s operations and its strategic goals and objectives, distribution channels, factors that impact on operations, the relationship between operational objectives and strategic objectives and the role played by the stakeholders in operations.

The Concept of Operations and Component Parts of Operations

As a renowned entity, BA is currently involved in a number of operations to meet the needs of its clients. These operations can be categorised into dependability, speed, quality, and costs (Cummings 2007). It is evident that these operations are entirely service based in nature.

The operations management team at BA has come up with a number of processes and strategies that aim at enhancing its overall dependability in the short run and in the long run. This team is mainly involved in management, design, and improving the various operational systems and processes within the entity (Taylor 1997).

To further enhance their efficiency, the operations management team has adopted and implemented the use of information technology (IT) as a means of increasing the overall dependability of the firm. As such, all operational parts of the entity are interlinked via IT networks.

Through this approach, the firm believes that the overall efficiency of its operations has improved hence giving it an edge over its rivals not only in Europe but worldwide.

In the airline industry, speed is a factor of essence. With the help of its competent designers who form part of the operations team, BA has introduced integrated circuits as a means of enhancing the speeds of its flights (Gubbins 2003).

This move has played a significant role in enhancing the overall efficiency of the firm’s operations, hence increasing its overall success in the airline industry.

Consequently, BA has introduced the ‘Know-Me’ program, a computerised system that enables BA staff as well as its cabin crew to find the photographs of passengers on board a specific flight (Parker 2012).

This strategy has proven to be an effective technological advancement, especially on high ranking passengers such chief executive officers who strive to meet tight schedules and hence saving them a lot of time in the process of booking flights and quick arrival to their destinations.

To develop a strong brand loyalty, BA has dedicated a number of operations that aim at enhancing the overall quality of that the firm offers.

One of the means through which BA has strived to improve and maintain the high quality services that it has been offering over the years is by maintaining a highly qualified and skilled personnel (Parker 2012).

BA has put in place various training programs that aim at enhancing the skills and expertise of its staff as a means of meeting the contemporary needs of its clientele.

BA has implemented programs such as the IT graduate apprentice program, a course that aims at imparting technical IT knowledge and skills to new as well as existing employees within the entity. There is also the ‘New Skills Strategy’ program that aims at enhancing the personal development of BA employees.

Thus, the technical and business knowledge and skills that employees develop as a result of these programs greatly enhance the overall quality of service that they deliver to BA clients hence leading to the realization of the firm’s operational goals and objectives.

Through its operations management team, BA has come up with concepts that aim at reducing the overall costs of operations within the firm.

In recent times, BA has been facing cost uncertainties that arise from the fluctuating oil prices, reduced prices from rival firms, economic uncertainties as a result of the recent global recession, as well as volatile exchange rates in the international market (Parker 2012).

In response, BA has incorporated the use of optimized fuel systems that ensure fuel is used by aircraft in an effective and efficient manner. Consequently, the firm has automated some of its cabin crew services in a bid of reducing its workforce.

According to Smith (2012), the automation of cabin crew services has enabled BA to reduce approximately 1700 employees.

Operations and Strategic Objectives and their Relationship

As asserted by Pinder (2012), an organization has to achieve its objectives to ensure that its strategy has succeeded. This fact clearly defines the relationship that exists between operations and strategic objectives. As asserted earlier, the operations of BA aim at improving its dependability, speed, quality, and costs.

All these operations are related and interlinked to the strategic objectives of the entity that are summarised in the table below (Pinder 2012).

Operations and Strategic Objectives

One of the most critical strategic objectives of BA is to meet the needs of its target market while at the same time ensuring that it gets maximum profits in the process. Secondly, BA also strives to ensure that it is considered the airline of choice by its premium clients.

The firm also wants to deliver differentiated service to all its clients, enhance its presence in key cities around the world and to sustain and build a strong brand name as the leading airline in London.

It is thus evident that these objectives will only be realised in an event where BA’s operations are highly dependable, conducted effectively and efficiently, delivered in high quality and achieved through cost effective approaches and mechanisms.

Information Management

Information flow is critical in any organization. It is due to this fact that BA has integrated an effective and efficient management information system through its e-database whose main role is to control information as well as material flow within the entity (Plenert 2002).

At the same time, this system also ties together the various operating units within the organization. Additionally, this system also ties together the respective systems that sustain the entire e-database network (Plenert 2002).

Additionally, BA has a multifunctional system whose main role is to regulate processes such as design, research, and engineering processes that are critical in the development, production and improvement of products and services within the entity.

Distribution Channels

To effectively reach out to its clientele, BA has come up with two effective distribution channels. There is the direct distribution channel where clients book flights directly from BA reservation system (Smith 2012). The advantages of this approach is that the firm has direct control over the entire reservation program.

Moreover, this approach greatly reduces its distribution costs. There is the third party distribution channel where the company uses third party institutions such as travel agencies.

Despite the fact that this approach increases the overall distribution costs of the firm, it also maximizes BA reach to customers all around the world hence increasing its overall sales.

Factors that Impact on Operations

There are internal and external factors that have a huge impact on the operational outcomes of a given entity. According to the Porter 5 forces analysis, rivalry, threats of substitutes, threats of new entrants, buyer power, and supplier power are the key external factors that can affect the operations of a given entity (Pucik 2007).

In the course of its operations, BA has been experiencing competition from rival firms such as Easyjet and Virgin Airlines (Pucik 2007). Essentially, rivalry tends to reduce the overall profits that a specific entity can earn within the industry it operates in.

As such, BA has strived to achieve a competitive advantage over its rival firms through service differentiation and its pricing mechanism and as such, the firm has been forced to modify its operations to realize these goals.

Consequently, operations at BA have been greatly affected by threats of substitutes. Individuals can choose alternative forms of transportation using either rail, road, or water to arrive at their destination.

Through its operations, BA has strived to encourage its clients to use air transport and specifically to fly with them and not any other airline. At the same time, the firm has been facing constant threats from new entrants.

However, given the fact that the cost of entering into the airline industry is high and already BA has developed a strong brand name as the leading airline in London, this factor has not greatly affected the operations of the firm. BA also faces threats from its suppliers.

According to Cummings (2007), the main suppliers of BA are its airplane manufactures (Boeing and Airbus) and given the fact that the firm has long term contracts with them, it is not easy to switch from one supplier to another. As such, BA faces minimal threats from its suppliers.

Finally, buyer power has a great impact on the operations at BA. The main aim of BA is to meet the needs of its clients. This includes individual fliers and travel agencies (Smith 2012).

Since the cost of switching from one airline to the other is low, BA has been forced to come up with effective strategies through its operations not only to maintain its clientele but also to attract new ones. All these operational adjustments have been made to meet the needs of its customers, hence developing a strong brand loyalty.

Impact of Stakeholders

Stakeholders also play a significant role in the process of operations management at BA. Most importantly, stakeholders are highly involved in the process of decision making. At BA, the views of stakeholders are important, especially during the implementation of new processes and the analysis of existing ones.

As such, the stakeholders’ opinion on these processes is influential as it determines the realisation of the set operational as well as strategic goals and objectives (Quelch 2005).

Moreover, there are those stakeholders that are involved in the direct management of BA’s processes. This includes but not limited to the staff of the company. It is their role to ensure that the set operational and strategic goals and realised within the set timelines.

References

Cummings, N 2007, Transforming logistics support for fast jets, The Stationery Office, London.

Gubbins, E 2003, Managing transport operations, Kogan Page, London.

Parker, D 2012, Service operations management: The total experience, Edward Elgar Publishing, Cheltenham.

Pinder, C 2012, Making organizations humane and productive. Wiley, New York.

Plenert, G 2002, International operations management, Copenhagen Business School Press, Copenhagen.

Pucik, V 2007, ‘Human resources in the future: An obstacle or a champion of Globalization?’ Human Resource Management, vol. 36 no. 1, pp. 163-167

Quelch, J 2005, Cases in product management, Irwin, Chicago.

Smith, K 2012, ‘The British Airways Employee Assistance Program: A community response to a companys’ problems’, Occupational Medicine (Oxford, England), vol. 42, no. 1, pp. 15-22

Taylor, D 1997, Global cases in logistics and supply chain management, Thomson, London.

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