Operations management is the planning, organising and controlling all sectors of the operations process to potentially meet customer demands and expectations while also using resources efficiently. Globalisation is the removal of trade barriers between nations resulting into one single economic market. This is both detrimental and progressive to a business as it brings significant impact on operations strategies. This can be seen through the case studies of the largest Australian airline, Qantas and leading global manufacturer and seller of sportswear and accessories, Nike.
Global Sourcing:
Global sourcing is an important aspect to a global business, as this can significantly decrease cost as well as have access to resources, technology and expertise overseas while increasing efficiency. However, the reliance on the supplier and the quality control of the outsourcing partner is potentially a threat to the businesses reputation and ability to succeed.
Qantas:
Qantas’s strategy to increase efficiency and minimise cost is to outsource maintenance and fuel overseas, which allows Qantas to increase international competitiveness. However, the lack of quality in the outsourcing partner brought negative impact on the company.
Qantas has experienced many cases of technical difficulties and emergency landings in 2014 due to its outsourcing of maintenance work. Daily Mail Australia was told by Qantas that a majority of maintenance is carried out in Australia. However, due to the lack
On October 22nd, 2001, the Industrial dispute between QANTAS and its employees was initiated with the offering of a new Enterprise Bargaining Agreement. This proposed an 18-month wage freeze for employees plus a sliding scale profit share scheme. Ten out of twelve unions under QANTAS accepted the terms of the agreement, barring the unions of manufacturing employees (AWU and AMWU). They were holding out for a 4-6% pay rise. On the 8th May 2002, some ten months later, the dispute was resolved when QANTAS agreed to an across the board 6% pay increase. This essay provides an in-depth analysis into the dispute, including causes, the resolution process, the role of stakeholders, and costs and benefits for all concerned.
The boards of directors are implicating new strategies to help Qantas renew in the post maturity stage. These strategies are:
Outsourced almost 87% of production activities involving spare parts while maintaining core competencies like R&D, design, quality control and key trademark
Operations management refers to all levels of an organisation and how best to efficiently convene, fund, maintain and maximise its services and/or operations, both internal and external. The core goal/objective of operations management it to maximise outputs while reducing and minimising the inputs required to achieve the desired results.
The reason of the creating competitive pressure to firms is that which from the enhancing the quality but decreasing the price synchronously. The key of success is that the firms and organizations which treat “Global Sourcing” as a weapon fighting with its competitors.
Rivalry among industry competitors has caused attention to be focused on tariff levels. Airfare prices were at an all time low in 2009. This suggested a strong competitive rivalry based on price differentiation. This price differentiation will cause a dramatic loss in revenue if these prices continue to drop and this would lead to a reduced competitiveness. In an effort to safeguard revenue and reduce expenditure, Qantas has developed a strategy to deal with a change in the external competitive environment. .
This method involves selling products below production cost. This attracts customers to the business, who then purchase other products. Ultimately, this improves profits, brand loyalty, and market share. Qantas has used this strategy during the launch of its subsidiary, Jetstar, in 2006. For example, flights from Melbourne to Sydney was offered at $19. These low airfares attracted customers away from its competitors, such as Virgin Blue. This had seen
By using strategies like Fuel hedging in order to turn a variable cost into a fixed cost means that qantas can lock in a certain price for fuel (via contract) and save money if the price of fuel increases. Qantas’ future in efficiency looks to be very promising as an increase in use of E commerce, more efficient planes, and improved economies of scale all work in favour to ensure qantas’ ability to
The outcomes of the changes saw a more effective/ more efficient management structure, allowing Qantas to deal with changes in the internal and external business environment more effectively.
Operations refers to the transformation of raw materials(inputs) into finished products(outputs). The operations process is one of the key business functions and is a crucial component to business success. Like every business, Qantas is affected by many internal and external influences requiring it to have effective strategies to respond to these influences. Businesses that are able to adopt and utilise effective operational strategies are able to quickly adapt and either reduce or take advantage of these influences that impact the business. The effectiveness of these strategies can measured by Qantas’ performance and whether or not it is able to hold it’s competitive advantage. How well these strategies respond to the influences on
Founded in Queensland Australia in 1920, Qantas has now become Australia 's biggest name in relation to domestic and international airline. Originally registered as the Queensland and Northern Territory Aerial Services Limited (QANTAS). Qantas is widely regarded as one of the world 's top airlines and one of the strongest brands in Australia. Over the years it has managed to build a reputation for excellence in
James, T. (2011) defines Operations Management as the management of the processes which aid production of goods and or services. This implies that all production activities must be coordinated well to ensure a lean process of resource management is adopted.
Operations Management in an organisation is repsonsible for managing and in making decisions concerning the activities that convert inputs into outputs , that is goods and services. This covers both short term actvities as well as longer term activities to meet strategic goals. Inputs can be the raw materaials need to manufacture goods such as furniture or the computers needed to create a service like online shopping site. Operation management’s role is to make decisions to improve how operation activities function, for example, to improve the final quality of the output or to change production methods to be more efficient in terms of cost and in time.
Provide full value of money for customers through reduce cost and enhance level of quality (Qantas Airways Limited, 2014).
Operations management is generally described as the planning, arrangement, and control of activities that change raw materials or an organization's input into finished products and services. The overall activities covered by operations management include the creation, development, manufacture, and distribution of products. The concept also relates to various activities such as inventory control, controlling purchases, quality control, logistics, storage, and evaluation ("Operations Management in McDonalds", n.d.). Since operations management covers the entire operations in an organization, it mainly focuses on the efficiency and effectiveness of the firm's processes.