Southwest Airlines Company

Southwest Airlines Corporation is a significant carrier in the United States and around the world since it is the largest low-cost carrier, with its headquarters in Dallas. Herb Kelleher founded Southwest Air in 1967, but it later changed its name to Southwest Airline. It began operations as an intrastate carrier within the United States in 1971. According to July 2017 data, the airline currently employs over 55000 workers and has over 4000 daily departures (Murray, 2016). It is preferred in local transportation since it has 99 destinations in U.S in addition to 8 countries globally and it expected to open up destinations in Turkey and calicos by November 2017. The company operates Boeing 737 jetliners making it the world’s largest operator of the planes with more than 700 under its service and each flight has an average of six flights on daily basis.

Generating Value

The operation managing functions of the firm mainly focuses on the staffing, planning, leading, controlling and organizing practices to successfully cater for operational verdicts. Southwest Airline utilizes the functions to ensure that they create appropriate values for the customers by allocating tickets at affordable rates which can be booked online so as to meet the demands of their customers. The airline has a distinctive course that focuses on principles based on the experience and knowledge which facilitates the information dissemination across various business operations, divisions as well as working with allied companies. The airline uses a key concept of cross-functionality teams as a management strategy to access its organizations and functions across the global destinations. The concept incorporates employees across various locations in order to identify healthy conflicts in the business(Braithwaite, 2015). Healthy conflict is considered a cooperative entity which generates innovative thinking capacities since it considers the challenges that arise while serving the customers thus forming a more direct and active way of conducting business. The company also utilizes the stretch concept which occurs as a result of the entire activity spans in the company thus drawing viewpoints that meet the expectations of the clients. This is made possible by combining different ideas and backgrounds to generate solutions that broaden the firm to new directions.

The Competitive Advantage

The competitive advantage which involves a range of unique features of various firms and how the target market perceives the products including the significance it brings so as to be considered superior in the competition field. This results in customers being loyal to the carrier and the reasons for the preference which the airline has been able to achieve through utilizing differential and competitive gains. The airline focuses on offering affordable prices, employees motivation, future oriented as well as differentiated services strategies to achieve competitive advantages. This is facilitated by absences of frill services and fast transportation without meals offered or advanced reservations thus cutting the cost. After the terrorist attack in September 11th the company was able to cope with the crisis without reducing the number of workers but instead it decreased the staff payment due to flexible structure of administration(Thompson, 2014). Commitment is also highly upheld in the company since internal and organizational goals can be set and achieved thus developing customers confidence as well as facilitating innovation among stakeholders.

Manufacturing and Service Operations

Manufacturing and service operations are similar especially in the creation of the organizational mission and vision thus formulating the process of running the company. However, both operations focus on different planning and management strategies in terms of running a firm. Southwest airline is mainly centered on connecting people which is a philosophy that has been upheld for over 40 years through various internal processes. The firm is keen on identifying opportunities that can influence the expertise together with talents across the entire organization(Laudon, 2013). This has resulted to activities realignment among various teams in the company thus realizing profits accrued with proper management systems. Service operations are classified according to industries they serve which include the advertising, banking, consultancy and hospitality which Southwest Airline exploits to reach out to the customers and notify them of new services, how they can be utilized as well as the payment procedures to be used. Both the management and service operations experience a similar issue especially when determining the final cost of transportation. For instance, the cost of transportation affects the manufacturing operations since the company has to look for lower priced input materials which produce high-quality services. On service operations, providing services at an indirect cost is usually low in order to achieve competitive prices that suit the clients while maximizing the profit. Both operations also face the unpredictability challenge in terms of demand as well as realizing a competitive market.

Theories and Techniques

Material requirements preparation/planning (MRP) refers to a computer-based account managing system which is crafted to help the production managers’ schedule and place orders of dependent demand items. MRP is processed using information gathered from the master schedules, material bills, component parts as well as the subassemblies required throughout a planning horizon. This resolves the gross materials needed by subtracting the inventories at hand and adding the safety stock usually required in calculating the net requisites. MRP commences with a program of the end products which is then converted to a requirements plan for the component parts needed for production thus coming up with a final service schedule. Information inputs towards an MRP are grouped into three to form a materials bill, inventory file records as well as a master schedule. Materials bill is essential in determining individual components quantity thus enabling the system to reduce the number of items existing in an inventory to resolve order requirements. Inventory file records offer a secretarial of an existing inventory which requires being deducted from needed materials. The master schedule sketches the probable production activities in a firm which is formulated through external orders and internal forecasts. As a stakeholder in the company, the focus should be placed on maximizing the profits generated after offering services while reducing the cost of production.

Theories and Techniques

The program evaluation review techniques together with the critical path methods are essential tools for planning, managing, and scheduling complex projects. The techniques are also referred to as network analysis since they offer insight to project managers and planners who can be involved in brainstorming. Both methods are utilized in evaluating the team or individuals performance in an organization with the key concept revolving around small activities that take longest tracks in the network activity thus controlling a project. Project management and review technique are usually suitable whereby the time required to complete various activities is not predictable. Critical path method is usually preferred in handling tasks that are persistent in nature(Daft, 2016). However, both the CPM and PERT methods apply a universal approach meant for designing and asserting a network as well as a critical track to be followed. PERT can be used in the airline industry for conducting research and formulating projects in order to cater to the client’s preferences while CPM can be exploited in the service sector by through the rapid rewards regular flyer program. PERT is very essential in managing unpredictable activities of a firm thus the airline can be able to create work plans of future projects while at the same time they can use CPM to manage the ongoing projects in the organization. CPM technique is very crucial in differentiating the critical and less critical activities in an organization, unlike the PERT method which largely depends on future predictions. In addition, PERT method allows a three-time approximation which gives room for desired changes while the CPM technique only allows a onetime estimation since it focuses on the implementation of projects.

Job Sequencing and Priority Rules

There are four key priority rules which are essential in job sequencing thus exploited in production based surrounding like in the Southwest Airline facilities. The first rule is about the first come; first serve whereby as a company, it can be of great advantage since the clients who visit the firm has a better opportunity to access the carrier services immediately after the payment is made. The airline strictly operates on payment as someone travels thus eliminating the reservation services which can be cancelled by clients causing losses to the company. The second rule is shortest processing time meaning that the tickets require a shorter period to be processed thus favoring the market demand by handling clients as research for the complex services is being conducted(Daft, 2016). The third rule assigns services according to the earliest due dates thus ensuring that ordered tickets are processed immediately to ease a probable congestion in supply though it may largely affect an innovative research project through termination especially if expertise is required. The fourth rule is about the processing period tasks which take a longer processing time are assigned first thus ensuring that the period has been extensive enough to cover the issuing process as desired by the clients. However, the longer periods may not favor the urgent services which may result in a change of preference by clients.

Theory of Constraints

The process of identifying the most crucial limiting factor that hinders the achievement of a goal and later improving the constraint synthetically until it ceases being a limiting factor is referred to as the theory of constraints. There are five key steps in the process that commence with the identification of constraints by the airline thus recognizing insufficient utilities required in the carrier industry. In the second step, a plan is developed to overcome the identified constraint thus Southwest airlines can count the register to verify extra tickets that are required to ensure a smooth transportation system(Braithwaite, 2015). The third step focuses on accomplishing the developed plan through the creation of contact with the customer and setting a timeframe of when to board or alight the carrier system in the airline. The fourth step deals in reducing the constraints effect through expanding capacities to do work or offloading the labor by ensuring that constraints are recognized by various stakeholders. In this step, the firm can place required tickets order while communicating with a client to secure time for more production of tickets as well as ensuring sufficient inventory in the future. The last step is based on the identification of new constraints soon after overcoming the initial constraint thus in the process, Southwest airline takes inventory counts into consideration thus reviewing required services to ensure they are sufficient for future purposes.

Forecasting

The task of forecasting usually involves five steps that are essential in conducting various procedures in a company. Problem description is the first step in the task whereby defining requires a keen understanding of the forecast to be used, the group that needs the forecast and the suitability within the organization. A forecaster is required to spend time communicating to stakeholders involved in data collection as well as maintaining the database thus utilizing the forecasts in planning for the future. The second step involves the gathering of information which is usually required in statistical form or accumulated expertise from forecasters and data collectors. In most cases, acquiring historical data to fit into statistical models is usually difficult due to changes that occur in the system. The third step involves exploratory analysis which commences with a graph data that considers factors such as the constituent patterns, seasonality, significant trends, existing business cycles, outliers, and relationships between the variables used in the analysis(Thompson, 2014). The next step is about choosing and appropriately fitting into models whereby the best to sculpt depends on historical data availability, forecast used, and the relationship between explanatory and forecast variables must be strong. The models are usually artificial constructs based on implicit and explicit assumptions that involve several parameters that should fit into historical data. The final step involves evaluating and exploiting forecast models since performance can only be assessed after forecast data is available. This is achieved through accurate methodologies as well as organizational issues thus the airline can be in a position to utilize the steps to directly influence research using historical records thus achieving universal benefits in forecasting the outcome based on past occasions.

Supply Chain Risk

The major categories of supply chain risk are the internal and external factors which after identification can reduce the impact of disruptions on the business through identification of risks resulting from the supply chain thus formulating mitigation measures. The risks should be documented in a management plan as part of the overall continuity plan of a business. External threats are out of control by the firm while internal hazards can be controlled by the organization. Demand, supply, environmental, physical plant, and business risks make up the external hazards which can pose social, economic and management challenges toward a business(Daft, 2016). Internal threats include the business services, control, planning, cultural, contingency, and mitigation risks which cause a slow organizational reaction in case of an unexpected order of events. The occurrence of natural disasters in the company can be mitigated through an allocation of supply, sharing of information across various branches in the airline, managing the production process as well as empowering the action taken to be flexible and have a rapid response.

Just-in-Time, Lean, and Toyota Production System

Just-in-time, lean and Toyota production system are concepts related to achieving the ultimate goal that facilitates the companies financing while generating quality goods as they focus on ideal production. Just-in-time hypothesis is an inventory tactic employed by companies to increase their competence and at the same time reducing waste by receiving supplies only at the required time. Toyota production system is a means generating things with global recognition since, over the past years, continuous improvising of the systems has achieved a quick response towards customers. It is based on human touch automation meaning equipment halt when a problem occurs to prevent defective production of services, and just-in-time concept meaning that the production process takes place in a continuous flow led by necessities(Braithwaite, 2015). The lean concept is mainly a management philosophy which can be applied in various sectors including businesses since it is a way of achieving more yields using fewer resources thus creating companies that have amplified flexibility over a short period of time while focusing on the needs of a client. Companies using lean operations like the airline, closely couple the processes of working through utilizing learning processes that continuously improve the quality of work since there are no slowdown processes. Flaws revealed across the operations in a firm do not hinder the progress thus Southwest Airline can utilize the theory to achieve nonstop services to clients.

Total Quality Management

Total quality management refers to a scientific mathematical method of studying the quality, refinements, and productivity in a commercial organization. It works horizontally in an organization thus including suppliers and the clients and can be summarized as a managing scheme meant for customer-oriented organizations involving continual employees’ improvement. TQM follows certain principles which include customer focus, process approach, systems management, staff participation, continuous improvements, leadership, decision making based on facts and relations with the provider of mutual benefits. Southwest airline uses the creation of techniques to improve service delivery through the creation of measurements and standards that define the quality of the firm constitutes(Braithwaite, 2015). A major challenge faced is the augmented supply chain threat resulting from unexpected calamities which can be reduced through identification of vulnerable areas and reducing the supplies reliance through total quality administration. Statistical quality management is the root of worth movement usually used in evaluating services offered in the company. An important feature of a service can be verified to create departures from a measurement in an acceptable manner. Recommended outcomes can be documented and constantly updated since samples are collected, measured, and recorded.

Sustainability

Triple bottom line strategy is a framework used in accounting to incorporate performance dimensions in social, financial, and environmental sectors also known as people, profits, and planet. The airline aims at improving people’s position in various categories by guaranteeing fair wages, work safety, and educational opportunities. It is continually searching for means of reducing environmental degradation through a selection of highly maintained airplanes, service delivery methods, innovation processes, and disposal of waste products thus reducing the negative environmental impacts(Hitt, 2013). The company has made investments to create more profits through formulating risk profiles, enhancing the workers’ morale, intellectual property, and ensuring the valuation of the company.

Environmental Management

Environmental management values containing elements such as auditing, environmental management, performance evaluation, life cycle review, and labeling are incorporated in ISO 14000(Thompson, 2014). Decreasing environmental impacts throughout the airline lifecycle or service delivery series is vital in environmental conservation. Environmentally unfriendly substances are managed in the airline using technical principles allied to the company in addition to environmental philosophies and action plans shared with respective clients. ISO standards are essential to ensuring compliance with regulations and laws set for specific workplaces thus the airline has created a system to fulfill local and international governments’ regulations, voluntary controls as well as the required standards.

Integrated Corporate Responsibility

Integrated corporate responsibility focuses on how firms manage various businesses to produce a positive impact in society. The main aim of corporate social responsibility is maximizing economic profits, dividends, and the price share, all bound by regulatory obligations to address environmental and social issues. Corporate responsibilities represent the methods used by companies to achieve acceptable ethical standards needed in balancing environmental, social, and economic implications while addressing stakeholders’ expectations(Laudon, 2013). Southwest airline has been able to ensure corporate leadership that reflects the company’s legal formalities thus providing foundations essential in ensuring sustainability as well as enhancing accountable operations in business. Corporate responsibility is part of the global partnership vision for ensuring sustainable growth in addition to favorable approaches in managing businesses for a long period.

Conclusion

It is evident that the airline has played a great role in transforming people’s lives globally through offering chances to conduct research and grow abilities. It has enhanced customers’ experience through incorporating their views thus producing desirable services available at very affordable prices. This has only been achieved through several business formats that work on eliminating the foodstuff and reservations thus maximizing profits generated while conserving the environment. The company has also been able to compete globally with other firms as well as collaboratively working with other organizations to enhance innovation in the air carrier services.

References

Braithwaite, A. (2015). Business operations models: becoming a disruptive competitor. London: Kogan Page.

Daft, R. L. (2016). Organization theory & design. Australia: Cengage Learning.

Hitt, M. A. (2013). Strategic management: competitiveness & globalization. Australia; Mason, Ohio: South-Western / Cengage Learning.

Laudon, K. C. (2013). Essentials of management information systems. Boston: Pearson.

Murray, L. K. (2016). The story of Southwest Airlines. Mankato, Minnesota: Creative Education.

Thompson, A. A. (2014). Crafting and executing strategy: the quest for competitive advantage : concepts and cases. New York: McGraw-Hill/Irwin.