Qantas Operations Case Study Flashcards
Strategic role of operations
Cost leadership
Product differentiation
Most organisational activity comprises the day to day activities within the operation function.
Cost leadership:
Qantas has minimised costs by over $5 billion in the last 10 years through:
- Economies of scale – Oneworld Alliance share route networks and processes, reducing costs by sharing them
- Standardisation – less destinations leads to less variation in operations
- Technology – capital-labour substitution saving on labour costs
- Waste minimisation – electricity, water and waste reduction
Product differentiation:
- Australia’s largest airline with the most comprehensive domestic and international coverage
- Jetstar is a budget option whilst Qantas has more premiums like meals and inflight entertainment
- Variety of classes offered (first, business, premium economy and economy internationally; business and economy domestically)
- Comfort based features like skybeds, lounges and online check-in and self service
Interdependence with other KBFs
Human resources
Finance
Marketing
Human resources:
- Staff recruitment for all operations
- Staff training and development
- Staff retention through rewards
Finance:
- Monitors, records and analyses financial transactions
- Provides regular, periodic reports on financial performance
- Acquire funds for purchasing and leasing planes
Marketing:
- Provide market requirements for all operations
Globalisation
- Qantas have launched new destinations and markets overseas allowing for it to become an internationally recognised brand
- Jetstar have also gone global with budget options in Asia
- Cost minimisation locally to be more competitive overseas
Technology
- Newer planes which are more efficient with greater capacity
- Inflight entertainment systems
- Increased training to upgrade to new technologies
Quality expectations
- Self-service check-in
- Q bag tags (permanent tags which can be used for all domestic Qantas flights)
- Newer planes
- Specially designed menus
Cost-based competition
- Outsourcing
- HR practice reform
- Capital-labour substitution
- Online bookings
Government policies
- Economic activity affects demand
- Fair Work Act increased labour costs
- Federal Government has been increasing access to Qantas protected international routes
- Environmental policy
Legal regulation (operations)
- Subject to the Civil Aviation Authority
- Required to hold operating licences
- Federal security regulations in response to terrorism
- State government labour regulations
Environmental sustainability
- Purchasing new, environmentally sensitive aircraft
- Fuel conservation
- More fuel efficient fleet
- Commercial flights powered by sustainable biofuels
Corporate social responsibility
- Health surveillance program continually monitors workplace conditions and helps employees achieve a healthy work-life balance
- Focus on employing Indigenous Australians increasing diversity
- Donations of millions to charitable causes
- Energy and water conservation, recycling, reduced carbon emissions
Inputs
- Transformed resources
- Transforming resources
Transformed resources: Materials: - Fossil fuels - Timber - Oil - Water - Food - Stationery - Computers Information: - Statistics - Market/industry reports - Previous performance data - Customer bookings/transactions Customers: - Moved from one place to another Transforming resources: Labour: - Assemble the inputs - Operate/maintain machinery and equipment - Fulfil sales - Distribute output - Deal with customers Capital: - Terminal buildings and contents - Maintenance facilities - Spare parts holdings - Aircraft - Computers - Motor vehicles - Can co-share with other airlines for mutual benefit
Transformation process
- Volume, variety, variation and visibility
- Sequencing and scheduling
- Technology, task design and process layout
- Monitoring, control and improvement
Volume, variety, variation and visibility:
- Volume – Process millions of people worldwide, must be able to adapt to change
- Variety – Produce a variety of domestic and international services so must be flexible
- Variation – Predictable increases in demand for school holidays and special events; events like 9/11 and Covid saw sharp falls in bookings
- Visibility – High as customer contact exists throughout the process
Sequencing and scheduling:
- Products must be out as fast as possible
- Planes must be cleaned and checked before take off
- Complex scheduling software is used to automate flight scheduling, helping to schedule the time between flights, repairs and downtime
Technology, task design and process layout:
- Technology – Capital-labour substitution
- Task design – Breakdown of individual tasks, analysis and assessment by HR
- Process layout – Occur in the terminal, hangar and maintenance area; machines and equipment are grouped by function
Monitoring, control and improvement:
- Qantas detect discrepancies between planned and actual activity, taking corrective action if necessary and then intervening to impose new plans
Outputs
- Customer service
- Warranties
- Net promoter score is a key measure of customer service
- Qantas Closed Loop Feedback Program enables direct feedback from frequent flyers
Performance objectives
- Quality
- Speed
- Dependability
- Flexibility
- Customisation
- Cost
Quality: - Transactions must be accurate - Aircraft is clean and tidy - Staff are courteous, helpful and friendly Speed: - Customers are processed swiftly - Online bookings Dependability: - Reliable and consistent service - Departures and arrivals are on-time Flexibility: - Must respond to market changes - Jetstar demonstrates flexibility in product and a response to low cost competition Customisation: - Oneworld Alliance membership offers worldwide services - Jetstar’s low costs - Different seating classes Cost: - Processes must be efficient - Measured through productivity
New product design and development
- Qantas has launched 4 new airlines in the Asia-Pacific region to take advantage of growth
- Qantas constantly updates services and processes to remain competitive
