Introduction
An essential part of an organization's success is its operations. Without proper concept of operations, it is impossible for the organization to succeed in the development of a smooth process of business production and procedure. The day-to-day business operation is based on this concept of operation management. In this paper, I will be reviewing the operation management adopted by Etihad Airways and du Telecom.
By virtue of the royal decree, Etihad Airways became the National Airline of the United Arab Emirates last 2003 (Grand). The airline was based in Abu Dhabi and has flights in more than 70 destinations around the world. Currently, Etihad Airways has more than 60 passenger aircraft and the fleet is increasing in number as the resultt of the company's direction to make Etihad the largest aircraft in the Middle East region and in global scale.
Etihad Airways is the fastest and most robust airline in the history of commercial aviation. The company won as the "World's Leading Airline" in 2012 at the World Travel Awards. Bearing the slogan of "Change the way you see the world", Etihad Airways continues to become one of the leading airline companies of the world, especially in the Middle East region.
When Emirates Integrated Telecommunications Company (EITC) was rebranded in 2006, it became commercially known as du Telecom (Pan, 2010). As of 2011, the company enjoyed a total of 4.5 million subscribers across its varied and wide range of services and products. Currently, the company enjoys a good revenue increase and trend showing how robust and strong the company can be in the midst of the crisis that the market faced in the past years.
According to the statement of Hatem Bamatraf, the senior vice-president of du Telecom for Network Development, the company's growth and success can be traced to the technical solutions and expertise that the people of the company showed. "We have experienced positive growth and established ourselves as the operator of choice for business and residential customers," he said. The commitment of the company is to foster partnership with various organizations and providers to increase the potential of the telecommunication company.
Task 1
Operations management is defined as the "management of the conversion of raw materials into finished products for onward sale (Galloway, 2012, p.1)." In a larger scale, it is the concept of production management through proper administration, which will transcend the production operations management, production and operations management, and service operations. In the administration of business practices, the ultimate goal is to ensure that highest level of efficiency is achieved by the organization through proper use of the company's resources.
The importance of operations management can be traced to the appreciation or reception of the people concerning the product of service. This means that in the operations management, it is necessary to consider what makes the product from the rest of the available products in the market. All forms of production are aimed to meet demands and needs of the people and to ensure that everything is met to avoid reduction or decrease of the quality and performance of the organization.
For instance, for Etihad, it is necessary to appoint several airport managers who will handle the in and out of Etihad aircrafts. With the aid of a better inventory and supply chain management, it is easier for Etihad to see when the plane should be allowed to fly and when to stop them from flying. By adding new airport managers, Etihad can streamline its operations from a large scale to narrower and more specific tasks and responsibilities. Airport managers look at the resources of the company and ensure that these resources are used properly to meet the demand of the market. It is essential to use these resources properly because of the size of the investment being poured on an aircraft, that a single mistake in the operations may result to millions of financial loss.
While for du Telecom, the operations management is based mainly on how to use physical resources to create new products and services. Instead of providing physical products or services to the consumer, du Telecom provides virtual and invisible products and services that can be enjoyed by the consumer through their phones. As such, it is necessary for du Telecom to ensure that all its satellites and system platforms work properly to avoid miscalculated mistakes in communication. The operations management of du Telecom does not rely much on managers for the smooth flow of procedures and processes; rather the offering of services and products is based on the idea of ensuring that the process of providing services and products is already perfect.
At the top of the operations management of a company is the consideration of the production cost, time, and the legal framework of the provision of services and productions. In designing or offering the product or services, it is very important to see how much is spent per product or service. This is an important value to Etihad because of the growing cost of the airline industry (Shim & Siegel, 1999). Using standardization, Etihad sees how much is spend on each section of the company to plan for a holistic program or package.
On the other hand, it is also important for the company to see the time limitations of the operations management. And of course, it is important to check the legal framework of the operations. For du Telecom, the operations management is deeply anchored on the way the company creates products and services that follow the legal framework of the region. It is impossible for the operations management to be effective without clear adherence to the laws of the region.
Task 2
The operations management of the organization is deeply anchored on the strategic planning. It is the process of re-evaluating the mission of the organization and the current environment or conditions of the company with regards to its market. The goal of strategic planning and operations management is to ensure that current decisions can result to positive future conditions and results. In this regard, it is very important to understand how operational planning works to translate the overall planning or development of the organization (Kumar, et.al., 2009).
Due to the fact that the operations management is deeply rooted on the idea of strategic planning, it is necessary to understand that there are three types of strategic planning. These three types of strategic planning can be found on how businesses and organizations behave with regards to their operations. From time to time, a manager uses these three when the situation arises.
- Entrepreneurial Planning. In the determination of the overall planning and development of the organization, the manager plans out the strategy that will be used in the operations. Instead of allowing the production or operations manager to conduct the research on what plans are to be implemented, in this type of strategic planning, the goal is to create a plan that looks at the overall function of the organization. In Etihad, this type of strategic planning in the production is the main reason why the top management dictates on the number of aircraft that should be dispatched to destinations around the world. Airport managers who are in the field for the operations of the organization don’t have power to determine the destination of their flights or the countries that the country will work with for the airline commercial industry.
- Adaptive Planning. On the other hand, adaptive planning of Etihad is expressed on the way air managers decide on the operation of passenger aircrafts. For a note, it is necessary for the company to divide the organization’s processes and operations into several sections and not a as a whole. For instance, Etihad Dubai’s promotional packages may not work best for other Etihad locations. It is necessary for Etihad to appoint managers who know what promos will work best for the current situation of the company.
- Planning Model. In this model of strategic planning used in the operations of the company, managers can from time to time formulate new strategies that will work for the segment of the company. It is necessary for the manager to create plans that can be used for the operations of the company. Quick reaction is very important in the organization, especially in operations. Businesses should not allow consumers or customers to wait for long time or to get low-quality performance.
Task 3
The concept of systems theory dictates that all organizational components are interrelated and integrated to each other. This means that in order for the organization to survive market threats and risks, it is necessary to have unity of all systems and networks of the organization (Morris, 1996). It is impossible to alienate a section of the organization from the overall development of the organization. However, the unification of all components and networks of the organization is also a hard one.
There are several types of systems that are followed by organizations. Etihad follows the deterministic system wherein the action of another affects the other and ensures that no error happens in the operation of the organization. In Etihad, the operation works in a routine and predictable manner. All parts of the operation are connected to each other. For instance, the way aircrafts are allowed to fly is the same procedure to allow other aircrafts to land. This means that the operation of Etihad in Dubai describes the state of the system in regions where Etihad aircrafts from Dubai land on.
In the diagram above, we can see how the operation sections are related to each other in a complex network. A single action of A can affect sections such as B and D. In this system, Etihad works to ensure that all elements and components of the operation are taken into account. An error of the airport in Western Europe can affect operations in the Middle East, on the other hand. Deterministic system is opposite to an open system which allows operations to work its own way (Davis & Davis, 1999). For Etihad that works with resources that cost millions, it is necessary to have a predictable pattern of operation than a relaxed one. If Etihad follows the open system, it could have been that operations in the Middle East are allowed to go their way even if the operation already breaches with the operations in Western Europe. As such, open system will work only in organization’s operations that are relaxed.
On the other hand, du Telecom’s operations can be defined as closed and probabilistic. Because the operation is closed to series of programs that the company allows, errors are less likely to happen. However, it is also hard to define strategies and plan of actions when necessary. This lack of flexibility is a problem of the closed system where components are so isolated from each other. In du Telecom, this system works because a single product does not affect the other. Nonetheless, du Telecom’s operations can traced as probabilistic. The probable behavior consumers dictate the operation of the telecommunications company because each person has his or her own preferred services and demands.
Task 4
In reality the lifeblood of the organization is its operations or productions. When goods or services are produced at best, it is easier for the company to sell them in the market; otherwise, it is difficult for the organization to dispense the impact of its operations. In the operations management of the organization, three E’s play important role that should be taken seriously.
- Economy. With the fluctuation of the world economy, it is necessary for the organization to have a clearly set strategic planning and operations management that will address business needs. As the markets are expanding and the goal of the business is to continue gaining in long term, it is very important to perfect the operating environment (Collier & Evans, 2011).
On the other way around, it is important for the business to consider the flow of the economy with regards to how resources should be used. As mentioned earlier, it is vital to consider the cost of production. An organization cannot survive the changing economic climate if it fails to consider the cost of the production or operation in comparison with the flow of finances inward the organization. - Efficiency. The objective of the strategic planning in the operations management is look for a way to minimize the cost of production and ensure that high return on investments. This objective speaks volume of the materials handling of the organization. Efficiency in using resources means the movement of raw materials to finished products. This includes the process of production and the transfer of goods or services to the final customer of the company.
As discussed above in the concept of systems theory, errors and mistakes should be avoided by the operation management. A single mistake may lead to serious financial loss. For instance, a single mistake in the operation of Etihad does not just mean loss of finances, but a loss of lives and the reputation of the airline company. - Effectiveness. The difference between efficiency and effectiveness can be traced to their purpose. The purpose of efficiency is to reduce the cost of production, thereby increasing the profit of the company, while the purpose of effectiveness is the achievement of the goals of quality and performance of the organization (Galloway, 1996). In the production process, there are objectives and goals that are written as guidance of the operation management.
Both effectiveness and efficiency should go together to ensure that the operation achieve the objectives at the most minimal use of resources. Without sacrificing the quality and performance of the operation, it is still possible for the organization to gain profit through reduction of production cost.
However, if we look closely at the cost minimization approach of efficiency and the quality maximization of effectiveness, we will the stark contrast and polarization. Organizations should always look for a way to reduce the cost of the operation because the higher the cost, the lower the rate of ROI. This may even pose a break-even in the financial valuation of revenue and expense, or even loss. However, the same goal of reducing the cost of the production or operation may also result to loss of quality. Cost minimization has two general and possible options: decrease skilled workers or use low-quality raw materials. This means that the effectiveness of achieving the goals of the organization is impossible if cost minimization is being used.
Yet, it must be noted that from time to time, the business operation should jump from these two ships. It would be futile for the organization to have a good and effective operation but without the necessary profit to support for the growth of the company. The very reason of the business which is to gain profit is not anymore achieved. As such, it would be better for the organization to stop the business at all.
Task 5
For the operations management to be considered a successful one, it is necessary to evaluate it through the five performance objectives of operations management, which include: quality, speed, dependability, flexibility, and cost (Barnes, 2008).
Quality
The core of any organization is quality. This is an important element if the organization wants to keep a good reputation in the market because it is hard to please customers. In du Telecom, quality is an important factor in the operations management to ensure the loyalty of its subscribers. This can be traced to the value of signal strength and communication potential of the company. In this type of industry, loyalty of subscribers is very important, and this loyalty can only be built through quality services and performance. In essence, it is necessary for du Telecom to ensure that calls are of high quality and the data package can really respond to the need of its subscribers.
Speed
In the business world, there is no room for slow response. Du Telecom sets itself above than other competitors by ensuring that customers get what they want in the shortest possible time. This would avoid lags in the operation as characterized by data packages and services of the telecom company. By upgrading the system and engineering structure of the company, it would be easier for the company to expand itself and formulate new products and services. Speed of services is a factor to retain customers; today’s consumer behavior is anchored on the word “instant”.
Dependability
Who would love a telecommunication network when it is hard to make a quality call if you are the middle of emergency? Du Telecom understands the value of being a dependable company. It is vital to reshape the mindset of the people so they will know that you are dependable and can be trusted when demands arise. The constant update and upgrade being initiated by the organization fosters improvement of the company’s reputation. Being dependability helps to keep a good network of trusted services that don’t fail, especially when needed most.
Flexibility
A distinct character of the telecommunication industry is the need of being flexible and meeting demands of customers from time to time. In fact, as I have mentioned earlier, du Telecom can’t follow a closed system. It is very important for the organization to formulate new products and services that will improve its standing. Being flexible is an important part of the organization’s success because there are no fixed rules that govern how data or call packages should be provided as long these products and services meet the demand of the consumer.
Cost
When the financial crisis hit the global market, it was hard for businesses to sell expensive products. As a result, products become cheaper and more affordable to mainstream members of the population. To comply with the growing demand for cheaper products, it is necessary for the organization to produce goods and services at lowest price, but with highest possible quality. By producing goods that are cheaper and affordable, the company is assured that it can maintain its position as a strong telecommunication contender.
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