Operations Management of Airbus Company - Essay Example

?Operations Management Part Issues That Requires Investigation From the case study, Airbus continued with its production activities even when the company did not have orders leading to production of white tail jets. On the other hand, its rival company Boeing produced aircrafts according to confirmed orders. Considering this scenario Airbus is considering taking production approach similar to the ones applied by Boeing. For the company to take appropriate measure in this endeavor it need to consider the following factors. Cancellation of orders or running out of business by airline companies is the main causes of production of white tail jets. As an Airbus consultant, I will begin by investigating the causes and nature of cancellation of orders or running out of business by airliners in a long-term perspective. Secondly, I need to investigate market trends by analyzing possible demands in the long-term. Finally, Airbus is facing competition from other competitors such as Boeing and McDonnell Douglas Company. I would therefore investigate the implication of white tailed jet as a long-term competition strategy. Part 2; Objectives that would assist in evaluation of recommendations These issues will require objectives that can be evaluated in order to determine their suitability of application in Airbus. Firstly, Airbus needs to determine the future demand resulting from the anticipated growth of the airline industry. The company also requires knowing the possibility of acquiring new customers from existing airliners and from possible new entrants. Thirdly, Airbus needs to evaluate possible competitive advantage that may result from the production of white tail jets. Finally, Airbus would require to measure the degree at which market trend is shifting from making of orders to buying of readymade aircrafts. Part 3; Operation management techniques Qualitative and quantitative techniques as applied in operational management will be useful in analyzing the stated important issues. Quantitative techniques are important technique in operation management since they enable operations managers to determine future anticipations in terms of quantity or numbers. This factor makes the technique to have wide application in forecasting of expected operation methods and procedures. The technique relies on data and models and it would be appropriate for analyzing Airbus case. Unlike quantitative techniques, qualitative techniques are more subjective, this makes the technique fit perfectly in the given scenario. Qualitative techniques forecasts future prospect of a company based on answers to a series of question related to the management of a company (Slack, & Chambers, 2008). Using quantitative techniques it is possible to determine the time duration within which Airbus should continue producing white tailed aircrafts. Firstly, considering the rate at which airliners across the globe are grounding their planes from lack of business, Airbus is likely to have a continued production of white tailed jets. Although the move has some competitive advantage over its rival plane manufacture Boeing, the company needs to consider any long-term threats that may result from the move. Currently Boeing is involved in intensive management program to ensure that any delays and order cancellation do not turn out as a white tailed jet. Airbus need to evaluate possible risks that rival company is avoiding by taking the current moves. Boeing main customer Lufthansa has ground A300-600s and a similar move is likely to apply to A340-300 series. Other companies such as Quanta airlines are considering taking mergers and this will cause a reduction in the number of orders they make. This implies that the company is anticipating a sharp fall in the demand of aircrafts making it to take cautions in its manufacturing plans. Airbus also needs to determine the duration within which it should continue with production of white tail aircrafts considering the anticipated demands due to a shortfall in supply. Although airline companies are currently grounding their planes to cut their operational cost, the move is temporally. The trend is likely to reverse with the expected economic boom implying that Airbus would be able to handle its orders and even take advantage of Boeing’s market. The company knows the reasons that made Boeing to produce aircraft based on confirmed orders. However, Airbus may require applying the information in its strategic management. The company needs to determine how Boeing arrived at the decision and why the decision is important. Airbus also needs to know why it should continue or stop the production of white tailed jets. The company also needs to know how it should stop this production this requires identifying methods and measure that would enable the company to cut the production within the minimal period economically. In the qualitative and quantitative analysis it was assumed that the data given in the case study is periodical (Slack, & Chambers, 2008). The analysis also assumes that any results or implications generated by the models are accurate within a short time interval. Part 4; Lessons Learnt From Part Three Analysis From the analysis, I have learnt that operation strategies of a rival company provide an excellent ground that a company can use to learn appropriate strategies. This implies that a company should first consider lessons from a rival company before conducting pilot projects. From the analysis, Airbus should determine the benefits that might arise from the measures taken by the rival company Boeing. I have also learnt that there is a possibility of a company benefiting indirectly from a measure taken by its rivals. A company should identify such moves and decide how to take advantage of the situation. This is analogous to the production mode undertaken by the two companies. Boeing’s production is order-based while Airbus mode of production has resulted in the production of white tailed aircrafts. In such a scenario, Airbus should take advantage of the anticipated increase in aircraft demand. These lessons would be useful in the determination of advantages and disadvantages of Airbus undertaking a sole venture by creating a super Jumbo. Part 5; Future analysis prospects The analysis carried out in part three is important to both companies. However, the analysis requires supportive information to increase its relevance. Airbus Company will also require information on possible threat from new entrant resulting from the measures taken by the two companies. The next possible analysis will be concerned with the threat posed by new entrants and the likelihood of having new entrants into the industry. References Slack, N. & Chambers, S. (2008). Operations Management. New Jersey: Prentice Hall. Read More