REPORT ON AIRBUS

Systems and Operations Management

SID: 0903007 5/13/2011

Systems and Operations Management

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1. I N T R O D U C T I O N

This report aims at analyzing the troubled history of Airbus A380 and evaluating the roles of systems and operations management within the company, improving the business efficiency through technology, teamwork and organizational functions. So, operations management is the activities, decisions and responsibilities of managing the production and delivery of products. (Slack, N. 2010). In addition, information systems is a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization. (lecture from week 1, 2011).

2. ASSESS THE ROLE OF SYSTEMS AND OPERATIONS MANAGEMENT AT AIRBUS AND ITS INTEGRATION WITHIN THE BUSINESS.

To begin with, taking into consideration the two definitions above, we assume that systems and operations management as a whole is mainly focused on ensuring that all the business operations of a specific organization are efficiently executed, using minimal resources in order to facilitate the realisation of business requirement. (Alan & Jack 2009, p. 45). This type of management strategy aims at strictly following the operations function which compromises all the activities necessary for the day-to-day fulfillment of customer requests. (Slack, N. 2010, p.5). Also, it is quite essential for an effective operation to use the inputtransformation-output process model by changing inputs into outputs. (Slack, N. 2010, p.11). A good example of this process is the Airbus A380 airline which takes the inputs of planes, terminals, passengers, agents etc. It performs operations of booking tickets, moving to the exact destination, flying and entertaining and its outputs include satisfied travelers, on-time and safe delivery to destination and goods moved. (Waters, D. 2002, p.5/6). In other mswithin the organization.

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Source: http://www.nikki_c.dsl.pipex.com/b202index.html

One of the roles of systems and operations management within the Airbus is to provide flexibility in the execution of the business operations. (Chase 2006, p.58). Actually, flexibility is the ability of an organization to meet specific customer requirements. A strategy based on product flexibility customizes products to individual specifications whereas a strategy focusing on volume flexibility responds quickly to changing levels of demand. (Waters, D. 2002, p.53). Flexibility is considerable for business firms in estimating the choice between product flexibility and the volume of production. (Brown & Blackmon 2001). Baring in mind this, it is essential to mention that the Airbus wanted to set up a plan to construct a large aircraft and before that he did not organize an analysis of the requirements of its customer needs. As a result, the organization had to divagate from its initial plan and instead to focus on the design of smaller jumbos. Ultimately, systems and operations management has the specific role of ensuring that an organization unfolds the concept of flexibility during the execution of business processes so as to adapt to future changes, without having the need to get back to the starting point. (Chase 2006). The design of the aircraft is essentially important stage so as to be strongly connected with the customers real needs. Actually, using the design not only makes the new idea become a reality but also allows businesses to set the pace in their markets and even create new ones rather than simply responding to the competition. (Slack, N. 2010, p.114). Furthermore, if an organization wants to develop a new ideology, it is required to have an effective plan of approach from the design phase all the way up to the implementation phase. (Aswathappa 2005). Also, if the implementation is not effective even the most original and brilliant strategy will be rendered totally ineffective. (Slack, N. 2010, p.63). Anyway, if the Airbus wants to remain effectively operational without putting the lives of the travelers at risk, it has to require the development of such a plan of approach. Consequently, the second role of systems and operations management at Airbus is the concept of Management
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coordination and control. This type of management is quite significant for the operations of businesses with the purpose of ensuring that all the organizational aims are effectively and timely realized, without jeopardizing the overall organizational operations. (Alan & Jack 2009). One of the most apparent issues that the Airbus faced is the rising delays during its launch. Eventually, all the delivery delays, the launching delay which lasted for a whole year and lacking the appropriate plan of implementation resulted to the customer dissatisfaction. So, this suffering of production delays is probably an impact of an ineffective systems and operations strategies and practices. It was essential for the Airbus to ensure that there was a systematic methodology in the planning phase of the development of the product. Moreover, the Airbus suffers significant production delays, which are evident by factors such as delivery delays, lack of proper plan of implementation that results into deviation from the original plan of developing large aircrafts and finally launching delay that lasted for approximately a whole year. This resulted to customer dissatisfaction, this is possibly due to ineffective systems and operations management practices. Management coordination and control aims at ensuring there is a systematic methodology towards what the organisation wants to develop. It is a vital component of planning phase, which the Airbus required in order to ensure that the development of their aircraft was successful. Management control and coordination entails the deployment of the various administrative controls and evaluations before a major decision is made at the organisational level (Aswathappa 2005). So, the third role at the Airbus is making sure that it remains competitive in the business industry with the aim of developing a competitive advantage of the firm. (Couprie 2007). Achieving competitive advantage in services requires integration of service marketing with service delivery to meet or exceed customer expectations. So, production delays and unaccomplished expectations affects greatly the way potential customers perceive the effectiveness of a firm. (Chase 2006). That is why, due to ineffective production control, Airbus company should ensure that it improves its operations strategy so as to strengthen its competitiveness in the current airlines industry. Also, the integration between the systems and operations management and the business is of great importance for enhancing the qualitative and performance management. (Checkland & Poulter 2006). Moreover, Airbus should take into consideration the policies and procedures within the execution of the business operations because this may result in the utilization of minimal resources for the development of a profitable product or an asset. In other words, this can be realized through a reduction of the overall production costs. (Couprie 2007).
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3. EXPLAIN HOW THE AIRBUS INFORMATION SYSTEMS AND OPERATIONS MANAGEMENT SHOULD BE UPDATED TO SUPPORT AND IMPROVE THEIR BUSINESS EFFICIENCY.

Information systems that manipulate information so that it can be used in the successful running of an organization are management information systems. (Slack, N. 2011). So, it is essential for Airbus to integrate up-to-date information systems so as to operate efficiently in the current business environment. The role of technology-based information systems starts with data processing with an emphasis on automating current information processes and improved efficiency, continue with management information systems, satisfying requirements for decision support and improved effectiveness, and strategic information systems which amend competitiveness. (Hope, C. 1997). In other words, the operations strategy is key for a service organization due to the vigorous nature of customers and their changing requirements. Anyway, this section is concentrated on how the Airbus operations and information systems should be updated so as to ensure decision supports and improvement in their business efficiency. To begin with, one of the best methods of improvement is through innovation. This means that breakthrough improvement is the required approach for Airbus to enhance operations performance that implies major and radical alteration in the way an operation works which is associated with business process re-engineering (BPR). Eventually the company should focus its reorganization on two essential business processes. On one hand, the first process, called purchasing operations, is essential for coping with everything related to the companys relationships with suppliers. On the other hand, the send one, called customer service operations, is responsible for responding to the needs of their customers. (Slack, N. 2011). These operations concerning the improvement of business efficiency are backed up with three main changes in the systems and operations management at Airbus. These alterations are updating information systems through decision support systems, information technology and the unification of the design and the manufacturing process. Moreover, felicitous decision making is an effective key factor that an organization must integrate with its operations. ( Pilikinton & Meredith, 2009). Alternatively, the Airbus does need to implement Decision Support Systems (DSSs) in its information systems functions so
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as to make reliable decisions in its operations improvement. In other words, a Decision Support system provides crucial information with the direct objective of adding and supporting a business decision-making process. Consequently, this implies the decision being made by hoarding relevant information, processing it and presenting it in an appropriate manner. (Slack, N. 2010). Eventually, a management information system will provide the Airbus with the necessary information and yet, DSSs will analyze the consequences of various decisions by doing a series of what-if calculations, proposing new alternatives, and suggesting the best options. (WaterS, D. 2002). As a result, the Airbus systems and operations management will be updated thanks to the supplement of DSSs which will help the firm to manage risks that may occur through avoiding poor decision-making that might be fatal for the aircraft. All in all, DSSs is beneficial for the company and requires the implementation of proper software applications with the association of providing the company speed and sophistication of decision-making leading to the fulfillment of their aims and increase efficiency. (Slack, N. 2010). Another strategy of updating information systems at the Arbus is through integrating Information Technology (IT) in the business processes so as to increase employee productivity and assist the overall efficiency of the company. (Ahmed 2009). Also, the unification of IT into the information systems and operations management not only will stimulate efficiency but it will also endorse advances in the management of airplane functions and facilitate the company with easy data analysis procedures connected to aircrafts in digital form. (Graham 2008). Actually, IT is any, nearly always, computer-based device, or set of devices, that gathers, manipulates, stores and distributes information. (Slack, N. 2011). So, the deployment of new generation computer architectures will work for the creation of a platform through which the company can automate its crucial production operations, and therefore reduce possible errors that may occur during airplane manufacture. (Checkland & Poulter 2006). Alternatively, the integration of new generation technologies will enhance the flight services performance through the facilitation in the control system of the flight and the processing management of aeronautic data. The supplement of an effective aircraft information system is a considerable strategy in making sure that the execution of the business functions by Airbus is efficient. (Chase 2006). Furthermore, the other strategy that Airbus can utilize in the updating procedure to its systems and operations management is through the unification of the design with the manufacturing process. (Ahmed 2009). Also, the assistance of the process design with the
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manufacturing process should be done in an improved manner through the elimination of temporary and fragmented manufacturing methodologies. (Surhone & Timpledon 2009). This means that using this updating procedure the Airbus will add to the exclusion of manufacturing delays of their aircrafts. Additionally, it is also necessary for Airbus to ensure the elimination of other inefficient structures concerning internal competitions which is a critical issue of maintenance balance in the work between its plants located in German and France. As a result, there were a lot of delays and problems in the manufacturing process. That is why, the Airbus should deal with this obviously crucial problem and also make the same use of its design and software in both manufacturing plants positioned in France and German. Eventually, if Airbus focuses its information systems improvement on dealing with these issues and others that may arise, it will ensure its business efficiency and productivity.

4. . EVALUATE THE ROLE OF SOFT SYSTEMS METHODOLOGY IN ANALYZING AND DEFINING THE BUSINESS REQUIREMENTS OF AIRBUS.

The purpose of this section is to outline the specific role of Soft Systems Methodology (SSM) in analyzing and defining the business requirements of Airbus through CATWOE procedure which is a test of the structure of a company and it is assisted by the root definition. To begin with, C means customer which tends to be the passengers of the Airbus. Also, A is concerned with the actors (those individuals who will do the activities related to customers) who are actually the employees of the company that should do their best to serve the travelers. So, the Airbus should explicitly utilize their information systems operations and the experiences of their staff members. Moving on, T illustrates the transformation process which includes the aim of the company to satisfy the customers requirements and to maximize productivity so as to compete efficiently in the current business environment. Moreover, W highlights the statement of belief within the root definition (RD) which aims at the development of a purposeful activity model. So, in the operational case with the Airbus, it is essential to be mentioned that in order to meet customer needs and to efficiently stay in the marketplace, the Airbus needs to make some changes not only in his information systems
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but also in his operations concerning their service delivery. That is why, Airbus should concentrate on professionally flown airplanes resulting in the requirements of issues ensuring necessary convenience to their travelers. So, one of the solutions is for Airbus to implement pressurized cabin to make the atmosphere in the plane more refreshing and pure and also to add to this it is a good option to provide an entertaining system. Also, the plane design should emphasize on availability of luggage area, comfortable seat designs and other sanitary needs. After all, if the company wants to meet the customer requirements, it should make them a priority for their purposes so as to make the overall design look more attractive to them. Ultimately, there are numerous aircrafts within the airline industry which are ready to be purchased. This means that Airbus should be also more organized and strict to attract customers and make them believe in the superiority of their aircraft designs. Furthermore, E is the environmental constraints externally significant to the firm and therefore, for Airbus these are the time, resources, customer requirements and profit. Also, O is associated with the owner of the company. (Wilson, B. 2001). Considering the analysis above, it is essential for the company to have a rich picture for the situation and actions must be undertaken by the manager. So, full commitment and attention is important for the manager in order to effectively distinguish the difference between management and technical duties so as to develop timely accomplishment of projects and obviate wastage of resources and frustration. Alternatively, the usage of the project plan should be monitored daily by performing check procedures so as to ensure easily the accomplishment of the impacts from possible necessary adjustments made by the manager. (Maynard, 1998). Furthermore, the manager should also concentrate on the companys progress in the operations-driven activities which ensure the achievement of their objectives and aims. Concerning Airbus, these activities are connected with the development and establishment of the Jumbo aircrafts and their consolidation of customer service delivery. In addition, if the manager wants to make his/her adjustments more reliable on the process system, he/she should improve the functions of the individuals within the company through enhancing more open and clear communications. Also, pre-considered and well-organized non-project events such as meetings, vacations etc. should be taken into consideration because of their big influence on the multifarious management schedules. (Maynard, 1998). And finally, it is essential for the manager to have a direct channel for feedbacks made by the team staff which will aid the manager to gather various opinions and make crucial analysis in the overall project.
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5. ANALYZE THE PEOPLE, TECHNOLOGY AND ORGANIZATIONAL ISSUES INVOLVED IN IMPROVING THE OPERATIONS AT AIRBUS.

To begin with, it is important for the company to extend its diversity of activities in the chain of manufacture, design and marketing associated with the involvement of vertical integration. This implies a rational strategic option to be undertaken by Airbus for enlarging their performances, activities and eventually their profits. (Mintzberg & Quinn, 1996). So, vertical integration illustrates the extent to which an operation chooses to win the network of processes that produce a product or service. (Slack, N. 2010). In addition, the company should consider forward vertical integration which secures customers and guarantees product preference, and it can give a firm much greater control over its total marketing effort. (Thompson, J. 2005). Alternatively, this will enable Airbus to reach further the value chain towards the ultimate customer at the end of the chain. In other words, the firm could initiate owning the manufacturing processes of their computerized technologies. Also, the company should take into consideration the backward vertical integration which aims to secure suppliers at a lower cost than competitors but it is crucial to keep pace with technological developments and innovation on the supply side or the competitive advantage may be lost. (Thompson, J. 2005). So, Airbus company can determine to adopt most of their functions connected to their business industry. Also, backward vertical integration provides consecutive and qualitative services which are important for this process. Moreover, vertical integration can implement substantially to profits and on principle it ensures control where there might be required consistency and reliability. (Brandenburger & Stuart, 1996). Continuing, if Airbus wants to apply a relevant integration, it should concentrate also on relationship communications. It means that the company should operate exchanges of information from one source to another and ultimately, it is important to utilize modern communication channels within the company.. In other words, proactive integration includes reciprocal actions between the management and the employees from Germany and France. (Anand & Khanna, 2000). Consequently, many aviation companies relies on being fully integrated

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shifting both backwards and forwards in the value chain. (Besanko, Dranove & Shanley, 1996). Furthermore, it is essential for the company to ensure effective teamwork because this is where staff collectively performs a defined task and have a high degree of discretion over how they actually do the task. (Slack, N. 2010). Alternatively, this is crucial for Airbus because it has two different manufacturing plants in Germany and France and their employees can learn from one another and thus improve their weakness by observations. So, the unification of team building and communication procedures is a reliable strategy which establishes a good working environment as a team associated with pursuing common aims. (Lester, 1998). Ultimately, the relationships and interactions between the employees from Germany and France is important to be accelerated and hence secured. Also, if the teamwork is going to be successful, then consensus should be build and good communication network. That is why, this requires clearly defined goals which must meet the structure of the present operation principles of the individuals. (Amit & Schoemaker, 1993).

6. C O N C L U S I O N

To sum up, it is important for a company to have a strong systems and operations basis so as to have an efficient and effective management within its functions. It is important to build a reliable and close team which can be easily managed and integrate with the organization. So, it is also essential for the company to have considerable resource base which will help it to enhance its capabilities of a good manufacturing company so as to ensure quality service and deliver and meet the customer requirements which is cruacial for remaining competitive in the current business industry.

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REFERENCES
Alan, P & Jack, M 2009. The Evolution of the Intellectual Structure of Operations Management. Journal of Operations Management, vol 27, no. 3, pp. 185-202. Ahmed, A., 2009. Antecedents and Consequence of Strategic Manufacturing Effectiveness: A Conceptual Framework. International Journal of Applied Operations Management, vol 1, no. 2, pp. 8-25. Aswathappa, A., 2005. International business. New Delhi: Tata McGraw-Hill. Amit, R. & Schoemaker P., 1993. Strategic Assets and Organizational Rent. Strategic Management Journal, (14), 33-46. Anand, B.N. & Khanna, T., 2000. Do Firms Learn to Create Value? The Case of Alliances. Strategic Management Journal, (21) 295-315. Brown, S & Blackmon, K., 2001. Operations management: policy, practice and performance improvement. London: Butterworth-Heinemann. Besanko, D., Dranove, D. & Shanley, M., 1996. Economics of Strategy. New York: Wiley. Brandenburger, A.M. & Stuart, H., 1996. Value-Based Business Strategy. Journal of Economics and Management Strategy, 5(1), 5-24. Barney, J., 1986. Firm Resources and Sustained Competitive Advantage. Journal of Management 17(1), 99-120. Chase, R 2006, Operations management for competitive advantage, Volume 2006, Part 2, McGraw-Hill/Irwin, New York. Checkland, P & Poulter, J., 2006, Learning for Action: A short definitive account of SoftSystems Methodology and its use for Practitioners, teachers and Students, Wiley, Chichester. Couprie, D 2007, Soft Systems Methodology, University of Calgary, Calgary.

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Graham, C 2008, Service operations management: improving service delivery, Financial Times/Prentice Hall, New York. Hope, Christine & Muhlemman, Alan, 1997 Service Operations management: Strategy, design and delivery London: Prentice hall Lester, R.K., 1998. The Productive Edge. New York: W.W. Norton & Company. Maynard, M., 1998. The Global Manufacturing Vanguard. New York: Wiley. Mintzberg, H. & Quinn, J.B., 1996. The Strategy Process: Concepts, Contexts, and Cases. 3rd ed. London: Prentice Hall International. Pilikinton, A & Meredith, J 2009, 'The Evolution of the Intellectual Structure of Operations Management', Journal of Operations Management, vol 27, no. 3, pp.185-202. Slack, N. & Chambers, S. & Johnston, R. 2010 Hall: Financial Times Surhone, L & Timpledon, M 2009, Soft Systems Methodology: Soft Systems Methodology, Business Process Modeling, Enterprise Modelling, Hard Systems, List of Thought Processes, Structured Systems Analysis and Design Method, Systems Thinking, Betascript Publishers, London. Thompson, John & Martin, F. 2005 Strategic Management: Awareness & Change 6th ed. Operations Management 6th ed. Prentice

SOUTH-WESTORN: CENGAGE Learning Waters, Donald, 2002 Operations Management: Producing Goods and Services 2nd ed. Prentice Hall: Finacial Times

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