Operations Management Essay Example | Topics and Well Written Essays - 1500 words - 3

Operations Management - Essay Example In opposite accord, British Airways is a full service airline model able to provide higher cost ticketing to consumers due to the strength of its brand under a premiumisation model in marketing. British Airways is able to maintain its competitive edge through operational structuring with emphasis on technology support, dependability, and high quality especially as it pertains to employee engagement with revenue-building consumers. Both airlines have significantly different operational strategies, giving each a unique competitive advantage stemming from operational strategy development and implementation. This report illustrates the unique strategic operational return on investments for both companies that continue to sustain these airline models. The operational strategies of Ryanair and BA For companies that maintain a broad and diverse supply chain network in order to provide products and services, such as British Airways, holding costs for warehousing and inventory management are significant. These costs include space, labour support, utilities, and even taxation (Heizer and Render 2004). For diverse procurement models, these costs are unavoidable as facility management requires expenditures for support labour and technology support on receivables and deliverables (Heizer and Render 2004). ... -fluctuating consumer demand in this industry that affect strategic planning and operational procurement (British Airways 2010; Anderson and Day 2009). Coupled with vendor-supplied materials needed to carry out its full-service model, it was no longer efficient for British Airways to maintain decentralised procurement strategies with products deliverable from over 80 different countries. The costs of procurement and warehousing were adding unavoidable, variable costs into the business model that continued to seize competitive cost advantages from British Airways. Low-cost, no-frills carriers were emerging in multiple consumer sectors that were able to negate high inventory holding costs and distribution costs associated with a diverse supply chain network. As it pertains to the costs of procurement, British Airways faced a trade-off situation: Continue to absorb costs by operating under a decentralised supply chain strategy to avoid change or to sustain and allocate capital resources to centralise supply chain strategies and eliminate redundancies. There were multitudes of opportunity costs associated with the existing supply network, therefore the business determined that implementation of appropriate procurement planning software (in this case SAP) were necessary to radically alter the supply network. The business changed its procurement strategy to include development of more strategic alliances with vendors, including involving suppliers during the early stages of product and service development, taking advantage of supplier expertise to assist in creating a mutually-rewarding procurement network. These are significantly important operational strategies for cost controls in supply chain strategies (Copacino 1996; Ragatz 1997). British Airways began to benchmark