The Model
In the efforts of any organization to pursue a business strategy based on a corresponding competitive factors , Slack, Chambers and johnston (2004) had identified five performance objectives that apply to all types of operations, focusing on one or more of these objectives with a possibility of trade-offs between them can provide a source of competitive advantages to the organization, these objectives cost, quality, speed, dependability and flexibility have been identified and set to be a measuring criteria to evaluate the performance of operations.
Figure 1
Where improvement in one required tradeoff in others except when inefficiencies exist know as tradeoff theory (skinner 1969).
On the other hand another categorization based on the organizations attitude towards their operations reinforced with the operations providing a competitive advantage through a strategically managed operations known as the Hayes and wheelwright model (Slack et al, 2009). The Hayes and wheelwright four stage model describe the potential strategic roles that an organization’s function can play within the operations management, it provide a base for understanding the strategic performance and take it to the next level to achieve improvements, the four-stage model evolve from passive which is largely reactive approach to a proactive approach, the stages can be described as below:
Stage one: Internal neutrality classifies the operations management in the attempting phase to reach some minimum standards that have a burden in the delivery of competitive advantage, focusing on avoiding mistakes and narrow that might impact negatively on the organization’s image. Where it becomes impossible to manage the operations strategically, as its operations performance objectives are continuously changing.
Stage two: External neutrality classifies the operations management in a comparison state of its performance with competitors, Operations perform a benchmark their performance to identify the gaps with other competitor’s performance in order to match and emulate other external performance indicators such as JIT (Just In Time), operations in this stage are not aligned to the organization strategy hence they can’t provide the basis for competitive advantage.
Stage three: Internally supportive classifies the operations being delivering while having the objectives to continuously improve, process and resources being developed and supporting the organization to compete, the internally supportive motive comes from an operations strategy that is supportive and linked and derived from the organization strategy, which offers the possibility that operations can provide the means of achieving a competitive advantage.
Stage Four: Externally supportive classifies the operations function as a lead player in the strategy-making and key player in the future competitive success, adapting to market changes is another feature that operations have in this stage, it is relaying on the capabilities being developed in order to compete in the future, it is also extend it impact to the market and redefine the expectation , Though using the operations excellence as the foundation of its business strategy and act as a forefront of developments in best practices hence setting the industry standards.
Figure 2 - Hayes and wheelwright model (Slack et al, 2009)
The practice
Founded by Sir Stelios Haji-Ioannou in 1995 with headquarters in luton, England easyJet has been a show case in low cost airlines, operating two routes in 2005 to 212 routes in 29 countries, easyJet have transformed the airline industry in Europe, progressing from a Stage two as per Hayes and wheelwright model that is external neutrality which is as good as competitors, through modeling on SouthWest airlines 1971 and Ryan air 1985 , adopting the strategy through Competing on cost as an objective performance gaining the market share from established operators like British airways and become the most profitable airlines in Europe, to Stage four externally supportive a word class corporate . Which is operations-led perspective where excellence in operations is used to derive the organization’s strategy, EasyJet’s operations had managed to play a lead role in the strategy making and being a key player in the future competitive, this have been met through flying out to low cost airports which means not the major airports and serving any destination , aircrafts are tightly scheduled , they are allowed only 25 minutes to off-load and load another set of passengers while being punctual to set up expectations and ensure operations excellence to meet these expectations. Staff rostering is a major key in the capabilities to ensure competitive advantage and low cost. easyJet was a pioneer in the use of the internet to both operations advertise and retail tickets, it reduced distribution of operations cost by selling 95 per cent of all the seats over the internet, the online booking system have done a great deal in positioning easy jet in the frontier of the industry by setting the example and industry standards and setting up a position in key markets, such as Gatwick, Milan and Geneva where easyJet is number one in these airports.
Another area that easyJet had redefined the expectation and act as a forefront of developing best practices was in the seating arrangements by not assigning a seats to passengers thus eliminate the unnecessary complexity and speeds up the passenger boarding. In addition easyJet had adopted a No free on –board catering to reduce cost through fewer cabin crew. In the context of being a key player in future competitive success, easyJet had announced the launch of several programs such as credit card program, hotel accommodations and partnerships with Europcar which provided a competitive advantages over competitive. being a leader and setting standards Ryanair followed easyJet by adopting the concept of seat sales meaning all prices are low early on and increase as the departure date approaches. easyJet had pioneered an accurate performance measure for on time which have been measured automatically with the operational control centre to ensure passengers are getting to their destinations on time as a key focus and industry standards making easyJet redefining customer expectations and improvements in the on-time-performance is due to an increased focus on the operations, such as investing in more crew staff.
Conclusion
Operations classification in Hayes and wheelwright evaluated based on performance and contribution to the organization vision, the model defines and shapes the business strategy from a bottom down view , which was clearly seen in the easyJet corporate starting with stage two through adopting and emulating to progress reaching stage four and provide a competitive advantage in addition to setting up industry standards to be followed. easyJet operations strategy was aligned with the organization’s business and corporate strategy , consequently the overall actions and decisions taken within operations function shaped the operations strategy. easyJet operations strategy implementation had addressed the relative priority of the operations performance objectives , the operations function has set the role and articulate the performance objectives it had played a primary part as a source of competitive advantage and low cost objective performance.
References
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