Q4. What are the important long-term issues relevant for managing capacity, revenue, and customer satisfaction for SWA? Explain comprehensively. VIDEO CASEGate Turnaround at Southwest AirlinesRollin King and Herb Kelleher started Southwest Airlines in 1971 with thisidea: if they could take airline passengers where they want to go, on time, atthe lowest possible price, and have a good time while doing it, people wouldlove to fly their airline. The result? No other airline in the industry's history hasenjoyed the customer loyalty and extended profitability for which Southwest isnow famous. The company now flies more than 3,400 times each day to over64 destinations across the United States.There's more to the story, however, than making promises and hopingto fulfill them. A large part of Southwest Airlines' success lies in its abilityto plan long-term capacity to better match demand, as also improving theutilization of its fleet by turning around an aircraft at the gate faster than itscompetitors. Capacity at Southwest is measured in seat-miles, and even asingle minute reduction in aircraft turnaround time system wide means addi-tional seat-miles being added to the available capacity of Southwest Airlines.As soon as an aircraft calls "in range" at one of Southwest's airportlocations, called a station, the local operations manager notifies the groundoperations team so that they can start mobilizing all the parties involved inservicing the aircraft in preparation for its next departure. The grounds opera-tions team consists of a baggage transfer driver who has responsibility forgetting connecting flight bags to their proper planes, a local baggage driverwho moves bags to baggage claim for passenger pick-up, a lavatory truckdriver who handles restroom receptacle drainage, a lead gate agent to handlebaggage carts and track incoming and outgoing bag counts, and a bin agentto manage baggage and cargo inside the plane. The ground operations teamBaggage transfer starts less than 40 seconds after engine shutdown atSouthwest Airlines.knows it must turn the plane around in 25 minutes or less. The clock startswhen the pilot sets the wheel brakes.Pearson Inbound and outbound flights are coordinated by the supervisors be-tween Southwest's 64 airport stations through the company's OperationsTerminal Information System (OTIS). Each local supervisor is able to keeptrack of their flights and manage any delays or problems that may have creptinto the system by keeping in touch with headquarters in Dallas for system-wide issues that may impact a local station, along with using the OTIS infor-mation coming from stations sending flights their way.Just what, exactly, does it take to turn around an aircraft? In-bound flight3155 from Phoenix to Dallas' Love Field is a good example. In Phoenix, theoperations coordinators and ground operations team push back the plane asscheduled at 9:50 A.M. The fiight is scheduled to arrive at 3:35 P.M. in Dallas.The Phoenix team enters into OTIS the information the ground operations teamwill need in Dallas, such as wheelchairs, gate-checked baggage, cargo binlocator data, and other data needed to close out the flight on their end. Thisaction lets the Dallas station know what to expect when the plane lands.In Dallas, the local ground operations coordinators have been monitor-ing all 110 inbound flights and now see Phoenix flight 3155 in the system,scheduled for an on-time arrival. When the pilot calls "in-range" as it nearsDallas, the ground crew prepares for action.As the plane is guided to its "stop mark" at the gate, the lead agent waits forthe captain's signal that the engines have been tumed off and brakes set. Withinjust 10 seconds, the provisioning truck pulls up to open the back door for restock-ing supplies such as drinks and snacks. The waiting fuel truck extends its hoOse tothe underwing connection, and in less than 2 minutes, picks up refueling instuc-tions and starts to load fuel. As soon as the aircraft is in position, the operationsteam steers the jetway into position and locks it against the aircraft. The door isopened, the in-fight crew is greeted, and passengars start to deplane.Outside, less than 40 seconds after engine shutdown, baggage is rol-ing off the plane and gets placed onto the first cart. Any transfer bags get as prizes and profit sharing are given for suCcessful achievement.sent to their next destination, and gate-checked bags are delivered to the topof the jetway stairs for passenger pick-up.While passengers make their way out of the plane, the in-fight arew helpsdean up and prepare the cabin for the next flight. If all goes well, the last pas-senger will leave the plane after only 8 minutes. By this time, passengers waitingto board have already lined up in their designated positions for boarding. Thegate agent confirms that the plane is ready for passenger boarding, and calls forthe first group to tum in their boarding passes and file down the jetway.At the completion of boarding, the operations agent checks the fuel in-voice, cargo bin koading schedule with actual bag counts in their bins fromthe baggage agents, and a lavatory service reCord confirming that cleaninghas taken place. Final paperwork is given to the captain. The door to the air-craft is closed, and the jetway is retracted. Thirty seconds later, the plane ispushed back and the operations agent gives a traditional salute to the captainto send the flight on its way. Total elapsed time: less than 25 minutes.Managing Southwest's capacity has been somewhat simplified by strate-gic decisions made early on in the company's life. First, the company's fleet ofaircraft is all Boeing 737's. This single decision impacts all areas of operations-from crew training to aircraft maintenance. The single-plane configurationalso provides Southwest with crew scheduling flexibility. Since pilots and flightcrews can be deployed across the entire fleet, there are no constraints withregard to training and certification pegged to specific aircraft types.The way Southwest has streamlined its operations for tight turnaroundsmeans it must maintain a high capacity cushion to accommodate variabiityin its daily operations. Anything from weather delays to unexpected mainte-nance issues at the gate can slow down the flow of operations to a crawl.To handle these unplanned but anticipated challenges, Southwest builds intoits schedules enough cushion to manage these delays yet not so much thatemployees and planes are idle. Additionally, the company encourages dis-cussion to keep on top of what's working and where improvements can bemade. If a problem is noted at a downstream station, say bags were not prop-erly loaded, this information quickly travels back up to the originating stationfor correction so that it does not happen again.Even with the tightly managed operations Southwest Airlines enjoys,company executives know that continued improvement is necessary if thecompany is to remain profitable into the future. Company executives knowwhen they have achieved their goals when internal and external metrics arereached. For example, the Department of Transportation (DOT) tracks on-time departures, customer complaints, and mishandled baggage for all air-lines. The company sets targets for achievement on these dimensions andlets employees know on a monthly basis how the company is doing againstthose metrics and the rest of the industry. Regular communication with allemployees is delivered via meetings, posters, and newsletters. Rewards suchAs for the future, Bob Jordan, Southwest's Executive Vice President forStrategy and Planning, puts it this way: "We make money when our planesare in the air, not on the ground. If we can save one minute off every turnsystem-wide, that's like putting five additional planes in the air. If a singleplane generates annual revenue of $25 million, there's $125 million in profitpotential from those time savings."QUESTIONS1. How can capacity and utilization be measured at an airline such asSouthwest Airlines?2. Which factors can adversely impact turn-around times at SouthwestAirlines?3. How does Southwest Airlines know they are achieving their goals?4. What are the important long-term issues relevant for managing

The variable that defines the operational efficiency of a project is called operational metrics. It…

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What are the important long-term issues relevant for managing capacity, revenue, and customer satisfaction for SWA? Explain comprehensively.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

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