In management, certain specific criteria have to accomplish in order to reach company's ultimate goals in the future. Quality is one of the most crucial requirements where system management can be involved. A quality management system (QMS) process is a small business excellence which forms an component of the quality management system of an organisation. The ISO 9001:2000 standard requires organisations seeking conformity or official certification to define the operations which form the QMS and the collection and interaction of the processes.
As this project requires handling quality and systems in the chosen company, therefore, I have chosen, AirAsia: a private Malaysian low-cost carrier (LCC) company, in order to complete this assignment successfully.
1. 2 About AirAsia
AirAsia is a Malaysian low-cost airline. It operates planned local and international flights which is Asia's major low fare, no frills air travel. AirAsia was a pioneer of low priced flights in Asia. It is also the first flight in the region to implement totally ticket-less travel and unassigned seating.
The airline was founded in 1993 and started procedures on 18 November 1996. It was originally founded by way of a government-owned conglomerate DRB-Hicom. On 2 December 2001, the heavily-indebted airline was purchased by ex - Time Warner executive Tony Fernandes's company Tune Air Sdn. Bhd. for the token amount of 1 ringgit. Fernandes proceeded to engineer a exceptional turnaround, turning a profit in 2002 and launching new routes from its hub in Kuala Lumpur AIRPORT TERMINAL at breakneck acceleration, undercutting former monopoly operator Malaysia Airlines with promotional fares as low as RM1 (US $0. 27).
In 2003, AirAsia opened a second hub at Senai International Airport in Johor Bahru near Singapore and launched its first international airline flight to Bangkok. AirAsia has since began a Thai subsidiary, added Singapore itself to the vacation spot list, and commenced plane tickets to Indonesia. Flights to Macau were only available in June 2004, while flights to Mainland China (Xiamen) and the Philippines (Manila) started in April 2005. Plane tickets to Vietnam and Cambodia implemented later in 2005 also to Brunei and Myanmar in 2006, the second option by Thai AirAsia.
A new budget terminal, the first of its kind in Asia was opened in Kuala Lumpur AIRPORT TERMINAL on 23 March 2006. Built at a price of RM108 million (US $29. 2 million) and spanning some 35, 000 square metres (116, 000 rectangular feet), the reduced Cost Carrier Terminal (LCCT) is the new home for AirAsia Bhd. Originally, the LCCT dealt with 10 million passengers yearly. AirAsia Group is expected to take 18 million travellers in 2007.
AirAsia functions with the world's most affordable product cost of US$0. 023/ASK and a traveler break-even load factor of 52%. It includes hedged 100% of its gas requirements for the next 3 years, achieves an airplane turnaround time of 25 minutes, has a team productivity level that is triple that of Malaysia Airlines and achieves an average aircraft utilisation rate of 13 time every day. AirAsia is currently the largest solitary customer of the Airbus A320. The company has positioned an order of 175 models of the same planes to service its routes and at least 50 of the A320 will be functional by 2013.
AirAsia creates beliefs through the next vision and quest:
AirAsia vision is usually to be the largest low priced airline in Asia and providing the 3 billion people who are currently underserved with poor connectivity and high fares.
AirAsia mission is
To be the best company to help whereby employees are cured as part of a major family
Create a internationally recognized ASEAN brand
To attain the cheapest cost so that everyone can journey with AirAsia
Maintain the best quality product, embracing technology to reduce cost and enhance service levels
Unit 2
(Device 2 covers the task 1 of the project)
2. 1 Operation Management (OM)
Operations Management is at the centre of so many changes affecting the business world. It is important that professionals can analyse the functions of these organisations and suggest and put into action the required changes to meet these difficulties.
2. 1. 1 Defining OM
Operation management (OM) is a couple of activities an organization uses to transforms different types of inputs (recycleables, technology etc. ) into final goods and services. Operation management is strongly linked with quality and production. A firm procedure management system (OMS) typically decides how inputs are transformed into goods and services. A properly designed and monitored operation system performs a major role in identifying quality and efficiency.
Operation Management system is grouped into six framework areas: (i) Product/service design, (ii) product/service process design, (iii) Planning of procedures, (iv) Facilities management and planning, (v) Procedures strategy, (vi) People management.
Operations Management is not only linked with frameworks and systems as businesses management have many issues they must be familiar with and account for as they would have a major effect on modern organisations in the making and service establishments. Some of these challenges are:
Developments in Strategic Management Policies
Global Sourcing/Competition
Total Quality Management Ideas and Qualification Quality
Employee Empowerment etc.
The overall system can be shown as follows:
(Source)
Customers
Information
Services
Technology
(Productivity)
Products
Services
(Process)
Process capital labour
Feedback
Figure 01: Simple OM system
2. 2 The Importance of Procedure Management in AirAsia
The importance of businesses management in AirAsia has increased considerably lately. Significant foreign competition, shorter product and service life-cycles, better-educated and quality-conscious consumers, and the functions of new technology have located increasing pressures on the businesses function to boost output while providing a broader array of high-quality products and services. While using globalization of marketplaces, firms are spotting that the operations function can be used to enhance their position on the market place. Professionals in operations management play a proper and tactical role in gratifying customer needs and making their firms strong international rivals.
2. 3 The Strategic Objectives of AirAsia in Achieving Goals and Objectives
AirAsia Key Strategies
AirAsia makes the reduced fare model possible and create worth through the implementation of the next key strategies:
Safety First Partnering with the world's most renowned maintenance providers and complying with the world airline businesses.
High Aircraft Utilization Implementing the areas fastest turnaround time of them costing only 25 minutes, ensuring lower costs and higher production.
Low Fare, No Frills Providing friends with the choice of customizing services without diminishing on quality and services.
Streamline Operations Making sure that processes are as easy as possible.
Lean Circulation System Offering a wide and innovative range of circulation channels to make booking and exploring easier.
Point to Point Network Applying the point-to-point network keeps procedure simple and lower costs.
Aligned using its mission assertion, AirAsia's business strategy is centred on cost authority. However, its business strategy focuses on specific market segments; price sensitive customers (including first-time fliers) needing short-haul plane tickets. In Porter's generic strategies, AirAsia's business strategy can be categorised into focused cost authority; quadrant 3A in shape 2.
Competitive advantage
Low-cost Differentiation
1. Cost Authority 2. Differentiation
3A. Cost Emphasis 3B. Differentiation Focus
Broad Target
Competitive Scope
Narrow Target
Figure 02: Porter's Common Strategies
AirAsia builds and sustains its competitive advantages by giving services at a cost that is simply lower than challengers' price. Procedure effectiveness and fantastic efficiency are two main characteristics of low priced businesses including AirAsia. The central aim is to accomplish bigger cost advantages than the rivals by continuously searching areas for cost lowering along its value string. By further analysing AirAsia's value chain, one can actually regulate how AirAsia creates cost advantages along its value chain. These cost advantages constitute AirAsia's order success in competing using its rivals as they enable AirAsia to provide the minimum possible price to the purchase price delicate customers. In low-cost carrier (LCC) industry, cost is the competitive main concern and it can determine market position.
In order to fulfil their business mission in business, they will have keen to reaching their goals and targets.
Unit 3
(Unit 3 covers the task 2 of the task)
3. 1 Business Process
There are a few types of resources that are used to manage the business enterprise process, such as people, information, materials, technology and facilities. The main types of resources are physical, individuals, financial and technical; they are classed as the 'four pillars of management'. In M&S business they are using all of the types if resources refer to in the above mentioned, and the following will explain each type.
3. 1. 1 Human being Resources
This part of the business ensures that my company has all the personnel it needs to operate effectively, both centrally at the head office and locally staff training and development, and they are also dependable:
To facilitate worker do it yourself service initiatives,
For recruitment and retention
Disciplinary procedures
Grievance procedures
Health and safety
Keeping one step ahead (possessing a good reputation), i. e. , ensuring guidelines and regulations are adopted.
Developing an organisational culture which really helps to achieve the business's objectives.
Motivating employees to work with their best capacity.
Providing support and training, so as to develop the average person.
Analyse current and future needs for employees.
3. 1. 2 Financial Resources
Financial resources are an essential division and are always helpful in strategy development, because it enables the company to work through how well it is using its resources, and how well the business is undertaking. In M&S, there role is to:
Measure the overall performance of the business.
Take into account about success, gearing, liquidity; to make comparisons with others and risk evaluation etc. . .
Cash move; monitoring income/income, monitoring expenditure
Preparing accounts
Raising finance; shares, loans.
Links with other functional areas.
3. 1. 3 Technological Resources
Technological tool is electronic gateway of technology information and resources for a businesses, it's mostly used when doing market research for a business. It is search engines for researchers, customers, personnel, or the general public, small firms and it is a potential 'website link' to investment opportunities for investors and a means for the general public to learn more about the business enterprise. M&S group fundamentally seeks themselves at:
Technology gain access to, licensing, patents.
Trademarks
Designs
Copyright
Information and communications
Manufacturing maturity and capacity
Research funding
Technology legislation
Innovation potential.
3. 2 AirAsia IT-enabled Resources
AirAsia has fostered a dependency on Internet technology for its operational and proper management, and an online ticket scheduling services to traveller online. The next shows the house webpage of AirAsia. com as the business key channel of marketing and sales.
The followings are few system implementations that AirAsia did in its marketing and sales activities (Produce Management System and Computer Reservation System) as well as operation activity (Business Source Planning System).
3. 2. 1 Produce Management System (YMS)
It is also known as Income Management System; it comprehends, anticipates and reacts to the behavior of customer to increase revenue for the business. This considers the operating costs and aids AirAsia to boost prices and allocate capacity to increase expected earnings. The optimization is performed on two levels in AirAsia:
Seat (Every seats is considered an chance to maximize revenue. Chairs are available at various prices in different points of time. A booking done at a later time will be recharged more than the one done before - for the same seat)
Route (By altering charges for routes/destinations that contain an increased demand when compared to others). The effective method however is to combine these two levels for all those plane tickets, all routes so that both the couch and the path are effectively charged for all your flights.
AirAsia has realized increased earnings (3-4%) for the same amount of aircrafts by firmly taking good thing about the forecast of the high/low demand habits, effectively moving the demand from low period to high period and by charging reduced for past due bookings. Over the past couple of years, AirAsia have actually decreased prices (essential for LCC) as the YMS has given them the screen to increase their earnings by offering higher discounts, more often during off-peak times while bringing up prices only marginally for peak times.
3. 2. 2 Computer Reservation System (CRS)
It is an integrated web-based reservation and inventory system. It includes Internet, call centre, airport departure control and more. It is a primary sales engine motor that effectively reduces the middleman (travel companies) and the sales commissions that need to be paid to them. Centralized customer data is also managed by Open Skies which helps AirAsia to keep track of booking and schedule airfare activities with real-time, on-demand confirming feature. The huge booking information that is provided online to the customers works as a make that brings more customers to use the web site thus reducing the client support costs. An important feature is the fact Open Skies seamlessly combines with the already carried out YMS so the systems can be utilized in unison for costs and revenue maximization (by providing home elevators bookings, schedules etc) and driving a vehicle down the costs of operation at exactly the same time. This CRS allowed AirAsia to add the first solution less travel option and also provides features such as advanced boarding goes by in addition to online booking that empowered the growth of AirAsia as these features drawn customers that didn't have enough time for purchasing seat tickets from counters and to arrive 1 hour early on for securing a seats on the plane. AirAsia have suggested to implement a radio Delivery System (WDS) to broaden it reach via cell phones. With this, prospective customers can book seat tickets via their mobile phones. This is a proper move for expansion as the Asia-Pacific region has a more substantial population of cellular phone users rather than internet users.
3. 2. 3 Enterprise Resource Planning System (ERP)
AirAsia has (May 2005) chosen a full fledged ERP system implemented by Avanade consultants. By employing this offer AirAsia is seeking to successfully maintain process integrity, reduce financial month-end final processing times, and increase reporting and data retrieval functions. (Microsoft Malaysia)
3. 3 Quality Audit (QA)
One of the most crucial objectives of an interior quality audit is measuring the potency of an organization's quality management system (QMS). For this to happen, professional management must first meet its overriding responsibility of building and maintaining something regarding quality coverage, goals, resources, operations and effective performance, including monitoring and measuring the system's efficiency and efficiency.
With esteem to quality, an organization's fundamental responsibility is to determine the management system used to ensure and protect quality. This task begins by determining the procedure applications that'll be part of the quality system. These should be integrated and coordinated to achieve system objectives; i. e. , the functions must be arranged in a process approach and backed with necessary resources. Also, the quality system's performance must be constantly measured for effectiveness and efficiency, and productive improvement constructions must be developed.
Most companies make an effort to set requirements by creating a charter which outlines the business's commitments in serving the clients with quality products and services. Every company should define comprehensive procedures where their products can be supplied consistently to the desired quality level. That's why Quality Audit is important as we mean the procedural control buttons that ensure participants are adequately following a required strategies. Below I have identified the value of quality audit techniques and ways of elevating performance.
3. 3. 1 Defining Quality Audit
Quality Audit (QA) is a way of inspection to evaluate the operation to be able to achieve standard required by any business. Quality Audit is an independent examination of an excellent system It steps the potency of an organisation's quality management system. It is a recorded and organized tool. It should be done routinely by unbiased and certified people.
3. 3. 2 Operating Quality Audit
A Quality Audit strategy affects the whole work lifecycle in AirAsia.
Pre-defined criteria will impact what sort of project is planned
Quality requirements for specific work packages and deliverables will be recognized in advance
Specific techniques will be used in any way stages
Quality Methods must be defined and followed
Completed work and deliverables should be evaluated for conformity.
3. 3. 3 Quality Audit flowchart in AirAsia
AirAsia (AA) is usually keen to develop their business at their desired level. They follow the given QA system.
Improving the audit
competence and
evaluation of
auditors
Authority for the audit
programme
Audit activities
Act
Plan
Check
Implementing interior audit program
scheduling audits
evaluating auditors
selecting audit team
directing audit activities
maintaining records
Establishing
the inside audit program
objectives
responsibilities
resources
procedure and guidance
the inner audit program
monitoring & reviewing
identifying needs for corrective
identifying needs for protection actions
identifying opportunities for improvement
Do
Figure 03: QA Flowchart in AirAsia
3. 3. 4 Sample questionnaire of QA in AirAsia
To ensure ongoing monitoring and development process, AirAsia regulates interior questionnaire system. One of the sample questionnaires is listed below:
Questionnaires-Inter QA (AirAsia)
Office Audited:______________
Date:____/______/______
1.
Employee Name and Era:
2.
Why do you prefer AirAsia?
3.
What services of AirAsia one does prefer and why?
4.
How will you circle AirAsia's on board steward service? (circle)
1. excellent 2. very good 3. good 4. bad 5. dissatisfied
5.
6.
The ticketing prices of the AirAsia is(group)
1. high 2. high 3. right 4. cheap 5. cheaper.
The characteristics of the assistance are. (group)
1. very high 2. high 3. right 4. cheap 5. cheaper.
7.
What service of AirAsia that you think have to be improved and just why?
8.
Do you think AirAsia should increase their price and at the same time maintain their quality? If Yes, why?
9. AirAsia acceptance to customers(group)
1. high 2. suitable 3. low 4. very low
10.
Do you think AirAsia should increase their aviation business outside Asia?
11.
Your valuable responses on AirAsia services(if any):
Thank you for your kind response
Figure 04: Sample Questionnaire of AirAsia's QA
Embed Quality Audit (QA) System in AirAsia
To reach their eye-sight, AirAsia must embed Quality Audit System with a careful attention. AirAsia audit service offers 'ticketing and services' on lowest requirements and require clear, regular reporting from AirAsia's office buildings on areas such as gross annual accounts (including performance reviews), data audit, internal audit, and risk management. During QA, AirAsia follows the following steps to do it.
Objectives
Audit scope
Identification of audit team leader and members
Date and place where the on-site audit activities were conducted
Audit standards and findings
Conclusions
Unit 4
(Unit 4 covers the task 3 of the task)
4. 1 Monitor Systems and Issues of Business Strategy in AirAsia
By monitoring system of AirAsia, they have some certain challenges that can hamper their business over time. The major difficulties are given below:
Major Challenges
Increasing competition because of increasing number of low cost airline competitors, and intense competition contrary to the large or traditional airline companies
Customer decrease because of poor economy
Rising of the gasoline prices
Higher labour cost
Inadequate infrastructure
Route and airfare utilization
Safety and security issues of plane crash or being attacked
Not only AirAsia, observation says that lots of airline companies are facing obstacles in aviation business. Therefore, AirAsia's strategic business development office are continuously working out their particular issues to minimize risks.
4. 2 Referrals on Business Improvement
By applying the next business strategies, AirAsia can improve their business in aviation industry in Asia region.
1. Customer Romantic relationship Management (CRM)
Customer Romance Management (CRM) program will be one of the area of strategic IT execution that AirAsia can focus to achieve high worth to both shareholders and customers.
In permanent, customer relationships should be fostered for AirAsia to maintain competitive gain and profitability. When planning and employing CRM program, management is preferred the following solutions:
Customer segmentation - mileage-based segmentation is insufficient, rather should focused on value-based and needs-based solutions can guide investment decisions and drive greater insight into the needs of quality value customers.
CRM initiative development - to differentiate from other competition, AirAsia should not adopt the "fast follower" approach to CRM effort development, i. e. learning from other competition' approach (e. g. installing kiosks for fast check-in). AirAsia should put into practice CRM program in favour of buying initiatives with a higher return, which respond to the desires and needs of their own customers
Organizational design and management - AirAsia needs to train the employees, empowering them with a total view of the customer and evidently articulating the employee's role in the CRM strategy.
2. By applying PDCA cycle
W. E. Deming's PDCA routine (or Deming steering wheel) is the well-known basis of constant improvement.
P = Plan. Collect and analyse data of current methods or the challenge areas to be able to formulate a plan of actions what exactly are designed to improve performance.
D = DO. Put into action improvement plan. In this level the action plan is tried out in the procedure.
C = Check. Measure and confirm results
A = Work. Standardise and find out lessons. Standardise if it's been successful, if not, learn what you can from trial.
This circuit never stops. When the last stage has ended, the new circuit begins again.
As part of my recommendation on business improvement of AirAsia, I would suggest the mentioned systems.
4. 3 Conclusion
AirAsia is one of the leading LCC airlines in south-asia region. AirAsia must operate a long-term performance analysis to fully capture and record any new knowledge, analyse real benefits and losses, analyse existing problems and choice solutions so that in future company can face any sort of challenges. With reference to this assignment, all the relevant important information has been inserted and accomplished extremely.
