CASE STUDY ORLANDO INTERNATION AIRPORT The reason for existence for any organization is the production of goods and services. Therefore, operations play a central role in any organizations because it produces goods and services. To better understand the meaning of operations we must examine organizations functions and distinguish the relationship between them. All organizations have marketing, accounting & finance and products / services development functions. These functions are known as major which are supported by human resources, purchasing and engineering support functions.
Thus, organization functions have activities which are somewhat interrelated in a way which makes it complicated to identify operation function boundaries. To better understand where operation function starts and where it ends or in other words operations boundaries, we can define it as all excluded activities shared with other function. This definition is knows as narrow because it separates operations function from all other functions which is unrealistic in today’s organizations. The broad definition however, included all activities which had connections with producing goods or services.
This means that marketing, selling and accounting core activities are excluded. After defining operations function and distinguishing its boundaries with other organization’s functions we will need to understand how operations produce goods or services? The answer to this question is that operations produces goods and services by changing the resources condition to something else. Any organization has inputs which are transformed to an output through a process. This transformation is better described as a model which is called the transformation process model.
Within the transformation process model, inputs are reshaped into output through a transformation process. Inputs to any organization are either transformed resources or transforming resources. The transformed resources are material, information and customers. For an example, Orlando international airport processes airplane by refueling them. In other words, airplanes are transformed resources to the airport and they act as an input. They are being cleaned, refueled by ground staff which is in this case the transforming resources. Another example for transformed resources from the case study is passengers’ itinerary information.
This information is being processed from system data to boarding passes. Ticketing staff are the transforming resources because they are acting upon transformed resources. In addition, Orlando’s airport facilities are also transforming resources because they are offering shopping areas and other waiting and boarding facilities which have a direct impact on processing passengers by moving them to other destination. To further examine Orlando’s operation function we will need to look at its micro operations. Orlando’s international airport has a transformation process which is used within its operations.
It contains several units or departments which function as smaller versions of the whole operations. Consequently, Orlando’s international airport has various inputs such as passengers, baggage and airplanes which are transformed within a transformation model. Thus, Orlando’s international airport overall operations is to provide services to passengers to make their travel experience comfortable and relaxing. This overall function is known as macro operation. Within this macro operations function, there are various units which are working as smaller versions of the operations to achieve the overall operations objectives.
These units are named micro operations. For an example, ground staff which load and unload aircraft is a micro operation. In addition, check in counter is another example of micro operation and maintenance unit is also micro operation unit. Macro operation and micro operation are functioning within a process hierarchy. This hierarchy is the structure which defines how those various micro operations are functioning and how they perform their task to achieve the overall goal of the macro operations. Having this hierarchy helps top management to pin point any issues that may affect the operations quality.
This means that top management can easily identify and quickly resolve any problem by examining this hierarchy. All in all, operations add value to any organization by providing a devoted operation function to arrange organization’s resources. Also it provides operations management and managers to implement plans and protect rules and responsibilities. At Orlando’s international airport, operations director has a major role in supervising and coordinating with various departments to support the overall operations function. He is identifying business needs and establishing processes to make the airport functional.
He is also passing decisions and managing resources as well. He is also planning and testing business processes which are necessary to achieve success. Orlando’s international airport is successful because it keeps firm procedures and policies which are being tested and improved to accommodate changes in the business environment. Let’s look at another success story for a local organization which is similar to Orlando’s international airport but from a different industry. The national bank of Kuwait (NBK) had an amazing mile stones at the banking industry. At NBK, everything is very well documented, planned and tested.
The management takes good care of managing operations processes. NBK believes that successful business comes from good planning and firm operations. To do so, NBK was the first bank in Kuwait which established risk department which was responsible for planning the bank’s credit policy and diversifying risk between its investment and loans portfolios. Looking closely at its operations from the risk point of view enabled NBK to survive during the global financial crises. NBK continued offering strong performance since then because it gives great deal to the operations function.
In addition, NBK has the lowest violations to central bank policies because it has a solid internal audit unit which examines transactions and makes sure that they are in accordance with central bank policies. Banks pay a minimum fine of 20,000 KD as a minimum for a single error in a loan contracts as an example. However, NBK knew that paying huge fines will have a negative impact on their profits. Thus, NBK’s management established a firm operational system to ensure that those violations are completely eliminated. Another success story for NBK was during the Iraqi invasion of Kuwait at in 1990.
During the invasion, NBK was fully operational from outside Kuwait. Management crises management plan and the documentation of its processes enabled the bank to operate from its offshore branch in London. This clearly indicates that foundation of NBK was not only its solid financial background. Another important factor was its very well maintained operations and planning. It was almost impossible for NBK to survive during the war if it didn’t have very well governed operations. To sum up, operations role is central to any organization. Success needs financial investment and solid operations.
In other words, operations are the back bone to any business. Without it, organizations will collapse and suffer. They key to have a successful operations is to plan, test and implement processes. Management must always examine any gaps in operations by studying the process hierarchy. In addition, management must invest in its operations to maintain the quality of the good and services and to keep customer satisfaction levels at its maximum. Moreover, good operations mean an opportunity for the business to expand to other territories or even across borders. It is also essential to make the firm operational during crises.