2. Introduction
• As stated in the Telegraph news of United
Kingdom, after number of disappointments of
passengers, the management of BA revealed a
video where it was mentioned that global IT failure
was down due to problem of power supply.
• British airway were unable to provide
information to passengers and their official
application went down resulting in total chaos
and lost luggage’s
• The chaos happened when company’s new IT
system crashed worldwide for the sixth time in
the year.
3. Main reason for the cancelation of flights
IT FAILURES
OUTSOURCING JOBS
TO INDIA
POWER SURGE The pilots revealed to
the passengers that the
reason behind
cancellation of flights
was computer glitch.
4. WHAT OPERATIONAL MANAGEMENT PRACTICES COULD BE IN
PLACETO AVOIDTHE SAME PROBLEM IN FUTURE ?
Inputs could be used effectively for
better outputs
Effectiveness vs efficiency
Their strategy needs to be linked
with their management practices
5. CAPACITY MANAGEMENT
• British Airways has to make best use of their
existing capacity
• The generic strategy of capacity management
being followed by BA is LEVEL CAPACITY , that is
keeping production and service capacity at same
level irrespective of demand.
• The demand varies overtime and BA is not keeping
check on capacity because it is constant, and is
not commiserating with demand.
• They aren’t able to anticipate demand changes
which is hitting them hard
7. CHALLENGES FACED BY BA IN REGARD TO CAPACITY MANAGEMENT
• They aren’t able to meet the demand
• Weak control of capacity of IT-servers,
luggage and passengers terminal
• Most of the organizational systems
looks obsolete and do not meet modern
requirements for Air-transportation
AS A RESULT
Huge queues, Delayed and canceled
flights, inconveniences with the
transportation of luggage for passengers.
Lack of resources to provide comfort to
waiting passenger
8. BA’s Current operation management
practices in relation to its strategic aims
• Ba has been cutting down on cost by outsourcing to reduce
cost
• It has an Adverse affect on quality and services
• A firm can loose its competitive advantage by cutting down
on cost
• Their strategic aims do not match with their OP practices
• they are losing their customer base because of outsourcing
their major operations
9. Assessing BA on the Hayes and Wheelwright
model
Neutral Supportive
Internally Stage 1: internally neutral
Objective should be to
minimise the overall impact of
operations
Stage 3: internally supportive
Objective should provide a
credible support for
maintaining a business strategy
Externally Stage 2: Externally neutral
Objective is for operations in
order to help the organization
in competing with its
competitors
Stage 4: Externally supportive
Objective is for operations in
order to provide a uniform
source of competitive
advantage
10. STEPS TO IMPROVE QUALITY
• Special IT team should be recruited
• The light status should be verified
• Additional back up plan needed
• SAP has been the biggest service provider of airline ERP
systems with at-least 120 airlines customers
• British airways has also resorted to SAP now and now they
need to test this system on regular basis because this glitch
can happen again.
• They need to invest in their staff. Proper training is
supposed to be done.
11. Two challenges for them in implementing
organisation wide information systems (ERP).
What is ERP ?
Procedure by which an organisation manages and
incorporates the vital parts of its functions
Lack of proper analysis
• improper analysis leads to non availability of certain
functionalities
• This is effecting the operations in the long run and reduces
profits and productivity
Appropriate Training
• Training for ERP system is quite difficult on comparison to any
other information system
• The ERP has not been used wisely in BA, there was improper
usage of the information system
•
12. ERP implementation problems
SELECTION OF RIGHT ERP
• BA is operating on such a wide scale worldwide, the selection of a right fit
becomes essential to the success of the working of the software.
• Also, having an extremely clear picture of how their business should look after
the implementation of the ERP software, helps in the selection procedure.
• When BA thought of implementing ERP on a worldwide scale, the first
question that must have come to the manager’s mind must be what type, size
and scope of system they need and where will they find an ideal and tailor-
made solution to their problems among the various options available in the
market.
13. ERP implementation problems
COST RELATED ISSUES
• To save money, BA overloaded several features
like online check-inn, status, booking meals etc in
one ERP which lead to system failure.
• The vendor is failing to customize ERP according
to the BA, because this is not the first time BA
went through this glitch
• BA needs an ERP with super processing speed and
high storage because this model is not
proportional with its capacity
14. SHARING OF INFORMATION ACROSS
STAKEHOLDER GROUPS
Sharing information between managers and staff
(Suppliers of IT service)
Owners/Investors of the company and managers
Sharing of information between passengers and managers
15. References
• Anon, (2017). [online] Available at: http://www.kreyonsystems.com/Blog/supply-chain-
management-for-aviation-industry/ [Accessed 14 Nov. 2017].
• Anon, (2017). [online] Available at: https://www3.technologyevaluation.com/research/article/the
5-biggest-challenges-when-implementing-erp-for-the-first-time.html [Accessed 14 Nov. 2017].
• Canaday (2017). Enterprise Resource Planning (ERP) Systems With Aircraft MRO Capabilities.
[online] Aviationweek.com. Available at: http://aviationweek.com/awin/enterprise-resource-
planning-erp-systems-aircraft-mro-capabilities [Accessed 14 Nov. 2017].
• Collinson, P. (2017). British Airways should come clean about computer chaos. [online] the
Guardian. Available at: https://www.theguardian.com/business/2017/may/30/british-airways-
should-come-clean-about-computer-chaos [Accessed 14 Nov. 2017].
• Johnston, C. (2017). British Airways cancels all flights from Gatwick and Heathrow due to IT
failure. [online] the Guardian. Available at:
https://www.theguardian.com/world/2017/may/27/british-airways-system-problem-delays-
heathrow [Accessed 14 Nov. 2017].
• Reporters, T. (2017). British Airways chaos: All flights cancelled at Heathrow and Gatwick after
global computer failure. [online] The Telegraph. Available at:
http://www.telegraph.co.uk/news/2017/05/27/british-airways-chaos-computer-systems-crash-
across-world-causing/ [Accessed 14 Nov. 2017].
Editor's Notes
As stated in the Telegraph news of United Kingdom, after number of disappointments of passengers, the management of BA revealed a video where it was mentioned that global IT failure was down due to problem of power supply. The pilots revealed to the passengers that the reason behind cancellation of flights was computer glitch. As mentions by the Telegraph operators, the reason behind cancellation of flights was the massive global IT failure within the flight operational system. British airway inability to provide information to passengers resulted in cancelled flights and lost luggage. The chaos happened just after 11am on Saturday when the company's unreliable new IT system crashed worldwide for the sixth time in a year.
As stated in the articles and after analyzing the case. British airways has several IT failures which were caused due to several reasons according to the CEO, it was a power surge. Some say it was a major IT breakdown IN THE FLIGHT OPERATING system and lastly it was due to outsourcing several jobs in INDIA. It was also mentioned in the report that the technical team of BA were tirelessly working to get the systems back up and running.
Inputs could be used effectively for better outputs because being the inputs used they are not providing sufficient outputs and that could be achieved by altering their Transformation process model. Concluding that, in order to gain efficiency they ended up losing effectiveness.
They need to alter the transformation model because it is a service based industry and they rely heavily on customer satisfaction but cutting down cost on food and beverages will not commensurate with customer’s in long run.
Concluding that, in order to gain efficiency they ended up altering the IT system which is one of the most important aspect of airlines industry. Rather than altering this aspect, they can make few changes in some other aspect in order to gain efficiency because by doing this, they lost effectiveness as well.
. British airways has not been making best use of their capacity. Their capacity is not changing according to the demand.
It’s a dynamic environment and demand keeps on changing. To keep the right check with capacity management BA is supposed to alter according to the change in demand.
They have been following generic strategy of level capacity that is keeping production and service capacity at same level irrespective of demand.
In the end demand is varying and is not commiserating with demand
As a result they failed for the 4th time in a row because they failed to anticipate demand changes.
While following these approach, the management of the organization BA faced many dissatisfaction of passengers. Huge number of passengers were impacted by this cancellation of flights. This directly impacted the overall brand image of the organization. The crash of computer system affected the overall booking system, mobile phone apps, baggage handling, and check in desks. This leaded the passengers to face long queues and create confusions in the airports while planes were on runways. These were the significant challenges faced by the organization BA.
Following the capacity management, the company creates too many difficulties for itself. The main challenge lies in the fact that the volumes of transportation of the company do not allow the assumption of slightest delay or disruptions as this will have colossal consequences. Another difficulty is that the transport nodes and their software does not correspond to the level of the companies development. Obviously, a company of such scale should proceed to apply a professional approach to the capacity management of transport nodes and transportation of such scales.
Business airways has always strategized to invest in those prospects which are already showing some improvement. They outsourced major IT related services in India because the operational costs out there in India are comparatively cheaper as compared to other countries. In order to reduce cost their quality and services mark is deteorating on a very fast pace. Having said that, they are also losing its competitive advantage by cutting down on costs.
Based on the reports of issues in operations management in IT department, it can easily be analysed that current operations management practices are not aligned with its overall strategic aims.
The steps that the organization BA need to take in order to gain customers and to maintain quality of product and service are as follows:
Step 1: rechecking of all the operating systems
Step 2: implementing a backup team for backup solutions
Step 3: attaining the demands of customers
Step 4: providing an advanced security to its operating systems
Step 5: implementing ERP system
In order to sort out this issue, the operations management of the organization BA can recruit a special IT team who would verify the status of flights regarding its operating functions. This would directly lead the organization in resisting its IT system from any kind of issues. Extra backup plan need to be implemented by the organization in order to tackle similar situations in future. SAP has been the biggest service service provider of ERP system with more than 120 airlines customers base.
British airways has now resorted to SAP but they need to test this system on regular basis because this is not the first time, this glitch happened. Concluding that, they have to hire trained staff who knows how to deal with software's and ERP systems and how to react in such complex situations.
Two major challenges faced by the organization BA in implementing wide information system are as follows:
Lack of proper analysis- improper analysis would directly lead the organization BA to attain non availability of certain essential functionalities. This challenge can easily be addressed by obtaining any improper outcome.
Appropriate training is compulsory- training for using the ERP system is quite difficult on comparison to any other information systems. This challenge can easily be identified by improper usage of this information system.
Training is vital before implementation as well as after it. Employees should be comfortable and well acquainted with the entire software system or else it will backfire and will lead to redundant work and operational as well as functional inefficiencies. No ERP software in the world can run by itself. We need people to run the software who need to be trained. Not just the staff, the end users also have to be taught how to use the new programs and apps that have been designed to make things more convenient for them. Employees who are trained should know the difference between content and context. For example, and employee attends a new training program and by the end of it he knows everything about the software, how it works, what all it has etc. but he is not aware of its usage and application. For example, in this particular case, BA has automatic check in machines, so the staff on ground as well as the passenger must be well versed with the interface in order to use it. The ground staff must be capable enough to help the passengers in time of need and the passengers also must be given proper instructions about its usage.
1.If there is a direct relationship between managers and staff there will be faster response to IT breakdowns. Problems will be met with a solution in no time.
2.Sharing of information between investors and managers will contribute to investing in increasing the capacity of transport hubs
3.It can also contribute to the timely admission of passengers and reduce losses from unexpected events which would later create frustration.
Sharing of information with the owner regarding any issues faced by the organization will directly lead the management department of the organization BA to take an effective and efficient decision. Some determined information also need to be shared to the passengers in case of any issues within the organization.
