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southwest airlines case study

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1. Southwest Airlines’ operations are to a great extent dependent on parts inventory management. The airlines has to
bear a significant cost whenever it has to ground a flight if it has run out of a spare part. Not just in Airlines, but in
many other industries also, it has been observed that the non-availability of spare parts for repair when they are
required contributes to at least fifty percent of the total down time. (Productivity, n.d.)The same is the case with
Southwest Airlines which is known for efficient customer service. An efficient inventory management is important
for the airlines for minimal delay in getting passengers to their destinations. Maintenance team should remain
ready with spare parts whenever they are required. Reduced groundings were also essential for minimizing the
delay. Thus, we see that parts inventory management has a very important role to play in the operation of the
airlines. It will also reduce the delays in flights and improve the company’s bottom line. The company’s flight
operations as well as its supply chain and maintenance department will also feel the impact significantly.
2. All the three factors including management, organization and technology were responsible for the Southwest’s
problems with inventory management. The information was neither properly organized nor visible and therefore,
not usable when required either. The information systems were not integrated and the managers had the data stored
on their systems which could not be available readily for use. At a given time it was quite difficult to acquire the
required data. Thus the data was available but the organization had not properly managed it since the right
technology for managing it was not available.
3. The demand planner by i2 significantly improved business operations at southwest by improving the availability
and visibility of data. With the help of the planners it became easier to differentiate between parts on t hebasis of
their criticality. With the service parts planner it was now easier to plan and have the right spare parts stored at the
right place so that they are available at the right time. With the help of the software by i2 it was also easier to have
the right mix of spare parts at the right places. It could easily forecast which part was essential to have at which
place to minimize customer service costs. While managing spare parts there is a need for systematic action.
(Productivity, n.d.) It was made possible by the software planners provided by i2.
4. The planners had made it easier for the managers at southwest to take important decisions. First of all it was easier
to differentiate between spare parts on the basis of their criticality. Now it was easier for managers to decide which
parts were most critical to have in times of requirement. It was a significant decision since the most important thing
for the airlines was to have the critical parts ready whenever they were required. Another important decision
facilitated by the i2 software was deciding the right mix of spare parts for any location. With the right information
in place, the software made it easier to decide which parts were most likely to be needed at a location. Taken

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together these things made decision making easier and facilitated maintenance for southwest.
References:
SPARE PARTS MANAGEMENT (n.d.). In Productivity. Retrieved October 13, 2013, from
http://www.productivity.in/knowledgebase/Plant%20Engineering/g.%20Spare%20Parts
%20Management.pdf

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