The increase in a wide range of benefits accrued by Capacity planning has made the process necessary for many organizations over the past few years. Capacity planning can be defined as the process through which company resources are aligned strategically with the aim of meeting the current market demands and at the same time reach the future capacity of the organization. This method of management forges strategic use of resources by analyzing the current market dynamics and projecting production demands (Kukalis, 2011). The process involves planning of the company resources, supplies, and facilities for the company to maximize both long-term and short-term productivity. Such resources include people and time. Short-term capacity planning involves schedules and labor shifts which deal with any unexpected production shifts. Long-term capacity planning strategizes a company’s production facilities differently by accessing short-term changes, critical decisions and addressing the trends that are in the market. A firm is, therefore, better placed to cope with any demand changes once it reconstructs these production sectors. Tsai & Kuo (2004) goes ahead to note that the firm ensures that it remains on track regardless of any occurring shifts in the economy.
Capacity and utilization in the Southwest Airlines are measured first through the seat-miles. The available number of seat miles determines the number of miles travelled and the seats available. This, for a long time has driven the targets in turnaround from sixty minutes to twenty five minutes. Any changes in turn around are reflective of the available seat miles consequently helping to predict and monitor progress (Babbar & Koufteros, 2008). For instance, reduced turnaround means high utilization of the aircraft and less seats of which the seats can be added to accommodate the passengers.
Turnaround time is affected by weather delays especially because poor weather may cause delayed taking off or even cancellation of flights where the weather is not workable. On a foggy day, flights have to be delayed until it is safe to have passengers on board. Information Technology (IT) outage under technical issues affects the efficiency and turnaround of the airline a big deal (Hallowell, 2006).
For this business to work, complicated software such as the OpsSuite is used to monitor airlines, the flow of large amounts of data, inspection, and tracking of luggage. Turnaround time is significantly affected by IT outage occurrences. Managing security is essential for Southwest and Traveler Airlines; on a daily basis, millions of travelers are served. Turnaround time can be increased if the process is not planned and streamlined correctly due to increased time on security checks. This implicates negative performance for the airline as the incidences of IT outage adversely affect turnaround time (Gittell, 2003).
There are certain parameters for evaluating the success of this flight company. These indexes are placed on certain sectors like the revenue generated, the customer numbers and from the feedback of its passengers. In terms of customer loyalty and numbers, in 2003, the airline was ranked fourth largest in the number of passengers that used the airline. By monitoring this trend, Southwest Airline is able to measure how far from its goals it is treading. The other was to assess goal achievement through customer loyalty. If based on the adjustments in security measures, time of flight and so forth, customers show loyalty, it means that the airline is doing well in customer satisfaction. The feedback gathered by customers is quite critical. This can be found on online sites and even by soliciting it while passengers book their flights. Honest feedback informs of the outcomes to assess how strategies are leading to competitive advantage (Babbar & Koufteros, 2008).
The Southwest Airline has been vigilant on its growing clientele and for this reason, the company has conducted capacity planning to cater for the large market. However, in expanding its capacity along with the capacity revenue, issues such as hiring skilled personnel and acquiring new models of planes are critical.
The company needs to ensure that expertise is on the ground managing changes effectively and dealing with the installation of new equipment and different models. The success in these areas determines the capacity revenue and outcomes at large. The issue with customer satisfaction is decisions regarding reliability and pricing. In making such moves, the airline has to consider trends in the airline industry and the fair trade-offs that would propel the airline forward. The profitability trends for Southwest are total results of proper management, innovation and customer centered service. At the backdrop of all these, the short-term achievements are the basis of the long-term achievements (Hallowell, 2006).
In conclusion, the Southwest Airline case study is quite illustrative of capacity planning and customer satisfaction. Handling capacity planning is driven by the key issues like cost-effectiveness of providing low-cost, reliable and quality services. While these objectives have to be achieved, to strike a balance between such issues, the process ought to be very strategic. Incidences like cancelled flights that demand client compensation have to be adhered to may pronounce unexpected costs that cause a pinch but still have to be complied with. Inevitable incidences such as these, are to be handled keenly and objectively. More than this, customer satisfaction is by far the most rewarding element for the Southwest Airline. For this particular company, delivering low-cost services, safe flights and achieving nothing by excellent quality service had driven both the short-term and long-term outcomes of capacity planning. Besides all these, setting of targets to evaluate achievements in the internal departments forges the way for informed capacity planning.
Babbar, S., & Koufteros, X. (2008). The human element in airline service quality: contact personnel and the customer. International Journal of Operations & Production Management, 28(9), 804-830.
Gittell, J. H. (2003). The Southwest Airlines way: Using the power of relationships to achieve high performance. New York: McGraw-Hill.
Hallowell, R. (2006). Southwest Airlines: A case study linking employee needs satisfaction and organizational capabilities to competitive advantage. Human Resource Management, 35(4), 513-534.
Kukalis, S. (2011). Determinants of strategic planning systems in large organizations: a contingency approach. Journal of Management Studies, 28(2), 143-160.
Tsai, W. H., & Kuo, L. (2004). Operating costs and capacity in the airline industry. Journal of air transport management, 10(4), 269-275.