- Read the scenario description, goal, and learning objectives below.
- Notice that under “Simulation”, there is an image of each executive team member, with information next to them that can be accessed through reading text or listening to an audio file. For each member of the executive team, read or listen to their thoughts and dialogue in the meeting about the scenario.
- After learning about each executive team member’s thoughts and dialogue, see if you can answer the essay question at the bottom of the page.
- After answering the essay question, use the menu at the left to navigate to Scenario #2
This scenario centers around an Executive Team meeting that takes place in March 2008. At the beginning of the meeting, Ms. Saver puts a slide up for everyone to see. It includes the following: 1) current data about various BA metrics, and 2) two proposed goals for changing these metrics over the next year. One goal proposed is more conservative (“low goal”), and one is more ambitious (“high goal”). See them depicted in the image below.
Ms. Saver wants the group to discuss the following:
- Which of these metrics should we target improving over the next fiscal year, in 2009?
- For those that we target, what should be the new goal, and how should we work to achieve this goal?
Ms. Saver recommends that the group review the elements of TQM to use those to help guide the group in the discussion.
The goal of this scenario is to identify the metrics that could be improved through changes at BA over the fiscal next year, and propose reasonable methods (guided by TQM elements) for improving those metrics.
At the end of this scenario, the learner should be able to:
- Describe one metric indicating the performance of a company, and propose a reasonable management intervention based on TQM elements to improve that metric;
- Choose a new numeric goal for such a metric, and provide a rationale as to why that goal is reasonable; and
- Provide an example of a management intervention that would likely NOT impact such a metric, and explain why it would likely fail using TQM elements.
Human Relations Department
Being from HR, the first thing I tend to look at is “number of employees”. I love our employees, but let’s face it – they are really expensive. You need to train them, get them up-to-speed in their jobs, and then if they leave, you have to eat that expense. The technical workshops are great, but in previous meetings, Dr. Saver told us they are very expensive to deliver, even if they seem to be worth it.
Statement in Meeting
“Hey, I thought of a way we might be able to reduce “number of employees”. I’m trying to think strategically with a systematic approach, and focus on how we could improve our processes. We probably still need the same number of customer service employees, Lady Goodflight, and possibly more if we increase ticket sales. But if we could automate some of our engineering processes, we would need fewer technical employees. Maybe there are ways Dr. Tinker can think of to do that – she’s such a good inventor – and then we could roll out these new ways in the technical workshops. What does everyone think about this idea? Dr. Tinker, does this seem reasonable?”
After looking at historical reports, I’m so pleased to see our profit number, which is already rather high. Still, when improving profits, I have to ask myself two questions: 1) How do I increase sales? and 2) How do I reduce costs? My eye goes right to the “Passenger load factor” which is 79.1%; that means that on average, when our planes fly, they are only about 80% full. Operating at that level, the number of customers we served last year was 34.6 million.
Statement in Meeting
“Before I say too much, let me put it out there that I have to look to Lady Goodflight to enlighten us as to the customer perception of what I’m going to propose. Right now, our passenger load factor is around 80% – if we could just increase that by even 1% or 2%, we could serve significantly more passengers, and this could increase profits. Imagine we served two million more passengers – that translates to a high level of profit. The idea is that if we could get planes to be fuller, we could increase the number of customers we are serving without increasing costs much, since these are planned flights anyway, and we are just increasing the number of people each flight serves. What worries me is this might negatively impact customer service and other parts of the system, because we want to be customer-focused. What do you all think about this – especially you, Lady Goodflight?”
Ms. Saver is so funny – she always looks at the money side of things, and overlooks the issues with inventory. Our turnover is terrible; the lower it is, it means the more we have to pay for storage of our inventory, which is costly. This is possible to correct with better planning, but it really requires system thinking, because the whole system has to adjust – the distribution of type of employees and what they do, and how planes are managed and organized – the whole thing.
Statement in Meeting
“I’m sorry, but my eye makes a beeline straight to our turnover number, which is terrible. I think it could easily be 1 to 2 million pounds higher – in fact, I think this is the main place where we are losing money. I think we should target increasing turnover to increase profits, but if we did that, you’d all become my best friends really quickly, because we’d be meeting constantly. I’d need to work with Mr. Hari to implement personnel changes, Lady Goodflight would need to partner with me to help me figure out how to move our customer-focused inventory faster, Dr. Tinker would need to educate me more on moving our plane-related inventory faster, and Ms. Saver would need to approve all of our crazy ideas. It would be a big project, but I’m up for it if you want to do it!”
I love my team, but they really are not techies like me, and they have no idea about all the hot new things going on in the airline industry. When they see “number of aircraft” is 245, they probably imagine 245 identical airplanes – but they are not all the same! Some are little puddle jumpers, and some are jumbo jets – and they are from all different eras. Our fleet is not exactly outdated, but I’ll bet dollars to donuts we’d be able to favorably impact all these numbers if we strategically added some carefully-selected new airplanes to our fleet.
Statement in Meeting
“Okay, please don’t accuse me of being a shopaholic, but I really think we should consider acquiring a few carefully-selected new airplanes that are now past testing and available to add to our fleet. Some of these airplanes have very high capacity, and can travel quickly. Over time, this could increase the number of passengers served, with only a modest increase in number of employees. We might even be able to hold down this increase with automation and other efficiencies we can build in. I think Lady Goodflight will agree that customers prefer traveling in newer airplanes, so maybe our passenger load factor could even go up. What do you think? Should I put together a shopping list of possible airplanes to consider?”
Customer Service Department
I’m sure what I am going to say is not going to be popular, but I have to find a diplomatic way to say it. I constantly talk to customers, and I am getting a few consistent messages. Customers do not like our reservation and ticketing system in its current form. Even though it is online, it is very clumsy to use. Unfortunately, the system is the “pride and joy” of Dr. Tinker, who was in charge of designing the system. As much as I like Dr. Tinker and think she is a good engineer, she does not have customer service experience, and therefore she made some design mistakes we really need to correct.
Statement in Meeting
“I have a great idea that could improve a few different numbers, and it would not really impact your departments very much. Sound great? Here it is! Customers keep telling me that they would use our online reservation portal more often if it worked better. Right now, it does the job, but the customers have suggestions to really make it an excellent user experience if we just upgrade it. Think of it as giving it a makeover! If we did that, we could make our number of passengers go up, and we could improve the efficiency of our operations, because the customers who don’t like the portal just call reservations and talk directly to our employees. In fact, if we could more efficiently fill up planes with these willing customers, the passenger load factor would be impacted in a positive way as well.”
FSU Students: Please submit your essay on Blackboard per your professor’s instructions.
In the case study, Table 1 presents metrics about BA for March 2008. Imagine you were on the BA executive team, which was meeting to set goals for these metrics for the next fiscal year in 2009. Imagine the team wanted to use TQM elements as a guide setting the new goals.
State two (2) metrics from Table 1 from that you think you could improve through a management intervention. Describe the management intervention, and how you think it would improve the stated metrics. Explain how at least two (2) elements of TQM relate to your management intervention.
|Stated at least two (2) metrics from Table 1 that could be changed through a management intervention.||2|
|Described the management intervention, and provided a clear and reasonable rationale for how the intervention should improve the stated metrics.||2|
|Stated at least two (2) elements of TQM that relate to the proposed changes, and linked them with the proposed changes.||2|
|200 to 300 words||1|
|Clear, cohesive writing with proper grammar.||1|
|Appears to have integrated the concepts of applied TQM in answer.||1|