Southwest Airline

IDS 532 Term Project

Yidan Zhao
Ruomei Xue
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CONTENT

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 第一部分
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Fresh business general template
Applicable to enterprise introduction, summary report, sales marketing, chart dataa
Issues and Problems

Flight Cancelation &

Aircraft Breakdown
One single operating platform, Boeing 737
- Efficient, but any mercanical problem could Competition & Market Share
affect the entire fleet (recent 737 Max incidents) JetBlue and its similar low-cost business model
- Metropolitan and smaller airports
Labor Retention - High-quality customer service
- New luxurious lether seats and live TV
High employee turnover at certain large airport - Latest technology applied to operating system
- Tight labor market
- High cooperation skill requirement
- High labor standards
- Insufficient Motivation and Incentive Systems
Operation Management Issue
Human Resource & Job Design

Case Study

Harvard Business Publish Case: Southwest

Airlines in Baltimore, in 2002
Why is BWI So Important to Southwest?

One of Southwest's eight Large % of Connecting Passengers

“Mega Station” Over 800,000 passengers made connections in
Over 100 departures per the past year (25% of total)
day
Problems at BWI

Southwest aircraft high Disproportion number of

01 frequency of take-offs and 02 connecting passengers
landing was costly and labor
intensive

- Complecated system schedule service design

(automatically adjust convenient route) Employees at Dalls have the
- Flight schedule designed from marketing 03 authority to make decisions 04
standpoint: about holding a flight
“Market Driven”flight schedule, instead of
“operational driven.”
“Where do we need non-stop flights”
Two Most Important Positions at BWI
Operations Supervisors/Coordinators

- Contact with headquarter at Dallas

- Ahead of flight schedule
- Problems before emerge (i.e. delays)
-Mentor Ops agents

Operations Agents

- Flight turnaround (15-minute standard)

- Speed maximizing
- Productivity & Efficiency
 Solutions
1. Job Expansion and create
self-directed teams
- Ensure legitimate contributors on the team
- Financial or non-financial rewards
- Market specific training program
Job Element 1 2 3 4 5 Perfor
mance
Rating
Turnaround 1 30 20 15 18 17 75%
Turnaround 2 25 14 16 20 22 77%
Turnaround 3 15 15 17 20 18 88%
Turnaround 4 16 14 23 15 15 90%
Turnaround 5 29 15 16 21 30 67%

3. Adjusting Current 2. Improve Motivation

Labor Standards & Incentive Systems
Time Studies Analysis - Cash or Stock options
- Performance Rating= Normal time - Higher percentage of retained
(15)/Average Time for Turnaroud (16 -17 earning distribution
minutes) - Gas cards and extra vaction days
- Standard Time= Normal Time/ (1-Allowance
Factor)=16.67 minutes
Assumptions: 10% allowance
 Pros and cons
1. Job Expansion 2. Improve Motivation & 3. Adjusting Current Labor
Incentive Systems Standards

Pros: Pros: Pros:

- Enhance employee empowerment - Reduce turnover - More accurate standard setting
Improve work life and job satisfaction - Increase employee morale based on actual obesevations
- Reduce turnover and absenteeism - Easy to adjustify

Cons: Cons: Cons:

- Cost increase - Cost increase - Outliers
- Some people prefer simple task - Negative ripple effect in other - Lower standards causing customer
market dissatisfaction
Recommendation
Short Term
 Lower turnaround standards to a range
between 16-17 minutes

 Or decrease allowance factor to 6% or 7%

Long Term
 Adjust motivation and incentive system

 Aim toward achiving final stage of job expansion

and developing self-directed teams
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