Case Study Chp.8
Southwest airlines operates over 500 aircraft in 72 airports. Being one of the largest low-far, high-frequency, point-to-point airline in the world, inventory management is top priority. With their unique corporate structure is crucial that they have a system in place to help ensure that all airline parts are readily available when an aircraft needs repairing. Being that Southwest prides itself in customer service, inventory management is crucial in order to make sure they are able to repair an aircraft quickly and ensure that their passengers get from one location to another with minimal delays.
1. Southwest airline prides itself in excellent customer service. In the even that an aircraft needs to be repaired, inventory management plays a big role in ensuring Southwest’s excellent customer service. Being able to reduce an aircraft’s grounding and get customers from one place to another without minimal delay requires Southwest to keep their inventory readily available and equipped with the parts needed to fix whatever situation an aircraft encountered. In order to ensure that the process of grounding an aircraft ran smoothly, Southwest needed to find a cost-effective way to increase productivity and make sure their maintenance crews had the right parts. Not having the right parts at the right time is not only cost affecting, but it will cause delays. This then can cause a domino effect resulting in unhappy customers and customers demanding refunds.
2. People, organization, and technology are all factors that were responsible for Southwest’s problems with inventory management. The organization and the people managing Southwest were unable to successfully provide efficient inventory management solutions. Not being able to provide inventory solutions results in increased grounding times for aircrafts because they did not have the right parts. Along with running out of parts due to the lack of inventory management of the organization and its management team, the lack of information visibility contributed to this problem. Even though information was stored on managements systems, the information was not readily available for viewing or use on other systems. This affected response times of mechanical problems and part fulfillment.
3. I2 Technologies, a leading supply chain management software and service, provided Southwest airlines with a better inventory management solution. Southwest implement the three services; the i2 Demand Planner, i2 Service Planner and i2 Budget Optimizer. The demand planner helps Southwest to forecast for part location combinations and provide the demand for