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Case 1: Rolls-Royce
Rolls-Royce plc, a UK-based aircraft engine
manufacturer, sh
Case 1: Rolls-Royce
Rolls-Royce plc, a UK-based aircraft engine
manufacturer, shifted its focus from being a product/technology firm to
providing aftermarket services. Rolls-Royce was the first to introduce
power-by-hour assistance in the aircraft industry. Customers paid a set
maintenance cost for each hour an aircraft was in flight, specifically
for the duration when the aero engine was operational. The company
provided various service packages tailored to different customers.
Rolls-Royce’s post-purchase services aided clients in minimizing
maintenance expenses and operational interruptions. The organization was
able to enhance its aero engine designs and establish positive
relationships with clients as a result of their contributions. The
corporation also acquired a consistent long-term revenue flow from the
maintenance contracts. Analysts believed that the company’s service
orientation significantly enhanced its position in the unpredictable
aerospace business. In 2017, Rolls-Royce’s service revenues of GBP4.2
billion made up 53% of its total revenues. Rolls-Royce experienced
financial success from its aftermarket services but encountered issues
in 2016 when key clients like as All Nippon Airways (ANA) reported that
turbine blades in Rolls-Royce engines were corroding at a faster rate
than anticipated. Virgin Atlantic, British Airways, Norwegian Air, and
Air New Zealand also experienced issues with the Trent 1000 engines.
Consequently, the airlines decided to immobilize the aircraft and cancel
numerous flights to conduct necessary repairs on the afflicted planes.
Aside from incurring significant costs for the airlines, it also drew
attention from authorities. Analysts thought that fixing approximately
380 engines globally would not be a quick solution for Rolls-Royce.
Rolls-Royce announced that the engine repair would amount to GBP370
million in 2018 and GBP270 million in 2019. The corporation needed to
address its engine issues and secure a significant percentage of its
future revenue from aftermarket services.
Rolls-Royce is keen to
avoid further problems with the engine and in March dropped out of the
race to power Boeing’s planned mid-market aircraft. “We do not
anticipate it will cause any significant operator engine maintenance
burden,” a spokeswoman said. “We are developing a design solution which
will remove the need to inspect these parts.” Rolls-Royce set out to fix
all affected Trent 1000 engines in record time. Not all Trent engines
required attention, but those that did required a rapid response from
the British company. Rolls-Royce invested in new tools, equipment and
people, and expanded capacity at its facilities in order to deal with
the problem. Rolls-Royce doing the engine modifications, trained airline
engineers to undertake their own inspections, allowing airlines more
flexibility over their maintenance requirements. Questions: (40 marks)
1. How would you describe Rolls-Royce’s competitive strategy? Does its operations management support that strategy? (20 marks)
2. How could Rolls-Royce implement a strategy that prioritizes operational toughness and rigid dependability ? (20 marks)
Case 2: Service Industry
Choose
one example of service industry that you know in Oman. It can be bank,
telecommunication company, customer service, hospital, travel agency,
etc.
Conduct an observation and literature studies about the process and provide a report to answer questions below:
1.
What is the current state of your chosen industry process? Create a
process mapping to explain the process in detail’s explanation! (20
marks)
2. Based on their current process, what problems exist
based on your observation? Provide a brief explanation on why you think
that is a problem! (15 marks)
3. What improvements can be derived
from the identified problems in your chosen industry to improve their
performance? Please provide new process mapping or calculate the
productivity to shows the improvement!
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