In the modern world of business, companies have to engage in stiff competition in order to survive in the market. In the airline industry, this competition is particularly severe, but Singapore Airlines (SIA) has been able to achieve sustainable competitive advantages and exhibit outstanding performance over decades (Heracleous & Wirtz 2009). It is important, therefore, that the company keeps its performance at this level while growing internationally. In this paper, the operational control, supply chain, and human resources management of SIA will be discussed; recommendations for SIA’s international expansion pertaining to these issues will be provided.
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Operational Control, Production and Distribution/Supply Chain Management
In SIA, the function of operational control is carried out by a separate unit created specifically for this purpose, the SIA Operations Control Center (SIAOCC), which works 24/7 and coordinates not only SIA itself but also other services performed by this company, in particular, Scoot, SIA Cargo, and Silkair (Singapore Airlines 2013). Importantly, SIAOCC consists of a Manager Operations Control, Flight Control Center, SIA Engineering Line Operations, and Cabin Crew Control Center (Singapore Airlines 2013, p. 3).
Among the possible issues pertaining to the work of SIAOCC, the suboptimal monitoring of ground operations and the dearth of provision of transparency of the main operational tasks, as well as not fast and efficient enough communication which may hinder the decision-making process, are noted (Singapore Airlines 2013). Thus, it is possible to recommend enhancing communication between the units of SIAOCC (which will be especially important if the company is to grow internationally), as well as introducing additional control measures to improve the transparency of the operations.
The company of SIA is supplied by the necessary goods, materials, fuels and so on by its own subsidiary, SIA Cargo; thus, SIA Cargo, apart from providing cargo flights to its customers, is one of the main units responsible for supply chain management of SIA (Supply Chain Leaders n.d.). SIA Cargo has received a number of significant awards, in particular, for its supply chain efforts (Singapore Airlines Cargo 2015).
As it was already pointed out, the operational control of SIA Cargo itself is conducted by SIAOCC. On the whole, it is paramount to stress that Singapore Airlines Group owns a large number of subsidiaries (in 2009, this number was equal to 36, according to Heracleous and Wirtz (2009, p. 2)), such as the SIA Engineering Company, which conducts aircraft repair and maintenance, or Singapore Airport Terminal Services, which provides solutions pertaining to food and hospitality services supply. The distribution is also conducted mainly by the units of the company. Thus, it is possible to state that the supply chain if SIA is vertically integrated to a certain degree.
However, it might be assumed that the enterprise will have no choice but to make its supply chain at least somewhat more horizontal while expanding internationally. It might be recommended, however, that the organization should still aim at creating a vertical supply chain where possible, for this allows the business to implement the principles according to which it operates and which have proven efficacious in most of its operations.
Human Resources Management
Human resources are of the essence for the airline industry, for the front-line employees are what the clients see first when they come to an airport. Thus, SIA has adopted such principles of the human resources management as the attraction of the best employees and their long-term retention, providing its workers with holistic training and significant motivation via recognition and rewards in order to supply an excellent quality of service to the clients; in addition, much attention is paid to the cost-effectiveness of the workforce (Wirtz, Heracleous, & Pangarkar 2008). These principles are applied in all the locations where the company operates.
Heracleous and Wirtz (2009, p. 4) state that the service excellence is maintained by rigorous service design (i.e., feedback mechanisms from demanding customers) and holistic staff development, whereas cost-effectiveness is achieved through profit consciousness among employees; in addition, both strategic synergies (such as diversification of services and strong infrastructure) and the constant implementation of innovation enhance both the quality of service and the cost-effectiveness of the company and its workforce.
It is possible to note that there seems to be a paradox between the cost-effectiveness of the workforce and their motivation through rewards; however, the company has been able to maintain both these aspects for years, which is why it is stated that SIA possesses a certain type of ambidexterity (Heracleous & Wirtz 2014). Because the company has been profitable over decades, it is possible to recommend that it continues operating in this way, keeping its employees well-trained and motivated, and simultaneously stimulating them to make conscious efforts aimed at increasing the company’s profitability. Because these principles are at least partially responsible for the company’s success, it is of the essence to keep to them while expanding internationally.
Therefore, it should be stressed that SIA has achieved and retained sustainable competitive advantages over decades. The company’s operational control is carried out by SIAOCC, and it might be recommended that the business enhances communication between the units of SIAOCC, which may be crucial in international operations. SIA is vertically integrated to a significant degree; it is might be recommended to maintain this vertical integration of the supply chain where possible while expanding internationally.
As for the company’s human resources management, the business should also attempt to retain its ambidexterity and keep aiming at providing employees with high-quality training and considerable motivation while developing the conscious orientation for profit among them.
Heracleous, L & Wirtz, J 2009, ‘Strategy and organization at Singapore Airlines: achieving sustainable advantage through dual strategy’, Journal of Air Transport Management, vol. 2009, no. xxx, pp. 1-6. Web.
Heracleous, L & Wirtz, J 2014, ‘Singapore Airlines: achieving sustainable advantage through mastering paradox’, The Journal of Applied Behavioral Science, vol. 50, no. 2, pp. 150-170. Web.
Singapore Airlines 2013, Request for proposal. Web.
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Singapore Airlines Cargo 2015, Our company. Web.
Supply Chain Leaders n.d., Singapore Airlines Cargo Pte Ltd. Web.
Wirtz, J, Heracleous, L & Pangarkar, N 2008, ‘Managing human resources for service excellence and cost effectiveness at Singapore Airlines’, Managing Service Quality, vol.18, no. 1, pp. 4-19. Web.