Coursework - Long Ridge Flying Club

Executive Summary
Long Ridge Gliding Club (LRGC) is a not-for-profit organization run by its members, operating out of an old farmhouse. It has decent facilities and 6 gliders, used by both club members (150 members) and casual members (700 trial flights last year).

The club has the following primary concerns; * Poor safety record – in the past 2 years 4 gliders had crashed, resulting in 2 fatalities and 3 serious injuries. This may also raise questions on the quality of the gliders and other associated equipment. * High operating cost – due to the above incidents, the insurance premium has increased significantly. * Insufficient flying time – club members provide coaching and spend substantial amount of time in helping out in the preparatory work to get flyers in the air, and thus, having less flying time for themselves. * Long waiting time – casual members are concerned about having to wait up to 2 hours before being able to fly, even though pre-booking had been done. * Limited new memberships – although there were 700 trial flights last year, only a handful of those who attended the trials became club members.

The write-up below aims to review the operations strategy by; * Evaluating the service to club and casual members. * Charting the 5 performance objectives against the expectations of the club/casual members and the actual performance of the club. From the above review, recommendations have been made (appended at the end of this document) to address the concerns of club and causal members, while meeting the quality, speed, dependability, flexibility and cost performance objectives of the club.

Introduction
Gliding is an inexpensive way to get airborne. It is a silent and graceful way of flying without an engine.

Clubs will generally have twin-seaters for instructional purposes, as well as single-seaters that member can use for flying solo, once they become qualified.
There are several ways of launching a glider; * Aero-tow: glider pulled and launched by a light aircraft * Winching: this is probably the most common method of launching, where the glider is pulled and launched by a winch. * Self-launching gliders: these self-launching gliders are expensive, but can take off like regular aircraft, climb to a safe height and then stow the engine and soar like a regular glider. The engine also provides a handy safety-net in case the glider doesn't maintain enough height to return home to the airfield.

Once airborne, the glider has to “find” air that is rising. There are 3 forms of this “lift” that helps the glider stay airborne – thermals, ridge (or hill) lift and wave. Gliders may use one or all 3 forms of lift to get height and go to the next area of lift. A typical task may be a triangular glide path – with the aim to get back to the starting point.

1) Evaluate the service to club members and casual flyers.

| Club Members | Casual Members | Products | Practice ridge soaring and cross-country flying using gliders (owned by club or self-owned), launched from the club's airfield. | Practice ridge soaring and cross-country flying using gliders (owned by club), launched from the club's airfield. | Customers | Club members | General public | Product range | 3 single-seater, 3 twin-seater gliders and bunk rooms for overnight stay. | 3 twin-seater gliders. | Design changes | None | None. | Delivery | According to expectation of members | Safe and dependable/fast service | Quality | High safety standards, skilled instructors and well maintained equipment used for gliding. | High safety standards, skilled instructors and well maintained equipment used for gliding. | Volume per service type | 150 | 700 (based on the number of trial flights in the previous year) | Profit margins | Medium | Low |

a. Products
Club members: LRGC provides members with the use of facilities to practice ridge gliding or cross-country flying. Novice members can use the club’s gliders, with qualified instructors providing guidance. Experienced members can use either the club’s gliders or their own gliders.

Casual members: The Club provides casual members with an opportunity to experience ridge gliding, guided by qualified instructors and using the club’s facilities and gliders. b. Customers
Club members: Members range from novices to experts.

Causal members: These are from the general public, who want to try-out ridge gliding to see if this sport interests them, before becoming club members. Others are those who had been given trial vouchers for gliding (as a present) and want to utilize the voucher to experience gliding, who may become members after the trials.

c. Product range
Club members: Use of 3 single-seater and 3 twin-seater gliders, use of club facilities and bunk rooms, for those wishing to stay overnight.

Casual members: Use of 3 twin-seater gliders only, as they cannot fly solo at this stage. Casual members do have bunk rooms made available to them.

d. Delivery
Club members: The club must be able to meet the expectation of the members. Members would expect; safe and good quality gliders/equipment, decent club facilities, sufficient flight time, short waiting time and reasonable fees.

Casual members: Casual members would also expect safe and good quality gliders/equipments, as well as dependable and fast service – not having to wait for a long time to take a flight, if they had done pre-booking.

e. Quality
Quality would be a fundamental requisite that the club must provide to members. Provision of quality would basically mean ensuring high safety standards, skilled instructors, well maintained gliders/equipment and comfortable facilities.

f. Volume per service type
Volume per service is high for club and casual members. There 150 members and 700 (last year’s number) casual members, both of these member types have complained about insufficient flying time and long waiting time for flights.

g. Profit margins
Income from casual flyers is small, compared to income from membership fees and launch fees. The club’s hope is for the casual members to become club members, only a handful of casual members are taking-up club membership after the trials.
The club had been achieving a regular operating surplus of $10,000 per annum, which is not a big sum, but given that LRGC is a not-for profit organization, making huge profits will not be their objective. However, the club needs to ensure that they have sufficient funds to enable the proper upkeep of the club’s equipment and facilities, and the payment to the part-time workers and instructors.

Competitive Factors | Club Members | Casual Members | Order winners | Enough gliders, sufficient flying time, new or well maintained gliders/equipment and conducive flying environment | Price, accessibility and short waiting time | Qualifiers | Safety, qualified instructors and price | Safety, dependability and quality of service | Less important | Long distance flight | Bunk rooms |

a. Order winners
Operations strategist and author Terry Hill introduced the terms order-winner and qualifiers (1989). Order-winning factors are those which directly and significantly contribute to winning business. An order-winner is a competitive characteristic of a product or service that causes a customer to choose a firm’s product/service over that of a competitor. Improving performance in an order-winning factor will either result in more business or improve the chances of gaining more business. Importantly, order-winner objectives must be sustainable, in order for the firm to maintain its competitive advantage.

Club members: 2 primary order-winning expectations for members would be quality and dependability. Enough gliders, sufficient flying time, new or well maintained gliders/equipment and conducive flying environment are attributes related to quality and dependability.

The above attributes would determine if existing members renew their memberships when it is due, and also whether casual members become members.

Casual members: The competitive factors would be reasonable fees, accessibility to the club and speed (short waiting time for their flights).

b. Qualifiers
A qualifier is a competitive characteristic a firm or product must be able to exhibit to be a viable competitor in the marketplace. Performance below this “qualifying” level will probably disqualify the firm from being considered by many customers, but, any further improvement above the qualifying level is unlikely to gain the firm much competitive benefits.

Safety, although very important, is a fundamental requirement and so a qualifier, for both type of members.

Club members: Especially for those novice members, skilled instructors would be a qualifier. Since LRGC is a not-for profit organization, price would be a qualifying factor for members, who would expect that the prices are reasonable, or even lower than commercial gliding clubs.

Casual members: Dependability (be able to fly when pre-booking had been done) and quality of service (enclosed, instead of open waiting area)

c. Less important
“Less-important” factors do not influence customers in any significant way.

Club members: While members would like to be able to take long distance flights, they would be happy to make 3 flights a day, each flight averaging 10 mins.

Casual members: Since these folks are not expected to stay over-night, bunk rooms will not be important.

| Club Members | Casual Members | Internal performance objectives | Quality (safety, equipment and facilities), dependability, cost and flexibility | Quality (safety, equipment, facilities and comfortable waiting area at launch pad), speed, cost |

Internal performance objectives of the club, must clearly correspond to the both the competitive factors and the performance that members expect of the club – only then, can the club retain existing members and attract new members.

Club members: * Quality – high safety standard with no safety incidents. Well maintained equipment and facilities. * Speed – fast turnaround of gliders, resulting in shorter waiting time * Dependability – reliable operation and sufficient flying time * Cost – reasonable cost; maximum value, reasonable membership and facilities utilization fees. Achieve operating surplus, so that clubs equipment and facilities can be maintained or upgraded. * Flexibility – fast and dependable. Having adequate people and equipment resources to achieve speed (short waiting time) and dependability (sufficient flying time).

Casual members: * Quality – high safety standard with no safety incidents. Well maintained equipment and facilities. * Speed – short waiting time * Cost – reasonable membership and facilities utilization fees.

2) Chart the 5 performance objectives to show the differing expectations of club members and casual flyers and compare these with the actual service delivered.

Below, is a polar diagram showing the expectation vs actual service delivered, for club and casual members.

Refer also to table in Attachment 1.

a. Quality
All operations regard quality as an important objective. Quality is consistent conformance to customers’ expectations – ‘doing things right’. Quality is fundamental (easily judged by customer) and clearly a major influence on customer satisfaction or dissatisfaction. A customer’s perception of high quality products and services means customer satisfaction and therefore the likelihood that the customer will return.

High quality not only leads to external customers’ satisfaction, but is also beneficial internally to the operations of the organization as well. Quality reduces cost – as in the case of gliding clubs, well maintained equipment and skilled instructors will prevent any incidents. Incidents result in possible fatalities, injuries to people (medical cost), and cost to repair/replace damaged equipment and increase in insurance costs.

Quality also increases dependability. Poorly maintained equipment or not-well qualified instructors will result in members leaving the club or people from becoming new members.

Club members and casual members at LRGL place a high emphasis on quality - quality in terms of very high safety standards, skilled instructors and well maintained (and so safe) equipment for gliding. While LRGC has strived to meet this expectation with qualified instructors and equipment that is maintained by a mechanic, the crashing and damaging of 4 gliders, resulting in 2 fatalities and 3 serious injuries in the last 2 years suggests that LRGC has not met this expectation to the fullest.

Quality of club facilities (bar, catering services and bunk-rooms) would be considered more important for club members, as they spend more time at the club than casual members. However, it is not conducive for casual members to be exposed to the weather elements for long durations (up to 2 hours sometimes) at the launch pad, while waiting for their turn to fly. In this regard, the club has not met the expectation of the casual members.

b. Speed
Speed means the elapsed time between customers requesting products or services and receiving them. The benefit of speed to external customers is that the faster they can have the product or service, they more likely they are to buy it, or the more they will pay for it – essentially, speed enhances the value of the product or service. Internally, speed helps to maintain dependability and improves the cost position of the organization.

By improving its speed (waiting time between launching of gliders) attribute, LRGC will be viewed by customers as a dependable club and the club would also realize cost benefits. Through shorter waiting time, the club will be able to accommodate more members (more revenue from fees) and achieve higher utilization of facilities (higher revenue from winch fees and air-time)

Speed is an important expectation of both club members and casual members at LRGC. Club members have expressed concern about having to spend a lot of time helping club/casual members to get airborne, while waiting for their own turn to fly. Even club members with their own gliders have to queue with others for a launch. Although it is stated that casual members may sometimes have to wait for up to 2 hours for their flight, it can be inferred that club members would also face similar lengthy wait for their flights, as the resources (people and equipment) are shared by both club and casual members.

c. Dependability
Dependability means customers receive their goods or services exactly when they are needed. Customers might only judge the dependability of the operations after the product or service has been delivered. Initially, dependability may not affect the probability of customers selecting the service, but over time, dependability can override all other criteria.

Dependability for LRGC members would mean sufficient flying time and being able to make reasonably regular bookings in summer and winter. Club members (and presumably casual members as well) hope to have 3 flights in a good day with average flight duration of 10 mins. Essentially, dependability would save time (speed) and gives stability/predictability – attributes which would enable LRGL to be efficient and cost effective.

Non-dependability would irritate members and would certainly be a key consideration; when club members want to renew their membership and when casual members want to convert from being casual to club membership. In fact, club members are asking the committee to end trial flights because such flights reduce the number of flights for members.

d. Flexibility
Flexibility is being able to vary or adapt the operation’s activities to cope with unexpected circumstances or to give customers individual treatment (do different things for different customers). Customers will need the operation to adapt to; product/service flexibility, mix flexibility, volume flexibility and delivery flexibility. Flexibility speeds up response, saves time (and therefore money), and helps maintain dependability However, mix flexibility (high variety of product or service) may correspond to higher costs.

Having sufficient people resources (qualified instructors, experienced club members to launch gliders, admin and maintenance staff) and equipment resources (option of various types of launching methods - winch, aero-tow, auto-tow, bungee and self launch gliders) would enable LRGL to be flexible/adaptable to meet 2 primary complaints of club members, i.e., obtaining sufficient flying time and shorter waiting time for flights. Casual members however, at the trial stage, would be concerned with the long waiting time for flights, but probably neutral about the sufficient flying time aspect.

Flexibility has a positive impact on speed and dependability, but, on the down-side, it would mean the club incurring cost to acquire the additional equipment.

e. Cost
A firm competing on a price basis is able to provide consumers with a product/service at a price that is competitively lower than that offered by firms producing the same or similar product/service. In order to compete on a price basis, the firm must be able to produce the product at a lesser cost or be willing to accept a smaller profit margin. Low cost is a universal objective of organizations, even for non-profit organization such as LRGL. Simply, every dollar removed from an operation’s cost, is a dollar added to its profits.

All operations have an interest in keeping their costs as low as possible, but ensuring reasonable levels of quality, speed, dependability and flexibility that their customers require. This aforesaid statement clearly illustrates that the various performance objectives (quality, speed, dependability and flexibility) affect cost. One important way to improve cost performance is to improve the performance of the other objectives.

For LRGC to improve its cost performance; * Having high quality aspects of safety, skilled instructors and well maintained (and so safe) equipment for gliding would costly repair and replacement of gliders. * Achieving shorter waiting time (speed), the club will be able to accommodate more members (more revenue from fees) and achieve higher utilization of facilities (higher revenue from winch fees and air-time) * Being dependable in providing sufficient flying time to members and thereby achieving stability/predictability, enabling LRGC to be efficient and cost effective. This provides the encouragement to members to renew their membership and casual members to convert to club members. * Having adequate resources (people and equipment) to achieve flexibility, which would speed up response and saves time (and therefore money)

Club members would expect reasonable membership fees and equipment utilization charges. It is likely that casual members would be even more sensitive (believing that charges are high) to the cost, as they cannot fully appreciate the operations cost of the club, at the trial stage. Membership fees and equipment charges are expected to be reasonable, as compared to regular flying clubs, based on the fact that LRGC is a not-for-profit organization. 3) What advice would you give to the chairman ?

Quality
Crash incidents must be thoroughly investigated, root cause(s) established and corresponding preventive action(s) implemented. Gliding instructors and maintenance personnel must be sent for routine trainings, not only as a refresher, but also for them to keep abreast of new technology/developments. Gliders and launch equipment should be inspected and certified by 3rd party inspectors, to ensure the integrity of gliders and equipment. These actions would improve the safety record of the club. For example on the importance of safety; passengers fly SIA instead or Garuda and are willing to pay a premium fare, because of SIA good safety record.

Allow casual members the use of club facilities to obtain additional revenue. Allow casual members to drive to the launch pad, as like club members, so that they are not exposed to bad weather elements.

Speed / Dependability / Flexibility
Members have complained about not having sufficient flying time, as they spend most of their time to get casual flyer into the air. Similarly, casual members have complained about having to wait for up to 2 hours, even though they had done pre-booking.

The way to solve this problem would be to automate the booking system. Have club members who volunteer as instructors and who help out in the launching operations, to provide their availability for the next 6 months. When a club or causal member makes an online booking, the system should be able to process the availability of instructors, launch helpers and gliders against prior bookings and notify the person if flying time is available on a given day. This way, both club and casual members will not be disappointed when they turn-up at the club. This method of booking is similar to making online booking for car servicing – if the number of car owners who wish to have their cars serviced exceeds the availability of mechanics and the number of pre-bookings, the booking will be rejected.

Club members should also be recognized for the extensive voluntary help that they provide in the maintenance and launching activities. One way is to allocate more time-slots for members. For example, members can be allocated 60% of the 180 days available for flying, while casual members are allocated the remaining 40% of 180 days.

Cost
LGRC must continue to price their products competitively, in order to retain members and attract new members. It has been deemed that the primary income sources for the club are membership fees and launch fees. Very few casual members are converting and so the club could do an inexpensive survey of casual members, to understand the reason(s) why they are not converting and then address their concerns. However, with the existing resources, it may become necessary for the club to purchase additional gliders and winching equipment. This option should be carefully studied, the cost/benefit determined and then a decision made.

As compared to the Yorkshire Gliding Club, the fees charged by LRGC are comparable and so there is no opportunity to increase the membership fees.

Improvement in the club’s safety record would present an opportunity for the insurance premiums to be reduced. Club should put their insurance needs to the market for bidding and obtain the best insurance rates.

References:

1. Nigel Slack, Stuart Chambers & Robert Johnston (2010) Operations Management, 6th edition, Prentice Hall. 2. http://wps.pearsoned.co.uk/ema_uk_he_slack_opsman_4/0,8757,1144836-,00.html 3. http://www.referenceforbusiness.com/management/Ob-Or/Operations-Strategy.html 4. http://www.gliding.co.uk/whatisgliding/gliding.htm 5. http://www.ygc.co.uk/