Contents

• This paper is based on the following case study -
• SouthWest Airlines
• Founded in 1971 with four planes serving three cities, the company currently operates over 500 aircraft in 68 cities. Southwest has the best customer service record among major airlines, the lowest cost structure, and the lowest and simplest fares. Despite a freewheeling, innovative corporate culture, even Southwest needs to get serious about its information systems to maintain profitability. Southwest is just like any other company that needs to manage its supply chain and inventory efficiently.
• The airline’s success has led to continued expansion, and as the company has grown, its legacy information systems have been unable to keep up with the increasingly large amount of data being generated. One of the biggest problems with Southwest’s legacy systems was lack of information visibility. Often, the data that Southwest’s managers needed were safely stored on their systems but weren’t “visible” or readily available for viewing or use in other systems. Information about what replacement parts were available at a given time was difficult or impossible to acquire, and that affected response times for everything from mechanical problems to part fulfillment.
• For Southwest, which prides itself on its excellent customer service, getting passengers from one location to another with minimal delay is critically important. Repairing aircraft quickly is an important part of accomplishing that goal. The company had $325 million in service parts inventory, so any solution that more efficiently handled that inventory and reduced aircraft groundings would have a strong impact on the airline’s bottom line.
• Southwest’s management started looking for a better inventory management solution, and a vendor that was capable of working within the airline’s unique corporate culture. After an extensive search, Southwest eventually chose i2 Technologies, a leading supply chain management software and services company that was recently purchased by JDA Software. Southwest implemented the i2Demand Planner, i2 Service Parts Planner, and i2 Service Budget Optimizer to overhaul its supply chain management and improve data visibility.
• I2 Demand Planner improves Southwest’s forecasts for all of the part location combinations in its system, and provides better visibility into demand for each part. Planners are able to differentiate among individual parts based on criticality and other dimensions such as demand volume, demand variability, and dollar usage.
• I2 Service Parts Planner helps Southwest replenish its store of parts and ensures that the right parts are in the right location at the right time. The software can recommend the best mix of parts for each location that will satisfy the customer service requirements of that location at the lowest cost. If excess inventory builds up in certain service locations, the software will recommend the most cost-efficient way to transfer that excess inventory to locations with parts deficits.
• I2 Service Budget Optimizer helps Southwest use its historical data of parts usage to generate forecasts of future parts usage.
• Together, these solutions gather data from SouthWest’s legacy systems and provide useful information to Southwest’s managers. Most importantly SouthWest can recognize demand shortages before they become problems, thanks to the visibility provided by i2’s solutions. Southwest’s managers now have a clear and unobstructed view of all of the data up and down the company’s supply chain.

Description

This paper answers the following questions on the case study -
Task 1
The introduction of Supply Chain Management Software is a huge undertaking for any organisation. SouthWest Airlines has spent $352 million on implementing the SCM software.
Justify the cost of implementing SCM by evaluating the specific benefits to the business processes from this project. You should focus on TWO Business Processes.
12 / 13 marks per business process
7 – 12 (13) marks for a clear evaluation of the process affected by the introduction to SCM. Students should consider the up chain and back chain implications of the process. Student should discuss benefits to the process of implementing SCM and not just a descriptive account of the processes. Work in this range will be well written, well researched and correctly referenced. Students will show an understanding of the benefits of SCM to the business.
4 – 6 marks for a reasonable evaluation of the process affected by the introduction to SCM. Students should consider the up chain and back chain implications of the process. Work in this range should evidence some research and be correctly referenced. The account may be descriptive with limited evaluation.
0 – 4 marks work in this range will be deficient in either referencing, research or understanding. Students will only have given a limited discussion or the discussion will be unfocused.
[25 marks]
Task 2
Introduction of a large Information Systems Projects such as undertaken by SouthWest Airlines is not only costly but difficult to implement. Projects such as these often fail.
Discuss TWO key strategies that the business can or has adopted to mitigate the risk of failure. Your answer should identify and evaluate both the risk and solutions that can be employed.
12 – 13 marks per risk
7 – 12 (13) marks for a clearly identified risk that would relate specifically to this business. The risk will be framed in the wider business context. Appropriate solution to mitigate the risk will have been clearly identified and expanded upon. The solution will be appropriate to the case study. Work in this range will be well researched and referenced and student will show an understanding of the risk and it implication to the business.
4 – 6 marks for a reasonable evaluation of the risk posed and an appropriate solution discussed. Work in this range should evidence some research and be correctly referenced. The account may be descriptive with limited evaluation.
0 – 4 marks work in this range will be deficient in either referencing, research or understanding. Students will only have given a limited discussion or the discussion will be unfocused.
[25 marks]
Task 3
Employing any TWO of the business modelling techniques discussed in the unit, with supporting explanations, describe how the implementation of the i2 SCM project has improved the current position of the organisation.
10 marks per model / discussion
2 – 5 marks for selection of appropriate business model.
3 – 5 marks for application of the model to the business. For full marks students should select an appropriate model, and using the case study use the model to show how the SCM has improved the competitive ability of the business. Models could include Porter’s 5 force model, Balance Score Card, PEST etc. The model should be completed using the business discussed in the case study.
0 – 3 marks – inappropriate model applied, inappropriate application of the model, e.g. it does not address the issues of the business or does not address how the model demonstrates competitive advantage to the company. The model is completed with ‘generic’ data eg. It does not specifically focus on the business in the case study.
[20 marks]
Task 4
Executive Summary [15 marks]
Task 5
Reflections and Learning
Award maximum 10 marks for providing the Reflections and Learning highlighting the skills learned while working on this assignment, the mistakes made, the assumptions questioned and why?, the problems encountered and how are these problems solved? The write-up should demonstrate excellent understanding of the business and IT / IS concepts.
[10 marks]
Task 6
In-text Citation and Reference List
Award maximum 5 marks for providing the Reference List and citing the references. Students should provide at least six references from the published and online material. Following points will be taken into consideration for the References and Citation showing a good understanding for the importance of Reference / Citation:
Quality of the Reference material,
Following the conventions for providing the citation,
Following the conventions for providing the Reference List, and
For providing the Reference List in alphabetical order.