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Why Is Parts Inventory Management so Important at Southwest Airlines?

  • Date Submitted: 05/25/2011 06:14 PM
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Case Study #2
1. Why is parts inventory management so important at Southwest Airlines? What business processes are affected by the airline’s ability or inability to have required parts on hand?

Southwestern airlines are very high profile airlines with over 500 aircraft in 68 cities, and revenues of upward to $10.1 billion (Laudon&Laudon 2011). In order to maintain and to keep their good reputation Southwestern must be able to keep available supplies and extra inventory in stock and readily available. With over $325 million in service parts and inventory (Laudon&Laudon 2011), the company needs a strategic plan to manage this process on a daily basis to insure that all supplies are on hand.   Richard Zimmerman, southwest’s manager of inventory management, stated that “there’s a significant cost when we have to ground aircraft because we ran out of a part. The long term, cost effective way to solve that problem was to increase productivity and to ensure that our maintenance crews were supported with the right spare parts, through the right software application (Laudon&Laudon 2011).

Laudon, K. C., & Laudon, J. P. (2012). Management Information Systems: Managing the Digital Firm. Upper Saddle River, N.J: Prentice Hall.

2. Why management, organization, and technology factors were responsible for Southwest’s problems with inventory management?
Southwest experienced non visibility with in their legacy system, so in turn at times information that was needed was readily available, but then again there were times that pertinent information on supplies was not viewable. 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 (Laudon&Laudon 2011).   This glitch in the system could cause for major misunderstanding because the information needed to get the correct inventory was not available.   If an aircraft...


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