Air Australia Case Analysis

Brief description of the chosen business process

Air Australia is a global company that has more than 200 airplanes, 100 pilots and 500 cabin crew. It flies to destinations spanning a network spread over six continents. Air Australia’s mission statement is to maximise returns for the benefit of our stakeholders and become one of the preferred leading carriers worldwide.

With the growing demand of customers, the company constantly purchases new planes to meet the ever-expanding demand. As a result, the purchasing of airplanes is a key business process for Air Australia. The purchasing process begins when the company identifies a buying need for meeting the market demand. A requisition is generated, this details the requirements of the needed planes. A request for quotation is then raised. Manufacturers send their quotations in response to the request for quotation and a review is undertaken in the procurement department. The best offer from manufacturers based on price, quality and availability is given the purchase order. The type of purchase order generated in this process is a planned purchase order which is an agreement on specific items at an approximate date. Terms and conditions are accompanied with the purchase order which form the contractual agreement of the transaction. The manufacturer delivers the items by the due date and the company goes through a inspection process and then records the delivery. A invoice is sent by the manufacturer which is cross-checked with the purchase order and documents specifying which goods have been received. At last the payment is then made and transferred to the manufacturer.

Significance of the process for the performance of the organization

Purchasing is the act of acquiring ...

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...reduces time involved in the purchasing process in contrast to preparing purchase orders separately shown in diagram 1.

Utilization of Resources

Observations within the industry shows that specialization for task enhances employee’s efficiency by 20%. As a result, Air Australia should introduce assignment of resources to the business process. For example, each position has a different roles and responsibilities in the company. The chief executive officer is accountable for ensuring that control mechanisms are developed and implemented. Purchasing manager is responsible for ensuring staff in the department undertaking any procurement processes within their role are sufficiently informed about relevant procurement procedures and guidelines. Staff are required to undertake purchases on behalf of their specific area and should familiarise themselves with the industry.