Strategy SpiceJet: Flying in the Face of Imminent Shutdown
This case describes the plight of SpiceJet, an Indian low-cost airline that found itself in an acute liquidity crisis and on the brink of closure in December 2014. By the month's end, SpiceJet had no money to fuel its planes, run its operations or pay salaries, airport duties and taxes. Oil companies had refused to extend further credit to the airline until it settled its past dues. By late 2014, the operational footprint of SpiceJet, which had ballooned to 59 destinations, deflated when the airline had to reduce its fleet to 32 planes from 58 planes within a short span of six months. The lessors demanded that the planes be returned to them to reduce their risk exposure in SpiceJet. In January 2015, Ajay Singh, former chairman and founder of SpiceJet, came back on board five years after he sold the airline to media baron Kalanithi Maran of Sun Group. Singh was asked to bring the troubled airline back on track, a task that was fraught with challenges. Apart from managing the liquidity crisis, Singh had to find a way for SpiceJet to retain its key routes with a smaller fleet and recover ground where SpiceJet had been forced to recede. It was also crucial to raise employee morale and win back customer confidence and trust in the brand. The case unfolds the structural challenges of the Indian airline industry, which is characterized by steep discounting and overcapacity that eventually results in the underutilization of assets. Only an airline with limitless access to capital or very high operational efficiencies is likely to survive in this sector.
This case can be mapped for both MBA and Executive MBA courses in Strategy and Operations Management to: 1. Illustrate the operational dynamics of the airline industry and analyze dominant strategies. 2. Examine the plight of an airline going through a liquidity crisis. 3. Evaluate a comeback strategy that tweaks operational parameters and helps with better resource management. 4. Understand critical of aspects of revenue management₹399.00
Operations Management Dr. Reddy's Laboratories Ltd: Inventory Management Under Resource Constraints
Set in 2016 in Hyderabad, India, the case follows Puvvala Yugandhar, Senior Vice President at Dr. Reddy's Laboratories (DRL), as he decides what to do about an underperforming production policy at their plants. Adopted a decade earlier, the policy, called Replenish to Consumption -Pooled (RTC-P), had not delivered the expected results. Specifically, the plants had been seeing an increase in production switchovers and creeping buffer levels for certain products, which had led to higher holding costs and lost sales for certain products. A senior consultant had suggested that DRL switch to a demand estimation-based policy called Replenish to Anticipation (RTA), which attempted to address the above concerns by segregating production capacity and updating buffer levels using demand estimates. However, Yugandhar, well aware of the challenges of changing production policies, wanted to explore a variant of RTC-P called Replenish to Consumption -Dedicated (RTC-D), which followed the same buffer update rules as RTC-P but maintained dedicated capacities for a subset of products.
By studying and solving the decision problem in the case, students should be able to better appreciate the challenges involved in making long-term operational changes. It gives them an opportunity to: (1) understand how each input might impact the final decision, and (2) how to weigh each of these inputs in arriving at the final decision.₹399.00