Page 167 - Operations Strategy

142 CHAPTER 4 • CAPACiTy sTRATEgy
off and land and the aircraft themselves operating on all the various sectors, which
include the airport. Each of these stages, in planning their capacity, is subject to dif-
ferent pressures. Building new terminals is not only expensive in terms of the capital
required, but also subject to environmental considerations and other issues of public
concern. The individual aircraft that use these facilities are both far smaller units of
capacity in themselves and form an element in the capacity chain that is subject to
normal business commercial pressures. Different sizes of aircraft will be used for differ-
ent routes depending on the ‘density’ (volume of demand) of the route. Because they
represent relatively small units of capacity, the number of aircraft using an airport can
change relatively smoothly over time. Runways and terminals, however, represent
large increments of capacity and therefore change less frequently. Also, within each
part of the chain the effective capacity may improve because of technical changes.
Terminals are becoming more efficient in the way they can handle large amounts of
baggage, or even tag customers with micro-chipped tickets so that they can be traced
and organised more effectively. All of which can, to some extent, increase the capacity
of a terminal without making it any larger. Likewise, runways can accommodate more
aircraft landing by providing more ‘turn-offs’, which allow aircraft to clear the main
runway very soon after landing in order to let the next aircraft land. On high-density
routes the aircraft themselves are getting larger. When the number of slots available to
an airline is limited, and if route density warrants it, very large aircraft can increase the
number of passengers carried per landing or take-off slot. However, these changes in
effective capacity at each stage in the chain may affect the other stages. For example,
very large aircraft have to be designed so as to keep the air turbulence they cause to a
minimum so that it does not affect the time between landing slots. Also, very large
aircraft may need different terminal equipment such as the air bridges that load and
unload passengers.

location of capacity

Often, the reason why operations are where they are is not always obvious. Some-
times historical reasons have dictated the location. Such operations are ‘there because
they’re there’. Even more recent location decisions are not always logical. Entrepre-
neurial whim or lifestyle preference may overcome seeming locational disadvan-
tages. In other cases, the location decision is only reached after extensive thought
and analysis.

the importance of location

The location decision is rarely unimportant, but sometimes can be very important to
the long-term health of an organisation. This is because the location decision can have
a significant impact on both the investment in the operation’s resources and in the
market impact of the operation’s resources. For example, locating a fire service station
in the wrong place can both slow down the average time for the fire crew to respond
to the call or increase the required investment to build the station, or both. Similarly,
locating a manufacturing plant where it is difficult to attract labour with appropriate
skills may affect the quality of its products (hence revenues), or the wages it has to pay
to attract appropriate labour (hence costs).

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