Applying the concepts of simplicity and discipline for creating customers' value in a low contact services company: an exploratory study

Abstract

Purpose – The research aims to find and highlight the process, procedures, and practices at AirAsia that deem to fit the characteristics of simplicity and discipline in the original model for creating value in the forms of lower operations costs, which ultimately translates into lower ticket price for Airasia's customers. Design/methodology/approach – A case study method is used in this study. It is appropriate as; the model has not been applied to a service organization. In exploring the concept of simplicity and discipline and how they create values, at a set of the best practices and procedures utilized by AirAsia are being scrutinized. Four employees at the executive and managerial level were interviewed. The author spent approximately two hours with the senior manager of Network Management Centre as all operations fall under his jurisdiction. Besides him, this study also took information from a technical service manager and two executives. The information collected from the staff is complementary to each other, ensuring the internal validity of the method. The secondary information was taken primarily from AirAsia's website: AirAsia.com. Findings – It is suggested that excellent practices and procedures done at Airasia characterize both concepts of simplicity and discipline, which in return help AsiaAsia in creating value for its customers. For example, the company decision to use one type of aircraft ensures its easy maintenance and training of staffs. The use of IT at the company helps the company plan the unplanned changes. The clever use of IT has enabled the control filter, as specified by Correa and Gianesi to function properly. It simplifies the booking, sales and checking-in procedures. Furthermore, the company has locked a partnership with its IT vendors for mutual benefits where AirAsia can constantly improve their system while the IT vendor learns to create innovative products according to customer requirements. Research limitations/implications – The result does not indicate that that Airasia's operational success is due to these concepts. Rather this article suggests that the concepts of simplicity and discipline, as proven to be successfully applied to manufacturing sector, could also be potentially applied to service organizations to helps firms create value, in this company in the form of low price ticket for affordable travel. Practical implications – Managers in a similar service industry could use the principles and practices proposed to potentially enhance its operations flexibility. Originality/value – This research is important as for one to understand the main topics of operations flexibility in services sector.