BTM5PRO Priniciples of Operations Management Assignment 01

Assignment Requirements

Overview

This assignment involves preparing a 4,000-word case study report on your understanding of Operations Management (OM). You are required to use theories, concepts, and contemporary practices to support your argument. Use examples from the case study (TUI Group), further research, and the tourism industry where necessary to demonstrate a clear understanding of the theories, concepts, and contemporary practices of OM and why they are important for organisational performance. The report must be submitted in Microsoft WORD format. You must include appropriate in-text citations and references according to the CCCU Harvard Referencing Style.

Assignment Tasks to be completed 

Case Study: TUI Group

TUI Group stands as one of the leading tourism companies globally, with operations extending across the world. Headquartered in Germany, TUI serves over 19 million customers by offering comprehensive services from a single source. It integrates the entire tourism value chain within one organisation. This encompasses more than 400 hotels and resorts under prestigious brands such as RIU, TUI Blue, and Robinson. Additionally, the Group operates 17 cruise ships, including luxury vessels like the MS Europa and MS Europa 2, expedition ships, and the Mein Schiff fleet of TUI Cruises, as well as Marella Cruises in the United Kingdom.

TUI's extensive portfolio also features leading tour operator brands and online marketing platforms across Europe, alongside five airlines that collectively operate over 130 state-of-the- art medium and long-haul aircraft. The Group is supported by approximately 1,200 travel agencies. While expanding its core offerings in hotels and cruises through successful joint ventures and activities in holiday destinations, TUI is placing increased emphasis on the development and enhancement of digital platforms.

Over the past two years, TUI Group has achieved significant growth, driven by strategic investments in distinctive hotel and cruise offerings, alongside advanced IT platforms. This growth has enabled the company to make a robust recovery from the challenges posed by the COVID-19 pandemic. By consistently meeting customer expectations through timely services and exceptional hotel experiences, TUI has demonstrated its commitment to quality, reflected in a Net Promoter Score of 52 achieved in April 2024.

The Group maintains a strong focus on delivering high-quality experiences while simultaneously enhancing choice and flexibility in its offerings, including flight options and hotel sourcing. TUI aims to expand its core product range by complementing its traditional package deals with dynamic packages and single-component options. This strategy is designed to provide customers with greater variety, deliver more personalised experiences, and uphold its reputation for outstanding customer service.

A key strategy to achieve these objectives involves the creation of a new organisational structure within the Markets and Airline division. The marketing division will operate under centralised management, ensuring integration across regions, which will streamline operations and maximise resource utilisation. At the same time, regional teams will concentrate on addressing the specific needs of local customers, overseeing flight capacity, trading, distribution, and localised marketing initiatives.

This reorganisation aims to make the company more agile and scalable, providing customers with enhanced booking flexibility and access to a broader range of products. Such transformation is poised to support TUI's global growth ambitions. Additionally, TUI Group seeks to further expand its ability to deliver high-quality holiday experiences by investing in partnership models and joint ventures with organizations like Expedia, National Geographic, and Love Holiday. Through this collaboration, Love holiday customers will gain the opportunity to book National Geographic Day Tours, which have been developed in partnership with TUI and National Geographic Expeditions.

To standardise its processes, TUI is enhancing the digital customer experience by introducing a unified customer account. This includes implementing a standardised payment system, providing access to a comprehensive suite of products, and expanding the number of touchpoints for holidays and experiences to better engage customers. In the competitive airline industry, TUI has focused on achieving cost efficiency by streamlining its fleet, reducing the number of aircraft types from several to just three. This approach is supported by the implementation of a centralised fleet management system, which fosters cross-functional collaboration, and the establishment of a single maintenance operations control centre.

Additionally, TUI is consolidating and standardising other operational and financial systems to adopt a more data-driven approach. In TUI Musement, a new system for managing employee expenses and liquidation has been introduced across various countries. This system ensures uniformity, promotes consistent data entry, enhances flexibility, and improves expense control.

Within the Markets & Airline segment, TUI Group has expanded the volume of dynamic packaging and supply, enhancing choice and flexibility for customers without increasing operational costs. One way this was achieved was through a partnership with Ryan Air in February 2024, which provides TUI customers with a broader selection of flight options when booking their trips. To further optimise operations, TUI is developing a centralised capacity demand management function to improve seat supply for both in-house and third-party carriers.

TUI's people strategy emphasizes fostering a digitally inclusive and engaging work environment. This includes establishing a framework designed to empower employees to perform at their best, collaborate effectively as a team, and enrich the overall employee experience. In 2024, as part of this initiative, 30,000 employees received training in generative Al, equipping them with forward-looking skills to support future growth and innovation. To enhance customer experience, TUI has partnered with analytics experts to collect and analyse data on successful searches, errors, and checkout progress. Insights derived from this data have driven TUI to implement strategic changes, resulting in improved profit conversion rates. By leveraging data intelligently, TUI ensures a more reliable and consistent customer  journey, consistently exceeding customer expectations.

Operating in the price-sensitive tourism industry, TUI Group spans multiple components of the value chain. To maintain profitability, deliver customer value, and foster strong partnerships, TUI transitioned its ERP financial system from Oracle to SAP in 2020 to achieve more efficient process automation. However, the scale and complexity of TUI's operations presented challenges, including the need to process over 5 million supplier invoices annually. This automation initiative is designed to help senior management gain better cost insights, improve invoice accuracy, and promote synergy across various business locations. Eliminating manual processes has not only saved time and effort but also streamlined financial information consolidation.

Sustainability has emerged as a central focus for TUI Group, with the organization leveraging its global reach to drive the sustainable transformation of the travel industry. As part of its 2030 sustainability agenda, TUI aims to achieve significant emissions reductions: 24% for its airline operations, 27.5% for its cruise business, and 46.2% for its hotels and resorts. These goals will be accomplished through measures such as fleet renewal, the adoption of sustainable aviation fuels, energy-efficient ship operations, increased use of renewable energy, and resource-saving practices.

TUI is also committed to ensuring that local communities benefit from tourism by empowering changemakers with the skills and knowledge necessary to innovate and transform the industry. Working in collaboration with its partners, TUI is dedicated to helping customers make sustainable holiday choices throughout their travel journeys.

To sustain continuous growth, TUI's strategy is centred on delivering differentiated product offerings, expanding the size and value of its customer ecosystem, and enhancing its brand image. This includes increasing operational and customer flexibility, advancing digital applications, and optimizing efficiencies and synergies across its business operations.

WHAT YOU ARE BEING ASKED TO DO?

You are required to study the case and then write a report of 4,000 words (this can be over or under by 10%, i.e., 400 words) about your analysis of the case organisation:

• Discuss how TUI Group manages its operations and outline the key processes involved. 
• Explain the objectives of process design, how TUI Group achieves these objectives and the benefits to their processes.
• Evaluate how TUI Group enhances the customer experience and what strategies can be used to further enhance customer experience.
• Examine the strategies TUI Group uses for planning, control, and quality management in its operations.
• Analyse how TUI Group addresses, sustainability and suggest potential improvements in responsible operations.