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Productivity through Visibility

One of the worlds largest, publicly traded, European based airlines, wanted to drive system wide practices that would deliver worldwide productivity changes, process improvements and reduce costs across the supply chain.

Working in a collaborative environment with our client was a challenge. Although one enterprise, they are comprised of two separate operating divisions both requiring a consistent global solution to their logistics needs. With the introduction of computerized planning and ordering systems, the need for reliable transit times, availability of product, while maintaining a controlled cost environment was critical.

Challenges & Objectives

The challenge was to deliver solutions to reduce inventory levels, improve customer service standards, and create productivity tools that drive supply chain visibility.

Strategy

Our direction was to work closely with the business units, and field personnel, while benchmarking similar practices with existing clients in the same industry. Simultaneously, we used our knowledge, expertise and disciplines from other industries (i.e., high tech and telecommunications industries) to formulate our deliverables.

Customized Solution

A door-to-door seamless service provided for both the airlines catering and engineering entities that incorporated the mandatory business requirements of the end customer, and intermediaries into a cost effective, symbiotic product.

Our customers challenge was to stay focused on the critical success factors of: continuous improvement, value analysis, improved forecasting and cross-functional improvements, while utilizing assets efficiently, and providing cost performances that added value and made sound business sense. Success would be based on the ability to adapt to rapid change, inventory reduction, and the improvement of customer service levels by providing supply chain visibility.

Their industry catering division supplies 300 product lines including consumables, rotable equipment, dry goods and bonded alcohol from a centrally based distribution center, to caterer's worldwide for use on outbound aircraft.

Our solution was to manage the orders from a central hub in London and deliver catering products directly to local caterers (airside) at the airlines worldwide facilities. These timed deliveries were based on needed stock (demand) to support keeping the airlines flights stocked and ready for deployment.

In addition, the airlines engineering services environment demanded the movement of urgently needed parts (A.O.G.'s) on a 24/7/365 basis. This included a requirement to provide visibility, especially for the urgent consignments. A requirement for a reduction in transit times and a scheduled program to accommodate routine maintenance orders, were mandates by both the internal and external customer.

Expeditors provided a global door-to-door aircraft spares program destined for maintenance facilities at worldwide airports. These critical spares required local Expeditors staff to facilitate customs clearance 24/7, and arrange local delivery (airside) so engineers could perform on-ground maintenance.

In both cases, we took a full view approach to the processes and product flows involved in both business entities and process mapped existing business protocols.

We provided stability to the business, (customer and their suppliers), while achieving global consistency. Our success was aided by adhering to agreed standard operating procedures, transition and implementation plans, visible to all via a shared intra-net/extra-net arrangement. The client realized cost reduction benefits that extended across the entire supply chain.

In 1999, this global carrier rated Expeditors service as 'Excellent'. We were then awarded the catering supplier of the year from a field of over 600 suppliers, for helping them achieve their challenge of delivering the most supply chain improvements.

This successful program is measured by agreed and implemented KPI's (Key Performance Indicators). For the engineering group, a combination of process standardizations, cycle time reductions and landed cost reductions helped deliver a savings of nearly USD $1.0 million per annum.

Within the catering environment, incremental costs rose slightly, but overall supply chain costs diminished which was a direct benefit of process re-engineering, process improvements, product visibility and adherence to customer demand dates.

Both entities benefited from time and cost savings by the formation of a centralized billing processes and procedures center that drove quality standards, accuracy, consistency and dependability.

In Summary, importation initiatives were organized to reduce customs fines, minimize duty liability and introduce processes to lessen liability, enabling both groups to realize:

  • Leveraged transportation purchasing
  • Reduced inventory
  • Improved distribution processes-channels
  • Improved sourcing decisions (verified from transportation, labor, and tax studies)
  • Defined and reliable cycle times
  • Visibility of product from order to delivery
  • Reduction of stock within the clients supply chain
  • Identified costs drivers: managed, measured, and reduced

Results

  • Visibility: 100%
  • Overall Supply Chain Cost Reduction: 40%
  • Customer Satisfaction: 100%