Third-party logistics provider in aviation industry PDF

RUNNING HEAD: TERM PAPER 8.2
Third-party logistics provider in aviation industry
8.2 Term Paper
Edward Tan (2439983)
Embry Riddle Aeronautical University (Asia)
9 December 2019
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RUNNING HEAD: TERM PAPER 8.2
Abstract
Flight catering is a complex food service industry that caters to a wide range of airlines.
Meals provided to passengers are a measure of in-flight service on an airplane. In the case of the
airline industry, flight catering companies are responsible for preparing the meal that flight crews
serve it at a voyaging altitude. This case study examines how SATS collaboration with DHL will
optimise flight catering supply chain. Based on literature review, articles and company
publication, the paper will showcase how DHL will lend their expertise in logistic supply chain
in helping SATS improve their efficiency and business operation.
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RUNNING HEAD: TERM PAPER 8.2
Introduction (Airline Catering Supply Chain)
The inflight service industry has a vast and complex operations. Every year, almost 2
billion passengers are served on board. It has one of the most complex supply chain models in
the world for a number of reasons. Everyday, large international airlines operate between 500
and 1,000 takeoffs and landings. A single A380 or 787 requires thousands of items loaded onto it
before it flies. These items range from meals to toilet paper, from newspapers to headsets. Food
items in most cases are still produced fresh while crew or passenger inflight equipment tends to
be recyclable items. When considering the number of aircraft operating in a single day, with
different cabin configurations and the number of flight route, the logistics challenges is very
clear.
In-flight catering is 80% logistics and 20% catering, and 100% important for your
customers. DHL recognizes that in-flight experience can be a crucial factor in the selection of an
airline (DHL, n.d.). Managing the movement of millions of airline meals from cooking to plane
and the reverse logistics stream of washing up and waste in a highly complex and controlled
world is a daunting problem (DHL, n.d.).With increasing competition among airlines to attract
and maintain customers, and increasing cost pressure, it is difficult to generate significant profits
in a challenging business environment (DHL, n.d.). Airlines sought to reduce costs and improve
yields through restructuring, with leading airlines investigating innovative solutions to deliver
efficiency gains and enhance customer value (DHL, n.d.).
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RUNNING HEAD: TERM PAPER 8.2
DHL
DHL is the logistics industry's leading global brand. The DHL group family offers a wide
range of logistics products ranging from domestic and international parcel delivery, e-commerce
shipment and fulfillment solutions, international postal, rail, sea and ocean transport to industrial
supply chain management (Media OutReach, 2019). Having about 380,000 workers in more
than 220 countries and territories around the world, DHL safely and efficiently links people and
businesses, facilitating global trade flows (Media OutReach, 2019).With tailored services for
growth markets and sectors like engineering, life sciences and healthcare, energy, automobile and
retail, a demonstrated dedication to corporate responsibility and an unrivaled footprint in
developing markets, DHL is firmly placed as the logistics company for the world (Media
OutReach, 2019).
SATS
SATS is the largest food services and gateway service provider in Asia. The food services
provide catering to airlines as well as local food service chains and organisations kitchens
(Media OutReach, 2019). Their extensive gateway facilities include air freight handling,
passenger transportation, ramp handling, baggage handling, aviation safety, indoor and outdoor
aircraft cleaning, and cruise center management. SATS is available in Asia Pacific and the
Middle East at more than 60 locations and 13 countries (Media OutReach, 2019).
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