Supply Chain Strategy Improvement Plan for Emirates Airline

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Strategy Supply Chain and Logistics
Management
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Executive Summary
Supply chain management plays a key role in the success of an organization as it enhances its
efficiency along with its performance. The latest developments in information technol.ogy have
aided the organizations to grow since it has made their tasks easier. There are several factors
drives organizations to achieve integrated strategy of supply chain. Therefore, a plan for the
development of a new supply chain strategy has been created. It has focused on the development
and optimization of product designs and management so that the challenges can be eradicated
hassle free. There are several internal and external barriers, which could affect the
implementation of the supply chain improvement plan. For instance, cost, resistance from
existing employees could be the internal barriers. On the other hand, the resistance from
suppliers and inflation could be the barriers for the organization to implement the improvement
plan. Adequate ways for resolving the barriers have also been provided here.
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Table of Contents
Introduction of the Chosen Organization........................................................................................4
Explain the importance of effectiveness of supply chain management in achieving organizational
objectives and the link between supply chain management and business functions in the
organization. What is the supply chain strategy of the organization and discuss the key drivers
for achieving an integrated supply chain strategy ? (AC 1.1, 1.2, 1.3)...........................................5
Assess and evaluate how information technology has contributed in effective management and
integration of various parts of the supply chain management. Explain the strategies employed by
the organization to establish relationship with the suppliers and evaluate them. Discuss how IT
can be used to develop systems and strategies to enhance and maintain the relationship with
suppliers. (AC 2.1, 2.2, 2.3, 3.1, 3.2, 3.3)....................................................................................11
Evaluate the procurement practices in the organization and the role of logistics in effectively
managing the supply chain management in the organization. Also, discuss the factors to be
considered to help improve the logistics and procurement practices in the organization. (AC 4.1,
4.2, 4.3)..........................................................................................................................................17
Propose a plan with a strategy to improve the organization’s supply chain and assess how the
proposed strategy will benefit the overall business performance of the organzation....................23
Identify the internal and external barriers and explain how the barriers would be overcome when
the proposed strategy is being implemented. (AC 5.1, 5.2, 5.3)...................................................28
Findings, conclusions and recommendations................................................................................32
Reference List................................................................................................................................34
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Introduction of the Chosen Organization
Emirates Airline is one of the organizations, which have entered the market, with the vision of
becoming the market leader, in the global aviation industry. The Emirates Airlines is a Dubai
based airlines, situated in Dubai, United Arab Emirates. The airline is a subsidiary of the
Emirates Group, owned by the government of Dubai’s Investment Corporation of Dubai. The
organization launched its action in 1985 (Emirates.com, 2019). Since the time, the organizational
growth reached enormous size in regards to the traveler carried, aircraft in its fleet or value of the
brand. It is the largest airline in the Middle East, which is operating more than 3600 flights every
week at the Dubai International Airport. It is ranked as the fourth largest airlines in the world, in
terms of the “scheduled revenue passenger-kilometers flown”, “international passengers carried”;
whereas, it is the second largest airlines in regards to “freight ton kilometers flown”. This airline
has a record of increasing profit every year, except the second year. In every 3.5 years the
organization has doubled in its size. The organization is offering diversified services related to
the airlines industry, including “airport service, catering, engineering and tour operations
service”. It has 7 subsidiaries, with total 38797 staffs, estimated in 2011. The following
assignment is going review the supply chain and logistic activities of the organization and would
provide an improvement plan for the airlines organization.
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Explain the importance of effectiveness of supply chain management in achieving
organizational objectives and the link between supply chain management and business
functions in the organization. What is the supply chain strategy of the organization and
discuss the key drivers for achieving an integrated supply chain strategy ? (AC 1.1, 1.2, 1.3)
Importance of effectiveness of supply chain management in achieving organizational
objectives
Supply chain management can be defined as the organization and administration of movement
of products and services (Christopher, 2016). Supply chain management covers the entire cycle
of movement of goods, that is, the storage as well as flow of raw materials, records or list of
work-in-process along with the movement of manufactured goods up to the point where it is
consumed. The movement of materials, to its processing finally up to the points where the goods
are manufactured and consumed by the customers is known as supply chain management.
Emirates Airlines are a well-known airlines organization with along network that provides its
customers a comfortable and convenient journey.
The objectives of Emirates Airlines have been mentioned below:
 To maintain its international reputation as a leading airlines organization that provides secure
and comfortable services and journey to its customers (Emiratesgroupsecurity.com, 2019).
 To set an example of providing excellent services to its customers in the aviation industry
 To safeguard its customers, employees as well as assets against any interference that is
unlawful through training, education as well as continuous feedbacks
 To execute practices that meets the international standards
Supply chain management mainly aims to enhance the performance of an organization by
monitoring the movement and flow of goods as well as service, right from the point where it
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started up to the point where it reaches and gets consumed by the customers. The objectives of
supply chain management have been listed below:
 To magnify or augment the total value that is generated
 To enhance the efficiency of the organization (Monczka et al., 2015)
 To enhance logistics as well as transportation
 To improve the quality of services and goods that are offered by an organization
Role of supply chain management in Emirates Airlines
Emirates Airlines is one of the world’s best emerging airlines organization in the aviation
industry. The needs and demands of customers have been increasing all around the world that
has stimulated the organization to deliver excellent services to its customers. Supply chain
management plays a crucial role in determining the success and progress of an organization
especially in case of multinational companies. Emirates Airlines has developed as well as
executed an integrated assembly of services such that 3PL and 4PL services can be delivered
smoothly. In order to proceed towards success it is necessary for the organization to emphasize
on warehouse distribution (Emirateslogistics.net, 2019).
The organization has collaborated with several organizations in several countries, however, the
organization is mainly emphasizing on the Middle East countries such that it can enhance its
efficiency and set standards in terms of its performance for other airlines organizations in the
aviation country. The organization has developed a specialty such that the appropriate approach
can be used and implemented. The strategies that the organization has devised and implemented
emphasizes on IT as well as WMS (Warehouse Management Service) along with qualified
effective employees.
Link between supply chain management and business functions in the organization
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Supply chain management plays a crucial role behind the success of an organization as it aids to
increase its efficiency and leverage its level of performance. A survey conducted by Deloitte in
2014 stated that approximately 79% of organizations achieve growth in revenue that is more than
average if its supply chain is managed adequately and exhibits high level of performance
(Logisticsbureau.com, 2019). Only 8% organizations have exhibited growth that is above
average with poor and inefficient management of supply chain. Most of the organizations close
within a period of 5 years when it is established due to poor performance of its supply chain.
Thus, the links that supply chain management has with business functions have been mentioned
below:
 Forecasting or predicting the requirements of customers, along with the management of
capacity. This aids an organization to enhance its efficiency as it aids to evaluate the patterns
of demand of the customers thereby aiding the organization to address the maintenance of
engines, logistics and others. Thus, supply chain management aids Emirates Airlines to
manage its inventory efficiently and meet the demands of the customers effectively.
 Manage and administer the cycle of Material Request such that the requests can be evaluated
and analyzed such that the orders can be fulfilled effectively (Handfield et al., 2015). The
overall management of lifecycle of products and goods offered by an organization are
optimized by utilizing tools of Supply Chain Management. It aids to manage the delays that
occurs while processing raw materials and manufacturing goods and products. It aids to set
priority of various works and tasks that are to be performed along with the management of
statistics of warehouse.
 It is used to determine stock accuracy along with the evaluation and analysis of inventory or
lists. It aids to determine the values of items along with its quantity. In Emirates Airlines, it is
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necessary that inventory be optimized since aviation industry has low margins of profit and
requires lots of capital. The values as well as the quantity of stocks are evaluated as well as
analyzed such that its inventory can be managed and administered effectively.
 The history of consumption, expenses on maintenance and others need to be tracked and
recorded such that the expenses of operations as well as capitals can be planned effectively.
Key performance indicators are used along with dashboards such that the strategies regarding
the expenses can be done effectively.
 Supply chain management aids Emirates Airlines to manage stocks, bills and invoices with
accuracy such that the invoices can be administered on a distinct platform, where the
invoices are from several vendors or suppliers based in various countries. It makes sure that
the quality of items is checked effectively along with the dispensation of bills on an
incorporated surface (Maestrini et al., 2017).
 Supply chain management tools enable Emirates Airlines to track the lifecycle of its aircrafts
by using alerts to predict. It enables the organization to track its items on a normal basis such
that critical items can be replaced in case any item is out for maintenance. 444
Supply chain strategy of the Emirates Airlines
Emirates Airlines has enhanced influence as well as visibility globally as several countries all
over the world are recognizing the importance of airlines economically along with the
investments that are made on infrastructure. In order to enhance its level of performance,
Emirates Airlines has emphasized on its strategies of supply chain management such that it can
offer better timings of connection and better experience for its travelers. In order to enhance the
performance of Emirates Airlines the organization has developed its network strategy
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(Emirates.com., 2019). The organization collaborated with Qantas and JetBlue such that tourists
and travelers can be connected efficiently.
The organization Emirates Airlines has started developing international connection such that its
operations can be supported. The organization has widespread coverage of regions and provides
3PL (Third Party Logistics) in the regions, it covers. The organization uses solutions of supply
chain of international standard along with effective warehouse as well as distribution. The
organization is striving and putting in sincere efforts such that the needs of customers can be
satisfied using and delivering Third Party Logistics (3PL) and Fourth Party Logistics (4PL)
solutions (Emirateslogistics.net, 2019). The organization takes its services from Emirates
Logistics such that the organization can be successful in its endeavors. The organization has
collaborated with several organization Dubai such that its customers can be provided with
infrastructure of international standards.
The key drivers for achieving an integrated supply chain strategy
The key drivers that play an important role in an organization to achieve and integrated strategy
of supply chain have been described below:
 Competition: The competition that Emirates Airlines faces from other airlines organizations
in the aviation industry plays a key role in determining the strategy of supply chain as it aids
an organization to estimate or figure out the areas that needs to be focused. This aids an
organization to improve its performance thereby delivering satisfactory services to its
customers (Palma-Mendoza and Neailey, 2015).
 Inventory: Emirates Airlines is driven by the quality as well as the volume or quantity of
items it has such that the flow of materials can be aptly recorded. This aids the management
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of the organization to devise plans for capacity management and manage the movement of
goods from the point of origin up to the point where the customers finally consume it.
 Consumer awareness: The awareness that the consumers have, in other words, the visibility
that the organization has determines the strategy of the organization related to supply chain
management (Taneja, 2017). The organization devises its strategies with respect to supply
chain based on the demands that the consumers make and the needs or desires they have.
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Assess and evaluate how information technology has contributed in effective management
and integration of various parts of the supply chain management. Explain the strategies
employed by the organization to establish relationship with the suppliers and evaluate
them. Discuss how IT can be used to develop systems and strategies to enhance and
maintain the relationship with suppliers. (AC 2.1, 2.2, 2.3, 3.1, 3.2, 3.3)
Effectiveness of strategies used by an organization to maintain supplier relationships
Efficient management and administration of suppliers enhances the performance of organizations
as it enables the organization the devise efficient strategies of sourcing and exchange information
and data effectively such that relationships with suppliers or vendor can be managed efficiently.
Supplier relationship management can be termed as the efficient administration an organization
has with its vendors. It aids an organization to minimize the waste that is generated and reduce
the cost of production. The strategies that organizations can use in order to enhance relationships
with suppliers have been explained below:
 Strategies related to commodities and JIT: Emirates Airlines can maintain effective
relationships with its vendors by determining the commodities that it requires for its effective
operation. The organization must fathom the demand of the commodities or items such that
the commodities having low-risk can be separated from commodities having high-risk. It will
also aid the organization to segregate low quantity purchases from high-quantity purchases
thereby aiding the organization to differentiate strategic as well as critical items
 Choose effective suppliers for growth: Emirates Airlines must select vendors such that its
position in the market can be improved by enhancing its competitiveness
(PurchaseControlSoftware.com, 2018). This will assist the organization to develop and
maintain healthy relationships with its vendors that in turn will aid the organization to
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increase its profitability by enhancing its competitiveness. The strategy and deals of mutual
benefits proves to be beneficial for both the supplier and the organization.
Information technology to create strategies to develop an organization’s relationship with
its suppliers
Information technology and its development have completely changes the scenario of
organizations as it has changed the way of operation and administration of organizations.
Information technology and advancements in this field can aid Emirates Airlines to create as well
as enhance its relationships with its vendors or suppliers in the following ways:
 The latest development in the field of Information Technology (IT) like Artificial
Intelligence (AI), has aided the buyers to connect closely with its buyers by feeding big data
into software. Emirates Airlines can utilize Artificial Intelligence (AI) and Big Data in order
to improve its relationship with its vendors (Witkowski, 2017).
 The organization Emirates Airlines can use powerful software of procurement such that it
can track or supervise the performance of its vendors in real-time. It can aid the organization
to determine that if its vendors are supplying the materials of requirement on time and are
following the rules that were signed while dealing or signing agreements.
 Software of purchase order management can be used by Emirates Airlines to develop,
practice and trace the purchase orders that it makers with its vendors. The software solution
as Purchase Control can aid the organization to incorporate the solutions of management of
suppliers on a solo platform (Gunasekaran et al., 2017).
 Information technology can aid Emirates Airlines to exchange accurate data and statistics
with the supplier such that the deals they make and the strategies they devise are effective.
Systems to maintain an Organization’s relationship with its Suppliers
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