Operations & Quality Management: Supply Chain in Cruise Industry

This report provides an in-depth analysis of supply chain management (SCM) within the cruise industry, specifically focusing on Cruise International, Inc. (CII). It begins with an executive summary, highlighting the importance of SCM in delivering services efficiently and effectively. The report defines SCM and explains its relevance to CII, discussing various aspects such as supplier partnerships, the benefits of these partnerships, and potential ethical issues. The core of the report examines the application of SCM principles to CII's operations, including fuel, food, and port services, and the significance of employee training. It explores how SCM can improve service quality and reduce costs. The report also addresses ethical considerations within the supply chain, such as conflicts of interest. The report also includes an APACS analysis and strategies for future development. Ultimately, the report emphasizes the importance of flexibility, collaboration, and information sharing to ensure the success of SCM in the cruise industry, aiming to provide a comprehensive understanding of the factors relevant to the cruise business and how SCM can be applied to CII.

Running head: OPERATIONS & QUALITY MANAGEMENT
Operations & Quality Management
Name of the Student
Name of the University
Author Note

1OPERATIONS & QUALITY MANAGEMENT
Executive Summary
Supply Chain Management is depicted as a procedure that ensures that items and
administrations are passed on to the correct place, in correct condition, with the correct
quality, at the right cost and at the right time. Goal of the report is to have a general
comprehension of factors which is relevant to the cruise business and to analyze the as to
what extent supply chain management is applicable to Cruise International, Inc. (CII). It
addresses the strategies to look for in different stages while partnering with the suppliers. The
report focuses on the strength, weakness, opportunity and threats of the cruise line together
with recommended future development strategies. It permits the understudies to get a
understanding and grasp the ethical issues and consequences faced by the cruise line as a part
of case study and research and give the information and aptitude to attempt explore.

2OPERATIONS & QUALITY MANAGEMENT
Table of Contents
Introduction..............................................................................................................................................3
Discussion................................................................................................................................................3
A comprehensive explanation of the essential concepts of SCM and the extent SCM is applicable to
CII:...........................................................................................................................................................4
Benefits of CII while partnering with suppliers and the issues to be noted:.......................................6
Ethical issues faced while purchasing in cruise line:...........................................................................7
Case Study...............................................................................................................................................9
APACSAnalysis...................................................................................................................................9
Developing Strategies..........................................................................................................................9
Conclusion...............................................................................................................................................9
References..............................................................................................................................................11

3OPERATIONS & QUALITY MANAGEMENT
Introduction
Customers in the modern day look forward to high quality services, different varieties
of experiences, quick delivery, at the lowest prices. To succeed in achieving all these targets
and demands of the customers it is extremely crucial for the business organization to
understand the needs of customers and satisfy their demands in the most efficient way
possible. This policy is applicable to every kind of industry and the cruise industry is no
exception. There is a huge rise in the travel industry in the present day world. According to
the data from Cruise International (2018), the overall number of passenger in cruise industry
has risen from 500,000 in 1970s to about five million in 1990 and 19 million in 2010. In
2006, the extent of the overall voyage showcase was around 12 million travelers. Of those 12
million travelers, 10 million travelers left on voyages from ports in North America. The U.S.
voyage travelers constitute around 78% of the overall cruise travelers and they have around 9
million travelers. Cruise International, Inc. (CII) is a well-known travel organization that
helps travelers to find essentials for a proper travel experience under one roof (Cruise
International 2018). The global cruise industry has grown and is anticipated to rise by 39.6
billion by 2016. Cruise companies tried to successful in meeting their customers’ demands
and carry on its business and have a competitive profit that includes its supply chain
management. The various entertainments, relaxations for the passengers on the ship is the
main service of a cruise for which the customers get into a cruise. For this the customers
expect the cruise to satisfy their expectations. Therefore like every sector in business the
cruise industry looks after fulfilling these demands of the customers.

4OPERATIONS & QUALITY MANAGEMENT
Discussion
Supply chain management involves suppliers, service providers, distributors, retailers
and consumers. In the last few years, the competition between the various cruise
organizations has been focused on vertical (quality) and horizontal (variety and offering).
Supply chain management can be described as a service provider that provides services and
products to the customers at the right time, right place and right quantity and quality. The
University of Tennessee defined it as set of few companies that are directly linked to one
another by an upward and downward flow of products, services, information and finances.
The purpose of this mission is to supply the best services to the cruise customers at the lowest
inventory and working cost. Supply Chain or Production network by and large connects with
providers, specialist organizations, makers, wholesalers, retailers, and buyers. Over the most
recent couple of decades, rivalry among Cruise organizations has picked up in most parts in
the quality and assortment and offerings (Hwang and Han 2014). Supply chain partnership or
store network organization gives Cruise line International different prospects to improve their
business operation, for instance, better administrations at lower cost (Stadtler 2015).
A comprehensive explanation of the essential concepts of SCM and the extent SCM is
applicable to CII:
The SCM demonstrates the ability of the organization to provide proper service and
products to the customers within the fixed time, at perfect place. The quality and the quantity
are also maintained by the organization in the process. Therefore, the process can be defined
as the two entities linked by flow of products or services. The supply chain management can
be different types such as a manufacturing unit will supply its products by making it as per
the demand of the company. Furthermore, the other organizations will supply the product by
understanding the need of the organization and supplying product by ordering to another

5OPERATIONS & QUALITY MANAGEMENT
manufacturing unit. Therefore, according to the concepts of SCM, it incorporates everything
from raw materials to finished products.
Supply chain management is the organized way to manage the flow of the good, fuels,
raw materials needed by the organization. Cruise line international would utilize the supply
chain management in areas like fuel, food supply, Coach Services, Port Services, warehouses,
which can be given to the customer for the best experience on their voyage (Staff 2018).
Hotel accommodation is a service that is needed by the clients of cruise international and to
make the company focus on its core business, this service can be provided by another
business firm that deals with hotel accommodations in the supply chain. Financial Services,
ticket arrangements and Insurance Services can moreover be given by cruise line
International to its clients through Agencies. Services like maintenance of the cruise
including its cleanliness, maintaining its electrical equipment, machines, Machinery,
Lubricants, Internet and Information Technologies can be contracted to another business
which specializes in these fields so that the Cruise Ships get the best association which
would affect customers to remain on the voyage happily. Recruiting new employees and
providing them training is crucial for the success of this industry. It is important for the
organization to respond to the need of customers as well as understanding the requirements of
the employees as employee satisfaction and loyalty determines the ability of the service.
Therefore employee training is used to widen the employee’s ability to engage them in the
teamwork. This will further help them to increase their professionalism and commitment
towards their duty. This is because this training and influential process for employee and
customers satisfaction can be applied in the Cruise International organization as the SCM of
the organization can be applied to a broader section. Various studies reveal that workers who
are trained have higher amount of job satisfaction than the ones who are not trained. Training
increases the employee’s satisfaction and higher productivity. It improves their skill,

6OPERATIONS & QUALITY MANAGEMENT
increases their professionalism and has an impact on their employee commitment and
satisfaction in the organization. In this way it can be easier for the cruise line organization
since they have various working site including onboard and multiple harbors. Supply chain
management in the cruise industry will require faith and collaboration amongst all of their
supply chain partners. There needs to be greater flexibility, a close business collaborative
system with efficient strategies, planning and information sharing at every levels. The failure
of any single level of supplier to supply its service or products at the correct time and place
when required can give rise to several problems for the management and operation of the
entire business which can have its impact on all the others levels like a chain reaction and
lead to service disruptions in the cruise company and their customers. This can make the
company suffer a serious deal of issues in its professional role and image in the market.
Hence, it can be said that SCM should be applied on the cruise industry to increase
and develop the belief and trust of entire SCM partners, as in this business strategy, planning,
and sharing of information decides the success of the organization.
Benefits of CII while partnering with suppliers and the issues to be noted:
Partnership by cruise line international with its suppliers give them the best chance to
improve their various operations for example delivery of services at lower cost, sharing
information, solving problems, allocating resources, sharing financial and non-financial risks
decrease in operating costs quick reaction to market needs are some of the reasons that make
supply chain partnerships important. The companies that have supply chain partners are more
efficient in their outputs than those companies that do not have such supply chain. Hindley
and Font (2017) included that smart relationship among manufacturers and suppliers affects
the performance of supply chain. Cruise must first recognize its partners who would give
them the best services at the best prices. Having a supplier as a partner might seem nice but it
has several benefits like training, systems, work methodologies, equipment utilization and

7OPERATIONS & QUALITY MANAGEMENT
several other opportunities that decrease the cost of operations benefiting the management
and the quality of the operations (Hindley and Font 2017). Cruise line worldwide would
likewise profit in territories, for example, access to new markets and clients, resulting in its
prosperity and development quickly. Other advantages include assets and Tools, for example,
present day advances which would not be possible for Cruise Line International to secure
such assets independently (Véronneau, Roy and Beaulieu 2015). The organization will profit
by preparing that would empower making it smarter, more productive and beneficial business
through the expertise of the other businesses in the supply chain. There will be the beneficial
installment terms, allowing the Cruise line to place bigger orders and fuel growth, without
paying additional money. An example of such benefit is the usage of technologies and
different Media for the transfer and advertisement of the products that are to be supplied to
different organization. The transport management software for the digital transfer of the
products, usage of radio frequency identification number for the product transfer and usage of
social media to find social chain operators are few of the benefits of partnering with
suppliers.
In an industry that is continually hoping to enhance services and products provided to
their customers, the future will depend especially on working intimately with providers and
sellers to set up the best journey experience to its customers (Pallis2015).
Ethical issues faced while purchasing in cruise line:
It is very common to face a conflict of thinking and processes and ethical
considerations in a supply chain management system. For example if a manpower working in
the CII supply chain management works for some other companies SCM and leaks the
information of the CII, then it can arise a situation of ethical conflict in the organization.

8OPERATIONS & QUALITY MANAGEMENT
While working in CII, the ethical conflict can arise in different situations, few of which is
described below (Cruise International 2018).
1. Outside contracts in zones similar to those of Cruise Line worldwide.
2. Affiliations with non-profit associations that get subsidies or different methods for
help from Cruise line global.
3. The acknowledgment and additionally stretching out of any business cordialities.
4. Being highly associated with private, professional, political, scholastic or other
interest that may clash with Cruise line universal interests (Stadtler 2015).
5. Private business associations like partnerships, shareholdings, board participation or
investments that might do business or might compete with Cruise Line universal.
It is unethical for Supply chain professionals to use their positions to have unfair
advantages (Hindley and Font 2017). Potential clashes can rise from family, business,
individual or budgetary associations. The workers attached to the supply chain must maintain
a safe distance from the chances of any such kind of conflicts. Areas that can result in clashes
are other employer’s gifts, business meals, relationships, product samples, advertising,
market power and standards.
Individuals from the production network must stay away from practices or activities
that may adversely impact, or seem to impact, supply decisions before the commencement of
supply chain services. Every year, Supply Chain Management requires all partners in to
finish and sign a Conflict of Interest as well as Commitment Disclosure Form. Individuals
ought to inform the individuals concerned for suggestions and guidance when a potential
irreconcilable circumstance emerges (Staff 2018). At the point when vital such individuals
must be reassigned to different duties which are proper would not represent a danger of
another irreconcilable situation. Therefore while working in the supply chain management,

9OPERATIONS & QUALITY MANAGEMENT
different code of ethics such as professionalism, personal integrity, compatibility and
continuous improvement should be followed.

10OPERATIONS & QUALITY MANAGEMENT
Case Study
APACS Analysis
Problem Alternative Solutions Advantages Disadvantages
High increase in
ticket price
Alternative cheap
resources to cut
down prices
A decrease in
ticket price will
attract many
travelers
Cheap resources
may question the
quality of service
provided n the cruise
(Staff 2018).
Currency devaluation
and Long term debt
on new ship
construction
Promotion of
business, increase in
profit margin,
innovative and
attractive ideas to
attract travelers
Devaluation of
currency resulted
in purchasing at a
lower price from
the suppliers
Business loss and
raising debt.
Developing Strategies
Liozu and Hinterhuberv (2013) say that the cruise international should focus more on
expanding its client base rather than on making profit. This can be done by understanding the
needs of customers demographically and psychologically instead of looking after ways to
increase their profit margins. Once they win over the customer’s loyalty and needs they can
later think of ways to develop their pricing strategies. Fulfilling their social duty should be
more important to the cruise and not just their own income. Understanding the demands of
the clients and fulfilling them and giving them an experience of delight would in the long run
be beneficial for the company even if for that in the present they might have lower profit
margins. This form of esteem based marketing is extremely popular in travel industry.

11OPERATIONS & QUALITY MANAGEMENT
Conclusion
Cruise Line International seeks to satisfy their clientele and fulfill it’s the various
consumer characteristics of different age with an assortment of on-the-ship and ashore
benefits. The organization's production network association will build benefits for all
accomplices by lessening absolute cost of operation and enhancing the nature of
administrations. There is a potential for irreconcilable situation in store network
administration, yet an arrangement and nonstop checking will limit its impact. Supply chain
network is an imperative bit of the Cruise operations that is by and large required in the pre-
embarkation, on the ship and the post disembarkation parts of the business. The supply chain
of the cruise must be capable and monetarily clever with a specific goal of delivering the
demanded quality service on the right time to make its customers experience a memorable
stay.

12OPERATIONS & QUALITY MANAGEMENT
References
Cruise International 2018. welcometocruiseinternational.[online] Available at:
http://1952008_1781944965_WELCOMETOCRUISEINTERNATIONAL%20(1).pdf
[Accessed 22 Jan. 2018].
Hindley, A. and Font, X., 2017. Ethics and influences in tourist perceptions of climate
change. Current Issues in Tourism, 20(16), pp.1684-1700.
Hwang, J. and Han, H., 2014. Examining strategies for maximizing and utilizing brand
prestige in the luxury cruise industry. Tourism Management, 40, pp.244-259.
Liozu, S.M. and Hinterhuber, A., 2013. Pricing orientation, pricing capabilities, and firm
performance. Management Decision, 51(3), pp.594-614.
Pallis, T., 2015. Cruise shipping and urban development: state of the art of the industry and
cruise ports. International Transport Forum Discussion Paper.
Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management
and advanced planning (pp. 3-28). Springer Berlin Heidelberg.
Staff, C. 2018. F&B Supply Chain Management: Global Master Plan. [online]
Cruiseindustrynews.com. Available at: https://www.cruiseindustrynews.com/cruise-
magazine/feature-magazine-articles/11293-summer-2014-fab-supply-chain-management-
global-master-plan.html [Accessed 22 Jan. 2018].
Véronneau, S., Roy, J. and Beaulieu, M., 2015. Cruise ship suppliers: A field study of the
supplier relationship characteristics in a service supply chain. Tourism Management
Perspectives, 16, pp.76-84.