Scm at Cathay Pacific
“AVIATION SPARE PART SUPPLY CHAIN MANAGEMENT OPTIMISATION AT CATHAY PASIFIC AIRWAYS LIMITED” CASE STUDY
GLOBAL LOGISTIC COURSE ASSIGNMENT Prof. Hiroshi Hoshino
Umurbek Osorkhan 2EC12056R QBS 10th 5 November 2012
1
Company Overview Cathay Pacific Airways is an airline company founded on September 24th, 1946 by Roy Farrell and Sydney de Kantzow. Starting with a very limited schedule service, the company grew larger through multiple product innovations, technological investments such as the computerized reservation system and successful acquisitions. In 1986, Cathay Pacific went public and further expanded in Europe, North America, and China. The company employed over 25000 people worldwide, serviced over 43 destinations throughout Asia, Europe and North America, and carried more than 16.7 million passengers in 2006. 1. Why is good supply chain management of spare parts so critical for an airline? Supply chain management has become one of the crucial competitive advantage in today`s organizations. Finding opportunities in supply chain can make companies unique and different from competition. Today more and more companies are trying to manage their supply chain in an effective and efficient manner in order to provide better services at lower cost. Unlike other industries, the aviation industry known as highly regulated1 industry and the aviation spare parts 2 are very complex3, large amounts of money are invested in spare parts inventory and this has increased over the years. Because of these large amounts of money involved, there is great interest in cost savings, and even savings of a few percents only constitute large cost savings in absolute terms. This case study shows us how Cathay Pacific Airways successfully manage their supply chain in an optimal manner, despite some circumstances. According to the case study there were several points that good supply chain management of spare parts so critical for commercial airline operators. We can briefly
GLOBAL LOGISTIC COURSE ASSIGNMENT Prof. Hiroshi Hoshino
Umurbek Osorkhan 2EC12056R QBS 10th 5 November 2012
1
Company Overview Cathay Pacific Airways is an airline company founded on September 24th, 1946 by Roy Farrell and Sydney de Kantzow. Starting with a very limited schedule service, the company grew larger through multiple product innovations, technological investments such as the computerized reservation system and successful acquisitions. In 1986, Cathay Pacific went public and further expanded in Europe, North America, and China. The company employed over 25000 people worldwide, serviced over 43 destinations throughout Asia, Europe and North America, and carried more than 16.7 million passengers in 2006. 1. Why is good supply chain management of spare parts so critical for an airline? Supply chain management has become one of the crucial competitive advantage in today`s organizations. Finding opportunities in supply chain can make companies unique and different from competition. Today more and more companies are trying to manage their supply chain in an effective and efficient manner in order to provide better services at lower cost. Unlike other industries, the aviation industry known as highly regulated1 industry and the aviation spare parts 2 are very complex3, large amounts of money are invested in spare parts inventory and this has increased over the years. Because of these large amounts of money involved, there is great interest in cost savings, and even savings of a few percents only constitute large cost savings in absolute terms. This case study shows us how Cathay Pacific Airways successfully manage their supply chain in an optimal manner, despite some circumstances. According to the case study there were several points that good supply chain management of spare parts so critical for commercial airline operators. We can briefly