Airlines Synchronize Logistics With CSC
Client: Air France - KLM Royal Dutch
Challenge: Pursue the first opportunity for the newly merged airlines to enhance relations and work together by synchronizing their logistics management information system.
Solution: The processes were mapped out and an appropriate solution was agreed on. The new system manages the logistics chain, makes forecasts and facilitates management tasks.
Results: The implemented application orchestrates the different data flows and manages the two base stocks from which goods and equipment are shipped across the world. An Internet portal has also been developed for remote management of flows and stocks.
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As the merger of Air France and KLM Royal Dutch took shape, the need to build a new logistics management system gave the airlines one of their first opportunities to enhance relations and learn to work together.
With the help of CSC, the two companies quickly decided to pool resources and develop a common logistics management information system that would be a great source of value and experience.
"This successful project is a springboard for all future initiatives common to Air France and KLM," said Marie-Anne Balle-Calix, logistics manager of Flight Products for Air France.
New partnership, same goal
In any large merger, the teams of two different companies must work together, rising above any organizational, operational and cultural differences. At the same time, passengers on board an Air France or KLM flight still expect a blanket, beverages and meals. For the company, providing this service without the slightest hitch is a particularly complex undertaking.
For Air France, the Flight Product Logistics Department (FPLD) is in charge of managing this service and providing air crews with all the equipment needed on board. The FPLD works in close collaboration with the marketing department, defines all the required technical conditions with the purchasing department, and coordinates a network of more than 400 caterers and suppliers across the globe.
The main daily task is making sure there are sufficient quantities of equipment available on the different bases in the Paris region and at the 200 stopover points used by Air France. With a catalogue of around 800 references, a total stock rotation delay of less than seven days and 200 stocks entrusted to caterers, goods flows are extremely complex. Until recently, the FPLD managed the entire logistics chain (supply, storage, distribution, shipping) using a tool developed in the early 1980s.
"This software tool did not integrate forecast planning and provided no means of alert to help users with their daily management tasks. Furthermore, apart from basic functional enhancements, its outdated technology made it difficult to update," explained Jean-Claude Isabel, head of logistics service and project manager within the FPLD. So, in 2002, Air France commissioned CSC to study the feasibility of a replacement solution and redefine its logistics processes.
A merger and a change of plan
Air France and CSC had already mapped out processes and selected an ERP logistics and forecasting solution when Air France announced its merger with KLM in September 2003. The FPLD teams were keen to find out how their Dutch counterparts managed this same activity.
The Air France and KLM teams dedicated most of 2004 to the merger, while CSC weighed the skills, needs and processes of each. In 1996, KLM had opted for an SAP solution to manage analogous processes and the company was seeking to update its planning software.
Once the overall requirements were agreed upon, the companies decided to create one global SAP solution that would cater to their individual needs. The now international project was one of the very first to mobilize the teams of both companies simultaneously.
A project team from Air France, KLM and CSC was drawn up to pool the resources of business experts, technical architects and IT developers, while the KLM Competence Centre worked to integrate the solution. CSC supported the FPLD as it led the project, helped manage changes and coordinated the common workgroups with Servair, the main caterer and subsidiary of Air France.
"We were determined to organize the project flawlessly from the outset. This way, we were able to help the teams define common goals, draft a project management document with clear definitions of the roles of each participant and establish the collaboration methods and management structures needed to guarantee successful results," said Christophe Lienhard, CSC’s project manager.
The group was able to commission the solution in October 2005, just 12 months after the project commenced. Later that year, the Air France-KLM group, which operates 2,000 daily flights out of Paris and Amsterdam to 225 destinations worldwide, was named "Airline of the Year for 2005" by Air Transport World.
Results meet expectations
At the core of the system, the application orchestrates the different data flows and manages the two base stocks of Air France in the Paris region and KLM in Amsterdam, from which goods and equipment are shipped across the world.
An Internet portal was also developed for remote management. The caterers, like the agents of Air France, connect to the portal on a daily basis to manage their supplies. To train users operating in five continents, an e-learning module was designed with CSC and brought to fruition by the Air France training department.
This core application connects to the tool used to manage on-board products and services via a forecasting module, as well as to the Servair management system. Other tools are soon to be integrated to enable users to refine their management tasks.
The initial results following implementation met expectations in terms of professional integrity and economic profitability. The committee for this project has been retained to continue working on future projects.