So there you are, o’dark thirty and your flight is about to take off. Do you have any idea what types of services a typical airline procures to make that flight happen, besides buying or leasing the plane in the first place?
Aircraft servicing and cleaning
Airport aviation security
Cargo and mail (on/off-airport) including warehousing and document handling
Catering services
De-icing
Executive aviation handling and VIP services
Flight operations and crew administration
Fueling
Irregularity operations support
GSE (Ground Support Equipment) or AGE (Aerospace Ground Equipment) maintenance
Load control
Lost and found facilities and systems
Operation of airport lounges
Passenger handling with check-in, gate, departure, arrival and transfer services
Ramp services including baggage handling/sorting, GPU, pushback and others
Representation and accommodation
Surface transport of passengers and crews
Station control with supervision and administration
As you can see, the airline procurement cycle deals with a large number of procurement items and needs a sophisticated procurement system to support them such as that provided by SAP for Airlines, one of many SAP Industry Solutions.
One possible solution for this, which requires some development, is to use the SAP for Airline Industry Solution MM External Services Management (MM SRV), an application component within the SAP Materials Management (MM) module. SAP airline solutions are able to support the complete SAP procurement cycle of bid invitation, award/order placement phase, and acceptance of services, as well as the invoice verification process.
The SAP procurement cycle, supported by service procurement in SAP MM (Materials Management), supports these requirements with the following business process steps:
Determination and recording of requirements
Determination of possible sources
Entry of data from quotations submitted by bidders
Comparison of quotations
Award phase - contracts negotiation
Create / update contracts (pricing conditions will be derived from the contract)
Create Release Orders (for each flight)
Entry of services actually performed
Acceptance of services performed
Verification of invoices for services
Pay vendors (IATA ICH / SIS)
All of these steps both depend on high quality data, i.e., vendor data, product and service data, and externally supplied data via a variety of information channels. As aviation consultants who specialize in both aviation marketing consulting and as specialist in both airline procurement processes and SAP BW data warehouses, we see a great deal of potential to improve each of these procurement steps and increase airline profitability through better decision support processes. If you need Airline Industry Solution Consulting, just click the button, complete the form and we'll get started.
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