Importance of Lead Time Reduction for Gate Gourmet - Case Study Example

Table of Contents Introduction 2 Background Information 2 Supply Chain Issue for Gate Gourmet 3 Bullwhip Effect for Gate Gourmet 4 Supply Chain Concepts used by Gate Gourmet 5 Importance of Lead Time Reduction for Gate Gourmet 7 Conclusion 8 References 9 Introduction Organization working in the service sector has to look towards satisfying the customers by delivering quality service so that the customer remains loyal to the business. Instead it is true for all business but more so for service sector. This makes it important that the service sector especially those working in the catering business improve their process of carrying out business by developing the supply chain and looking towards reducing the lead time and ensuring proper delivery of goods and services. The report presents the different supply chain issue which gate Gourmet has to face and the manner in which they need to develop their present supply chain process to ensure efficiency. It also proposes a mechanism through which the lead time can be reduced and overall efficiency can be attained for providing proper services to the customers. Background Information Gate Gourmet is into catering business and is the world’s second largest catering company providing catering services to airlines. Gate Gourmet provides over half a million meal each day and has over 115 flight kitchens in 30 different countries. The company has looked towards developing its supply chain and looks towards real time data and works on it so that better services can be provided. Gate Gourmet has ensured that they change with the changing rules and regulations and has looked towards using Scala as their software which helps them to plan and ensure timely delivery of the different cuisines in the stated airlines and before time. The company has also ensured consistency in taste and quality which has builds a brand image and looks towards developing their supply chain further so that the level of service further improves. Supply Chain Issue for Gate Gourmet Gate Gourmet has to deal with several supply chain issues which has increased the lead time and requires development of strategies through which it can further be controlled. Some of the supply chain issues which Gate Gourmet faces are Changes in the timings of flights, confirmation of the final number of passenger and the meal they require is not guaranteed. This is one of the major issues that Gate Gourmet is facing as delay in flights reduces the time that the catering company has. Gate Gourmet within the little time have to clear the in house kitchen in flights and also fill up the kitchen with the required resources that will be required during the flights. In addition to it the final confirmation regarding the number of passengers and meals that will be served is provided only half an hour before the schedule departure of the flight which makes it difficult to concentrate on the manner in which the catering company will be able to provide the required resources to the company. The other issue which Gate Gourmet has to face is the manner in which the government rules and policies are undergoing changes especially after the terrorist attack. This will require that Gate Gourmet looks towards developing their supply chain and looks towards updating the changes as they happen. The company on this front has looked towards using e-gate-matrix through which updates and changes are regularly made. Despite the efforts Gate Gourmet has to deal with changes in the supply chain issues and is an area which has to be worked out to improve better delivery of services (Kelly and Storey, 2000) Gate Gourmet faces an issue of supply chain as most of the work done by the business is carried out hand and there is no use of technology like conveyor belts which could speed the work that is carried out. This results in increasing the time that Gate Gourmet takes to deliver the quality of service and also increases the risk of quality. The company on this front has to look towards increasing the use of technology and has to look towards integrating it with their supply chain process so that better efficiency is gained and the lead time that the catering company requires to deliver the services is reduced (Robinson and Stern, 2007). Bullwhip Effect for Gate Gourmet Gate Gourmet will be benefitted greatly by using the Bullwhip effect as it looks towards finding out the different reasons due to which differences occur in the supply chain and looks towards presenting the different reasons which when worked on will improve the entire process of supply chain. The bullwhip effect in the supply chain looks towards providing important information which is sent to the manufacturer of the supplies stating the variances which occur in the supply chain and the different interruption which leads towards making the supply chain loose its effectiveness (Christensen and Overdorf, 2000). The process of bullwhip will be greatly beneficial for Gate Gourmet as the catering company is observing a decrease in lead time and widespread fluctuations are being observed in the degree of services which is provided to its customers. This will help Gate Gourmet to remove the disorganization which exists between the order required and order supplied. This will help to reduce the gaps which exist between the order placed and received and thereby will smooth the process in which supply chain works. In addition to it Gate Gourmet will also be able to develop policies through which the process of communication improves between the airlines and the company. This will help them to get timely orders and the different type of cuisines that have to be served. The process will thereby ensure that the return or excess food which is stored in the kitchen of airplanes is reduced thereby reducing cost for the airlines and ensuring maximum benefit through the use of Just in Time technology (Scheuing and Johnson, 2009). The use of bullwhip will thereby multiply the effectiveness of supply chain as it will look towards using a process of batch production where demand forecast are made for numerous airlines together. This will help to ensure consistency and will provide the benefit of economies of scale due to which cost will be reduced. In addition to it the use of bullwhip effect will also ensure that the fluctuations in demand are taken into account and based on it better production can be done. The entire process of supply chain will thereby gain effectiveness and will help to ensure that Gate Gourmet is able to reduce the errors and ensure that the standard of service further improves. This will increase the level of customer satisfaction and will directly and indirectly contribute towards the brand image of the company. Supply Chain Concepts used by Gate Gourmet Gate Gourmet has looked towards using software named Scala which looks towards providing ready information to the suppliers regarding the food that has to be supplied. The company has looked towards ensuring that all material information which will have relevance on the goods that is produced and hence the supply is updated quickly. Through this software Gate Gourmet roughly estimates the number of passengers that will be travelling via the flight and looks towards starting production 12-24 hours in advance. The main objective of the software is to ensure that the right meal in right quantity is supplied at the right place. The fact that changes are made at the last minute regarding passengers so Gate Gourmet through the use of Scala has ensured that the purchasing, kitchen and logistics works in close contact with each other. Gate Gourmet looks towards having a buffer stock so that in case variations occur in the quantity of goods that have to be supplied it can be replenished within minutes as the lead time for them is very low (McCool, 2005). Through the use of the software Scala Gate Gourmet looks towards providing the amount of meal that will be required and at the desired time. The software calculates the lead time that will be required to manufacture those which is passed on the kitchen well in advance. The kitchen based on it generates the required raw materials which will be required and is send to the logistics department to make the necessary arrangement. In case of any changes the changes are made in Scala electronically or manually so that the kitchen can make the necessary adjustments in time. This helps to monitor the supply chain process and ensures that goods are produced according to the requirements (Wan and Jones, 2003). Through the same software last minute checks are made regarding the food which has to be sent to the airlines and labels are printed and pasted on it. The goods are dispatched to the place of airlines well in advance so that the necessary replenishment can be made on time. This software then generates the invoice which is sent to the airlines for payment. The entire process of supply chain that Gate Gourmet uses is thereby effective and the use of software Scala ensures that the services which are delivered are as per the industry standards which the company has made. This ensures that the overall service level improves but sudden changes in flights time or number of passengers have an effect on the supply chain as making the necessary adjustments results in the entire process to loose its effectiveness and at times create panic and delay in order dispatching. Importance of Lead Time Reduction for Gate Gourmet Lead Time holds key in case of Gate Gourmet which works in the catering industry as they have to plan and make things in advance so that the aircrafts are provided with the required objects and things in the designated time. The fact that the increase in the number of airlines have increased the pressure on the catering companies as within the limited time period which they have they have to look towards removing the waste from the planes including the kitchen, the baggage has to be removed and within the same time the kitchen has to be replenished and the total plane has to be cleaned and the luggage of passengers have to be reloaded (Jones, 2006). All the activities have to be done within a period of half an hour or even less in some situations. This requires that Gate Gourmet plans well in advance and looks towards ensuring that they use the lead time that they have towards their advantage. This will further require that Gate Gourmet gets an estimated idea about the things they will require and have all the necessary arrangement ready so that they can act within the stated time and ensure that the flights don’t get delayed (Cowell, 2008). This is only possible if the airplanes are provided with the additional lead time which helps them to make the necessary arrangements and is able to have the resources at their disposal. Lack of efficiency or planning in this aspect will result in delay and will have an effect on the schedule of all flights. This makes it imperative that lead time is provided as preparing meals which have to be of highest quality requires time. Gate Gourmet has to be well informed well in advance regarding the requirements of the passengers so that they are able to get the resources and make the complete food (Easingwood, 2006). This will also help to develop the logistics and will help to ensure timely delivery of services. The lead time will ensure that all the necessary arrangements are made well in advance and will thereby improve the quality of service and improve customer satisfaction. Conclusion The report thereby highlights the manner in which different issues relating to the supply chain is faced by Gate Gourmet. This makes it important that Gate Gourmet working in the catering business improve their process of carrying out business by developing the supply chain and looking towards reducing the lead time and ensuring proper delivery of goods and services. It is also important that they incorporate new tools and technology which will help to improve the process of supply chain and ensures that the gaps which exist are reduced. Working and developing the supply chain further will help to improve the overall efficiency through which Gate Gourmet works and will help to improve the level of service which is being provided. References Christensen, C.M. and Overdorf, M. (2000). Meeting the Challenge of Disruptive Change, Harvard Business Review, 67-76 Cowell, D. (2008). New Service Development, Journal of Marketing Management, 3 (3), 296-312 Easingwood, C.J. (2006). New Product Development for Service Companies, Journal of Product Innovation Management, 4, 264-275 Jones, P. (2006). Managing Hospitality Innovation. Cornell HRA Quarterly, 37 (5), 86-95 Kelly, D. and Storey, C. (2000). New service development: initiation strategies, International Journal of Service Industry Management, 11 (1). 45-62 McCool, A. (2005). Inflight Catering Management, Wiley: New York Robinson, A.G. and Stern, S. (2007). Corporate Creativity, Berret Koehler: New York Scheuing, E.E. and Johnson, E.M. (2009). A Proposed Model for New Service Development, The Journal of Services Marketing, 3 (2), 25-34 Wan, L. and Jones, P. (2003). Innovation in the UK Foodservice Industry. International Journal of Contemporary Hospitality Management, 5 (2), 32-38 Read More