National airline
Redesigning a critical procurement task around stakeholder needs, not rigid process.
The situation
Crew uniforms are a critical part of an airline’s identity. This airline had a well-established approach for ordering new ones that had been unchanged for years. When a contract was up for renewal, the engineering department would call in the procurement team. They would take the specs, run a tender process and negotiate over the terms. Very simple, very conventional. But totally disconnected from operations.
This created problems both for the airline, its staff and the supplier. For example, crew had access to a system for ordering new items of uniform – but they had to collect it themselves from a depot within fixed hours. So for a crew whose flight landed after 4pm, there were rarely opportunities to get the new kit. Worse, uncollected items were returned to the supplier. This approach created the problem of overstocking.
In total, there was an average of USD $4.5m (£3m) worth of uniforms sitting with the supplier at any one time. That was not only costly, but made any uniform changes either costly or time-consuming to implement as inventory was written off or run down.
The solution
Proxima's approach always starts with a fresh pair of eyes looking as broadly as possible across every aspect of the business. Proxima knew that the key to this project was breaking down silos and putting procurement at the heart of conversations between the supplier, the airline and its staff.
Some of the solutions were incredibly easy once we took this unified approach. For example, the returns problem was solved simply by showing the supplier how much money they would save by extending the opening hours of the uniform collection depot and setting up lockers for out-of-hours collections.
The airline has incredibly good forecasting and resource planning systems – it’s critical in this industry. But none of the information from those systems was finding its way to the suppliers, who were reliant on guesswork and historic data. As well as opening this line of communication, the Proxima team arranged open days where they could meet crews, back office team, pilots and customer services personnel. This helped the suppliers become more responsive to the real needs of the business, not just the terms of a contract.
But Proxima looked deeper. We found further savings and more responsive processes deeper in the supply chain by empowering the suppliers to tweak the type of fabrics used in the uniforms. Consolidating suppliers in one ancillary function halved turnaround time. And we discovered a logistics partner for a different part of the airline was running along the route from the uniform supplier to the distribution centre – creating a piggy-back opportunity.
The result
This project was less about raw savings that delivering a better, more responsive, more unified approach to one aspect of the airline’s operations. Complaints about the uniform ordering process have gone from around 50 every day to almost none. Happy crews make for happy passengers, and that’s a return any business would cherish.
Equally importantly, the new lines of communication – not just between the airline and its suppliers, but between many different functions within the airline – have already made it more responsive in other areas of crew management. Procurement is now much more responsive to the real needs of the business.
And although we never really looked at the per-unit cost of the uniforms, the concrete financial benefit to the airline – excluding any of the added value around employee relationship, brand and risk management – was well into seven figures.