Pioneering digital transformation in airline catering

Introduction

This case study provides an in-depth analysis of the digital transformation journey undertaken by a world-leading airline catering company in partnership with Marlabs, a leader in digital transformation. The collaboration aimed to address critical operational pain points, reduce costs and waste, and improve transparency in the catering business. Marlabs’ solutions spanned various advanced capabilities, including specialized ERP systems, cloud migration, IoT-based smart carts, and data analytics. The results yielded significant benefits, such as increased operational efficiencies, reduced costs, and higher customer satisfaction.

Context

The complex world of Airline catering involves millions of meals, hundreds of preparation kitchens, thousands of ingredients, and 24/7 global operations. The challenge lies in delivering a perishable and highly varied product on time while ensuring simplicity, accuracy, and traceability throughout the process.

Solution

To overcome these challenges, the catering company partnered with Marlabs, which provided digital solutions to streamline operations, increase predictability, and enhance the user experience without disrupting existing operations.

Building a Specialized ERP System

Marlabs recognized the need for a comprehensive, real-time information flow to manage the complex operations of the airline catering business. Hence, Marlabs developed a specialized ERP system enabling seamless integration between various stakeholders, including the catering company, suppliers, and airlines.

Marlabs developed a globally coordinated, real-time automated data flow on top of SAP—a specialized ERP for airline catering. This system covered the entire process, from airline orders through invoicing and collections, with everything in between. It also included designing and implementing automated applications for purveyor orders, kitchen production schedules, recipes, delivery and logistics scheduling, and more. As a result, the catering company gained a competitive edge in the industry.

The ERP system played a crucial role in achieving operational efficiencies and reducing waste by providing accurate and real-time information at every step of the catering process. It also improved customer satisfaction by enabling the catering company to meet unique customer requirements and Service Level Agreements (SLAs).

Migrating to the Cloud

The client faced high costs and operational challenges due to its physical data centers worldwide. As a result, Marlabs identified cloud migration as a viable solution to reduce costs, improve stability, and enhance performance.

Marlabs migrated the company to the cloud in 2014, adopting a two-platform approach that maximized savings while minimizing latency and maximizing global performance. The migration led to 50-60% lower costs, significant improvements in uptime and latency, and increased customer satisfaction.

The two-platform approach involved:

• Moving all back-office operations to Microsoft Azure
• Capturing significant bundled discounts from Microsoft
• Moving the client-facing IFX to Amazon Web Services (AWS)

At the time, AWS offered a more substantial global presence and more global backup, making it the best option to reduce latency and ensure uptime.

Developing IoT-based Smart Carts

Marlabs sought to address the challenge of maintaining food safety and security in the airline catering industry. Marlabs identified IoT technology as a promising solution and developed an IoT-enabled smart cart that allowed real-time tracking of food temperature, access control, and consumption data at 30,000 feet.

This innovation ensured food safety, security, and control while providing airlines and the catering company with valuable data for demand prediction and customer satisfaction enhancement. The smart cart also enabled airlines to ensure that only authorized personnel accessed the food and allowed them to track the consumption of meals and snacks more accurately.

Implementing Advanced Analytics for Buy-on-Board Business

Accurate demand forecasting became crucial as airlines shifted from free in-flight meals to onboard snacks for purchase. Marlabs utilized its AI and cognitive computing platform, mAdvisor, to automate data analysis and machine learning for developing individual demand forecasts for each flight from every airport worldwide. This system was designed to handle the complexities of demand forecasting, taking into account thousands of flights a day, dozens of SKUs per flight, different geographic and cultural influences, and many other factors influencing demand.

Before Marlabs’ intervention, it took the catering company 6-9 months to develop forecasting models, rendering them practically useless. With mAdvisor, the entire process was automated, allowing for extracting key derived features from each flight (about 100) and destination (around 30). In addition, advanced machine learning models produced demand forecasts for items, meals, and ingredients for each flight/destination, significantly improving the accuracy and timeliness of the forecasting process.

Now everyone—our client, suppliers, and airlines—can use the same system to guide their decisions. It’s already reduced perishable raw materials inventory by 15%, which adds up to $47 million in annual savings.

Results

Marlabs’ collaboration with the world-leading airline catering company showcases the power of digital transformation in addressing complex operational challenges, enhancing customer satisfaction, and driving innovation. As a leader in the digital transformation space, Marlabs continues to help businesses across industries harness the potential of advanced technology.

The success of this partnership serves as a blueprint for other businesses seeking to optimize their operations and adapt to the ever-evolving digital landscape. By embracing digital transformation, companies can overcome current challenges and prepare for future growth and expansion. The case of Marlabs and the world-leading airline catering company demonstrates the power of collaboration, innovation, and a commitment to continuous improvement.

Trust in the Future

The catering company remains focused on post-COVID opportunities. It continues to work with Marlabs to further enhance its ability to predict, service, and gather real-time airline feedback. They also plan to expand digitally into other hospitality and travel segments.

Impact

Business Value Unlocked

The digital transformation journey, driven by Marlabs, yielded the following benefits:

• Operational efficiencies, reduced waste, and higher customer satisfaction through the creation of a unified, specialized ERP system
• 50-60% cost reduction by migrating to the Cloud
• 15% reduction in perishable raw materials inventory costs
• Better monitoring of cabin food to enhance food safety, security, and control

Some of the potential future projects include:

• Utilizing advanced analytics and machine learning to refine demand forecasting further, reducing food waste, and improving customer satisfaction
• Developing innovative IoT-based solutions for real-time monitoring and management of the catering supply chain
• Exploring new business opportunities in hospitality and travel segments, leveraging digital transformation expertise