Reducing costs and improving core processes at an international airline catering business.
Collinson Grant helped Air Fayre to improve customer focus, reduce costs and introduce new processes and IT systems.
Air Fayre provides airline meals to Air Canada, BMI, Qantas, Japan Airlines and United Airlines. It operates out of Heathrow, Birmingham and Los Angeles. Despite good growth the business was running at a loss and cash was in short supply. Collinson Grant was asked to help managers implement ‘Operational Excellence’: improve customer focus; reduce labour costs by £1.2m; standardize processes; select and implement a new IT system; and introduce stronger controls.
We used Lean techniques to improve the skills of local managers and fully engage them in the project’s objectives. The team worked together:
- to organise a survey of key customers
- to define processes and map the ideal organisational structure
- to build a staffing model to show how productivity could be increased, and
- to choose and implement a new company-wide IT platform.
Results
The managers quickly adopted new ideas and with our support they:
- used 5S principles to halve stock levels for some product groups, allowing these areas to be relocated, and increasing productivity by reducing transit and waiting times
- generated savings in direct labour that were double those expected – at £2.5m
- created a further £1m saving in indirect head count after the introduction of improved managerial processes.
We built a strong relationship with local managers and shared their enthusiasm for the progress that was made. During the assignment Air Fayre began negotiations with United Airlines (UA), the world’s second-largest carrier, on a new contract to supply meals at Los Angeles Airport (LAX). The company had been attracted by the improvements that were being achieved in the UK. When this contract was secured we provided further support to the business in LAX.
After a joint review of the risks of changing supplier, UA and Air Fayre agreed on a phased introduction of services on flights from LAX. Within six weeks of the original starting date, catering services for all the planned flights had transferred to Air Fayre. The new service has since attracted the attention of some other American carriers, and has won several awards from UA.