All businesses in this case study are fictional and any resemblance to real businesses is coincidental and unintentional. However, you are encouraged to examine academic literature and other sources to learn more about the industry as a whole. Introduction Two small airlines, Seren Airways and Coriolis Air, have merged and there is a desire to rationalise their operations to achieve greater efficiency. The remainder of this document provides background information about the organisations, including their procurement and supply management operations. Seren Airways: Overview Based at Cambridge International Airport, Seren Airways describes itself as "an airline that offers affordable quality". It does not offer the lowest prices, but flights are typically less expensive than with a full service airline, such as British Airways. Where low-cost airlines charge for the refreshments they serve, Seen passengers do not need to pay for anything once on board, other than duty-free items. Seren started in 1985 with a single aircraft. It makes good use of its location (which is "not too far from London"). Cambridge International Airport is not particularly busy, offering a more relaxing flying experience than from nearby Stansted, or other London airports. Seren operates daily flights to Brussels, Amsterdam and Copenhagen, plus a number of popular holiday destinations in Europe. Seren does not perform maintenance, repair and overhaul (MRO) itself. Instead, when necessary, it flies its aircraft to a major airport and pays for the required work - inspections, engine swaps, repainting, etc. Although expensive, it was felt that aircraft maintenance was not a core business activity and was best outsourced. Coriolis Air: Overview Coriolis Air UK was based at Blackpool Airport, operating since 1992. Last May it had cash flow problems and was unable to obtain further credit. As a result, it was bought out by Seren Airways. Coriolis flies to Belfast several times a day and operates daily flights to European holiday destinations in France, Spain and Portugal, plus others in the skiing season. It also flies weekly to Iceland, performs charter flights, and operates regular services to Aberdeen and Wick (typically carrying oil industry workers). Coriolis described itself as a "no- frills" airline. It offered low prices and passengers paid for any additional services they required. Coriolis had its own maintenance hangar, with a spares inventory and a team of staff who worked to keep its planes in good condition. It also provided maintenance, repair and overhaul services for other clients. Coriolis is now wholly-owned by Seren Airways, who is gradually replacing Coriolis branding with its own. It began by changing promotional materials and web pages; then it issued new uniforms to all flight crew and repainted the aircraft. Operations at Blackpool have been reduced in size since 'back office functions, such as human resources, are now managed in Cambridge. In-flight S.

1. All businesses in this case study are fictional and any resemblance to real businesses is
coincidental and unintentional. However, you are encouraged to examine academic literature and
other sources to learn more about the industry as a whole. Introduction Two small airlines, Seren
Airways and Coriolis Air, have merged and there is a desire to rationalise their operations to
achieve greater efficiency. The remainder of this document provides background information
about the organisations, including their procurement and supply management operations. Seren
Airways: Overview Based at Cambridge International Airport, Seren Airways describes itself as
"an airline that offers affordable quality". It does not offer the lowest prices, but flights are
typically less expensive than with a full service airline, such as British Airways. Where low-cost
airlines charge for the refreshments they serve, Seen passengers do not need to pay for anything
once on board, other than duty-free items. Seren started in 1985 with a single aircraft. It makes
good use of its location (which is "not too far from London"). Cambridge International Airport is
not particularly busy, offering a more relaxing flying experience than from nearby Stansted, or
other London airports. Seren operates daily flights to Brussels, Amsterdam and Copenhagen,
plus a number of popular holiday destinations in Europe. Seren does not perform maintenance,
repair and overhaul (MRO) itself. Instead, when necessary, it flies its aircraft to a major airport
and pays for the required work - inspections, engine swaps, repainting, etc. Although expensive,
it was felt that aircraft maintenance was not a core business activity and was best outsourced.
Coriolis Air: Overview Coriolis Air UK was based at Blackpool Airport, operating since 1992.
Last May it had cash flow problems and was unable to obtain further credit. As a result, it was
bought out by Seren Airways. Coriolis flies to Belfast several times a day and operates daily
flights to European holiday destinations in France, Spain and Portugal, plus others in the skiing
season. It also flies weekly to Iceland, performs charter flights, and operates regular services to
Aberdeen and Wick (typically carrying oil industry workers). Coriolis described itself as a "no-
frills" airline. It offered low prices and passengers paid for any additional services they required.
Coriolis had its own maintenance hangar, with a spares inventory and a team of staff who
worked to keep its planes in good condition. It also provided maintenance, repair and overhaul
services for other clients. Coriolis is now wholly-owned by Seren Airways, who is gradually
replacing Coriolis branding with its own. It began by changing promotional materials and web
pages; then it issued new uniforms to all flight crew and repainted the aircraft. Operations at
Blackpool have been reduced in size since 'back office functions, such as human resources, are
now managed in Cambridge. In-flight Service Aspirations at Seren Airways The "affordable
quality" strategy of Seren Airways means it carries more items on each flight compared to its
low-cost rivals. Every time a flight takes off, several thousand items go with it: blankets, pillows,
paper towels, headphones etc, plus a choice of drinks, sandwiches and cakes for each passenger.

2. Seren buys items in bulk. It rents a warehouse on a business park (Milton Road, Cambridge),
where it stores non-perishable items long-term until needed. It receives daily deliveries of
sandwiches and cakes from a company called Avi-Eats Ltd., which are kept in refrigerated
storage at the airport until they are loaded on board the aircraft. Seren considers food and drink
to be a key feature of its value proposition: a reason why passengers choose to fly Seren. A free
in-flight meal typically consists of a choice of three different sandwiches, a cake, and up to two
drinks. (Early flights include a hot breakfast instead of sandwiches.) On some flights, a Seren
aircraft must carry additional supplies in the cargo hold because there are no catering
arrangements in place at the European destination. "Provisioning flights back from Europe is a
mess," management admits. "The arrangements vary from city to city. In Brussels we have a
good local partner based at the airport: its staff come on board and supply everything we need. In
Berlin we have a small airside store where we can keep durable items like paper towels, cups and
blankets until we need them. In La Rochelle, we've got nothing, so we have to carry everything
on the outbound journey. In Copenhagen we have a good supplier for fresh food, but the
arrangements for turning the aircraft round [cleaning it between flights] were very unsatisfactory,
so for the last 18 months we've been bringing cleaning supplies along and having the cabin crew
do the job. Basically, it's different in every city we serve. "Now we've added in the complications
of operating out of a second UK hub, Blackpool, where we don't have a partner as good as Avi
Eats. Some flights have been leaving without the right supplies on board - or at least, without
enough for the return journey. Any failure to carry the right items damages our brand: that's why
we want a complete reboot of our procurement and supply arrangements.' - " Management also
recognises the "no frills" Coriolis Air was historically much better than Seren at getting good
deals from the companies who provided goods and services. This is a valuable facet of Coriolis
Air that Seren would like to preserve, if possible: "Basically, we want to raise the standards in
operations out of the Blackpool hub, but we also want to find economies, if possible." Aircraft
Operated Seren owns six Boeing 737-500s, and leases two Embraer ERJ145s. Since the merger
with Coriolis Air UK, it now owns five Avro RJ100s. It employs sufficient staff to operate all its
aircraft, except the Embraer ERJ145s - flight crews for these are provided under the terms of the
lease, although Seren provides the cabin crew. Leasing these aircraft was done in order to
explore the potential to operate some new routes without the risk of buying additional aircraft
outright, and it is judged to have been successful. Seren has found that some Scandinavian routes
work well with a 50-seat aircraft, whereas a larger plane would always be flying with empty
seats. The management intends to re-examine its aircraft fleet within the next three years or so,
but you do not have to offer advice about aircraft choice, since negotiations will be handled by
the directors when they visit the Paris Airshow. For now, management can tell you it intends to
phase out the Avro RJ100 type, which it believes to have been at the root of Coriolis Air's

3. financial problems. Management summarise it thus: "It's a small aircraft with four engines:
double the maintenance requirements and the fuel burn is high as well. The operating costs were
simply too great." Issues Observed There are clearly some issues where Seren needs your help.
When you made a visit to its sites, you noted the following issues: 1. Poor tracking of stock. A
Microsoft Excel spreadsheet is used for ordering and inventory management rather than anything
more specialised. It employs a series of macros to generate a daily list of requirements, plus a list
of items to be dispatched to various stores in European destinations. The tool was developed by a
student during her placement year in 2015. It is unable to cope with Seren's expanding and
changing operations and needs to either be updated or replaced. 2. Procurement practices are
highly reactive, with frequent issuing of urgent orders in small quantities due to stock-out. This
is usuall but not exclusively related to operations at Blackpool Airport. 3. Transfer of items from
the warehouse in Cambridge to Blackpool Airport is expensive.Stock is transferred by road,
since there are no scheduled flights between Cambridge and Blackpool. 4. Storage space in
Blackpool is plentiful - a corner of the MRO hangar is used for this purpose. However, it is not a
real warehouse and the staff are not experts in warehousing. Items are sometimes lost for several
days or found to be damaged when retrieved. 5. Since upgrading operations at Blackpool to the
'affordable quality' model, Seren has struggled to find a supplier that offers the same degree of
flexibility and quality it enjoyed with Avi-Eats Ltd. in Cambridge. Coriolis was supplied by
Blackpool Air Provisioning Services, but the food quality was not considered sufficient. 6. Spare
items sent out to European destinations for storage represent a problem, despite the use of spare
capacity in the aircraft holds effectively allowing 'free' transportation.Poor accountability for
stock management has resulted in overstocking. Items are sent out because there is space
available, or because the items have been ordered in bulk: transfers of stock are not always for
good operational reasons. This dispersed stock is far more likely to become waste as expiry dates
are not monitored properly. 7. An accounting exercise last month suggested Seren holds
inventory valued in excess of 2m at any given time, but frequently has to expedite orders. This
suggests the right items are not in the right places at the right time. 8. Seren's upper management
seems to think the ground-side operations of the business are less important than things more
directly related to aeroplanes. The chief executive is a former pilot and it is hard to interest him
in such details as the price of sandwiches."I'm more worried about the 50 million dollar
aeroplane," he likes to say.
Evaluate what you have managed to find out about the sector as a whole, and construct reasoned
arguments to persuade the management that your solutions are workable. Recommendations
should be detailed and specific. Ideally, your audience will be able to understand exactly what
you are recommending, and why, and will know enough to be able to adopt the policies you

4. suggest.