Scm at Cathay Pacific Essay

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“AVIATION SPARE PART SUPPLY CHAIN MANAGEMENT OPTIMISATION AT CATHAY PASIFIC AIRWAYS LIMITED” CASE STUDY
GLOBAL LOGISTIC COURSE ASSIGNMENT Prof. Hiroshi Hoshino

Umurbek Osorkhan 2EC12056R QBS 10th 5 November 2012

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Company Overview Cathay Pacific Airways is an airline company founded on September 24th, 1946 by Roy Farrell and Sydney de Kantzow. Starting with a very limited schedule service, the company grew larger through multiple product innovations, technological investments such as the computerized reservation system and successful acquisitions. In 1986, Cathay Pacific went public and further expanded in Europe, North America, and China. The company employed over 25000 people worldwide, serviced over 43 destinations throughout
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It`s true that strict rules and tight regulations are necessary-they protect consumers, customer safety, environment and other things. However sometimes it causes some burdens on businesses. It always increases the cost of operations. Also turnaround time for repairs was highly critical and cost for flight delay was extremely huge. Customers might be upset or even shift to other airlines if delays caused them lose the connecting flights. Thus, the cost of aircraft delays was crucial element in engineering. Bargaining power of supplier, difficulty to forecast demand and harsh competitions were other important issues in aviation industry. As a result of tight aviation regulations airline companies, as a customer, were constrained in supplier selection. Spare parts solely supplied by only single dominated supplier as called OEM (original equipment supplier). The limited choice and high concentration of OEM`s limited airline operators` negotiation power. According to the M. Porter`s five force analysis aviation industry has low entrance barrier and it cause very intensive competition between airlines operators. A few decades ago flying with airline was very expensive for ordinary people but today everyone can benefit from this because airline ticket prices have constantly and significantly fallen. Finally, demand forecasting was very difficult. The forecast for spare parts is made based on maintenance information, scheduled maintenance plans and past usage patterns. Even so,

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