Emirates Flight Catering Reduces Yearly Food Cost Variances by US$12.8 Million with Enterprise Resource Planning Upgrade
 
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Emirates Flight Catering Reduces Yearly Food Cost Variances by US$12.8 Million with Enterprise Resource Planning Upgrade

Based at Dubai International Airport, Emirates Flight Catering employs more than 6,500 staff and provides catering and ancillary services to airlines operating at this busy regional hub. On average, Emirates Flight Catering delivers 125,000 to 150,000 meals per day that are served on 340 flights to more than 110 regular airline clients. The company operates a 602,778 square foot production facility, the largest of its kind in the world, in terms of volume throughput. 

Emirates Flight Catering needed to ensure more efficient 24/7 operations in a very time-sensitive environment and achieve an operating uptime that exceeded 99% to ensure timely food and beverage delivery to airplanes. By upgrading from Oracle’s JD Edwards EnterpriseOne 8.10 to JD Edwards EnterpriseOne 9.0, the company achieved system stability beyond the requirements of the flight catering business—where meals must be ready four hours before the departure of each flight—and it reduced food cost variances from US$500,000 to US$100,000 per month, to realize a straight gain of $4.8 million per year.

Emirates Flight Catering recently won the 2011 Arab Technology Award for the “Best ERP Implementation in the Hospitality Sector” category. The company was chosen among 50 competing companies to receive this highly prestigious and competitive award because of the smooth handling and outstanding return on investment of its enterprise resource planning (ERP) solution implementation.

 

 
 

 
 

Challenges

A word from Emirates Flight Catering

  • “Oracle’s JD Edwards EnterpriseOne was a key factor in our remarkable business growth. It has enabled us to serve 125,000 meals per day during 340 flights from Dubai International Airport without fail in our six years of operation. The upgrade to the latest version enabled us to reduce food cost variances from US$500,000 to US$100,000 per month, to realize a straight gain of US$4.8 million per year.” – Arun Tewary, Vice President, IT, and Chief Information Officer, Emirates Flight Catering

  • Ensure efficient 24/7 operations in a very time-sensitive environment where meals must be ready four hours before the departure of each flight
  • Ensure precise material planning despite very strict timelines, with the planning for catering each flight’s hot food, cold food, bakery, and beverages starting four days before departure by defining the bill of materials and work orders involved
  • Achieve an operating uptime that exceeds 99% to ensure timely food and beverage delivery
  • Handle unit-of-measurement conversions for inventory items efficiently throughout the entire supply chain—such as for mineral water, which the company buys in boxes, stores in bottles, and serves in glasses
  • Allow for batch reports from finance, inventory, purchasing, and other areas to be generated after midnight, despite the substantial amount of system resources they consume

Solutions

  • Upgraded Oracle’s JD Edwards EnterpriseOne to achieve operating uptime that exceeded 99% to ensure timely food and beverage deliveries to airplanes—even beyond the requirements of the flight catering business, where an airplane can never be delayed because the food is not delivered in time
  • Reduced food cost variances (the monetary equivalent of losing raw material on its way through the manufacturing chain due, for example, to insufficient quality of the supplied raw material) from US$500,000 down to US$100,000 per month, to realize a straight gain of US$4.8 million per year
  • Achieved a perfect balance between system load and system response to enable the company to generate numerous batch reports after midnight—even though most of the flights it caters depart between midnight and 6 a.m., requiring proper system response to produce catering orders and checklists for crew sign-offs
  • Enabled the company to efficiently handle complex unit-of-measurement conversions for inventory items throughout the entire supply chain (for example, fresh fish, which is purchased in kilograms, transferred from the warehouse to the cooking department in pieces, and calculated on finished goods bill of materials in grams) without any customizations
  • Enabled more efficient, 24/7 operations for reorder planning by generating automatic purchase requisitions—which can be accepted or rejected by managers—if stock falls below the minimum level
  • Enabled more efficient material requirements planning by automatically checking all bills of materials, generating the required twice-daily requisitions to fulfill customer orders, and transferring materials from the main warehouse to the cooking department
  • Accommodated a growth path from 45,000 meals per day and 3,000 employees in 2006 to 125,000 to 150,000 meals per day and 6,700 employees today

Why Oracle

“We view Oracle as part of the extended team and not as just a vendor. The tight integration and hands on approach taken by Oracle ensured success after success. JD Edwards EnterpriseOne handled the difficult challenge of unit-of-measurement conversions, which could not be handled by any other ERP system,” said Arun Tewary, vice president, IT, and chief information officer, Emirates Flight Catering.

Implementation Process

Emirates Flight Catering chose to employ a three-phased approach. In the first phase—a thorough overview and analysis of its existing hardware—Emirates Flight Catering decided to upgrade its disk space, central processing units, and system memory.

Phase two consisted of upgrading the existing JD Edwards EnterpriseOne system to version 9.0, carrying over all customizations that the company had implemented it its previous version. Now in the third phase—Business Process Validation—the company is identifying areas for improvement.