Supply Chain Management

The Supply Chain is “the management of resources to supply the product and service needs of the end consumer, encompassing the supply chain of any physical products and the exchange processes involved.” (Davies, 1993).

RA has categorized it’s suppliers as �exit’ (Custom Textbook, 2006). This meaning they are looking to cut down costs and improve performance. BA works on having a long-term relationship with their suppliers this being more beneficial for the customer. Managing cost is not as imperative as quality. Procurement is an efficient way to manage these elements and can improve customer satisfaction by identifying customers’ needs and reduce operation costs (Croom, Johnston, 2003). An example is BA’s swap from their caterer’s Lindt to Lily O’Brien (Jobber, Fahy, 2006:119). This was done to improve quality for passengers.

RA have excluded travel agents, as part of their intermediary. This meaning they use their own services, the internet, which accounted for 97% of all bookings (Jobber, Fahy, 2006:216). Although the internet seems a good source for customers as its accessible to anyone, the website is open 24/7 and can allow passengers to check in online and use online payment, there can be problems in credit card fraud or computer malfunctions e.g. busy servers. Using the internet also means that customers aren’t aware of the rules and regulations when purchasing their tickets. By dealing with an employee in the company (booking through the phone), customers are told when and how their tickets are refundable and any other necessary details.

According to statistics in 2006 RA carried 156,000 more travelers than BA. This was done by using airports outside the city meaning customers had lower airport charges and avoided airport congestion. Airports are one of the main supplies to company’s like BA and RA. BA keeps most of their planes and use London Heathrow and London Gatwick the most as they are biggest airports. RA use smaller ones such as London Stansted which has less air traffic meaning less flight delays and satisfied customers. However BA hold the biggest market share in business travelers or frequent flyers that need the convenience of a close city based airport therefore they avoid using those