Malaysia Airline Supply Chain

1.0 Introduction

1.1 Purpose

The report helps us to converse the function and tell us the consequence of technology in supporting Air Asia's supply chain. Through this, it will help us to show how technology has been compassionate in the service industry of Air Asia Company by their supply chain and partners.

1.2 Scope

In this report we had discuss about the company's background with their markets and their service offerings. In addition, we had decisively looked at Air Asia Companies supply chain arrangement. Whereby, we also had discussed the ways the company can converse with their suppliers and customer in order to convey a good service in the existing market. We also had discuss the impact of process technologies like plane utilization, logistic management, and standard operation processes, Computer Aided Design and Computer Integrated Manufacturing on Air Asia's supply chain. In addition, we also had show the link between Air Asia Company which uses of Enterprise Resource Planning System, yield management system and Computer Reservation System in their supply chain.

1.3 Limitations

One of the key problem that we encountered during the study and research was we had lack of current figures and statistics on Air Asia's supply chain and the use of new technology in the organization. Even though, the information which is obtainable in the website is efficient but it still pretentious some parts of our study on the organization. Besides that, as Air Asia is one of the most common news that can be found on paper especially in Asia, there was still some complexity in viewing a set of data which was important for our report.

2.0 Organization Background

2.1 Air Asia's Service industry

Air Asia Malaysia is the succeeding state airline, it was the first successful ticket less, low cost airline in the Southeast Asian county. It was originally founded by a government owned multinational, DRB Hicom. In the year 2001, the airline was bought by preceding Time Warner executive Tony Fernandez. Air Asia at that time operates more than 100 point-to-point domestic and international flights from its hubs in Kuala Lumpur International Airport (KLIA) and Senai Airport, Johor Bahru in Malaysia, Bangkok International Airport in Thailand; and Soekarno-Hatta International Airport in Jakarta, Indonesia.( )Through a navy of 72 aircrafts, Air Asia flies above 61 domestic and worldwide destinations by 108 routes, in addition to operates more 400 planes on a daily basis as of the hubs which been situated in Malaysia, Thailand and Indonesia. (Management of technology, 2009) The main competitor of Air Asia will be MAS, Malaysian Airline. Malaysian Airline is owned by the government. Air Asia has to deal among government policies and airport pricing that be natural in the local markets, so they give out not without their cultural differences and ideals of the group of people. Air Asia's fares are considerably lesser than their competitor MAS (Anthony-Clare, 2007).

2.2 Air Asia's markets

According to Air Asia CEO Aireen Omar there are a lot employees who earned low salaries would interested to take a trip frequently to meet up their families particularly throughout special occasions but the ticket was expensive was that time, their need are not satisfied. (Aireen Omar, 2012) Air Asia has online booking and customer service center which provides a low cost option in providing for details about their destine and tickets. Through introducing a low fare will give all those people chance to travel if not more than once in a year. Air Asia was originally a local company but it has become international with its addition of its services to many countries to meet their market (Michael, 2009).

3.0 Air Asia's Supply Chain

Ever since Air Asia is a low cost leading airplane company, they highlight's their purpose which would expand the air travel, and grow the local aviation market by providing a very low fares so most of them can fly.() The equipped situation of Air Asia service industry is multifaceted. A huge set of links in the supply chain, which incessant their daily operation and a number of exterior uncontainable variables for instance climate condition and government regulation becomes factors that affect the performance. Consecutively to raise the competence of operational performance and to handle its supply chain, Air Asia had to implemented Enterprise Resource Planning (ERP) system. Thus, this is a system with the intention of focusing on the capturing of their daily dealings in their daily operations and helps Air Asia to put away its operational costs in addition to raise the competence and veracity in its operation in the service market (Microsoft, 2005). Nevertheless, conservative ERP system implemented by Air Asia does not afford elasticity and aptitude which is essential to analyze information used for a better supply chain management. Advance Planning and Scheduling (APS) system is been optimizes in Air Asia Company which moves as the brain of supply chain actions by gearing those activities in relation through the customers and suppliers requirement. (Ahmed, 2004) APS system supports Air Asia Company to classify their customers' orders, forecasts future execution requirements, verify resources accessibility and sets order priorities. Furthermore, APS system helps to progress Air Asia's tactical and operational performance mainly within the inbound and operational activities. The mixture between market demand and push technology by software vendors signifies the opportunity of APS to be the next source of Air Asia's cost advantages and given its point in maturity stage in product life cycle, the risks that involves in choosing the wrong vendor is very minimum. (Ahmed, 2004) Through the APS system it will provide several new functions to Air Asia. One of it would be event management technology which will assess Air Asia's supplier's recital and given them the ability to make more competent monitoring process in the service industry. (Aberdeen Group, 2004) The other function would be inventory development, demand forecasting and maintenance management capabilities hereby, these function enables airlines and air plane manufacturer and other suppliers to encompass alliance strategy in managing inventory, maintenance schedule and devise collaboration. (www.manugistics.com)

4.0 Process Technology of Air Asia

Air Asia uses their process technology to reduce wastage of time and at the same time increase profitability.