Sales & Operations planning is often associated to manufacturing. But its as critical for passenger transport companies such an
airline which needs to meet the fluctuating demand with right flight capacity.
Passenger air travel is no more a luxury, it’s the main mode of transportation for business or leisure. Seasonality is an important factor
in this travel which maps into holiday seasons across different geographies. This is highly competitive given there are dozens of airlines from each region
and each offering unique services and capabilities.
One of the main challenges for airline business is profitability. But the main business driver here is to effectively meet the demand with the most optimal pricing and ensuring enough capacity exists to meet the demand in the right flights, seasons and routes.
To meet the above goal of getting more predictable forecast,there is a need for an effective Sales & Operations process that can estimate the demand based on previous usage, traffic projections, new routes and aircrafts,seasonality and events. This process is often done as a 12 month rolling
forecasts that allows for a constant revision of the forecasts based on changing external and internal travel environment.
For a very highly networked global airline, this would be a mammoth task given there are so many routes, global and local dynamics and different drivers as mentioned above. A smooth collaborative process that covers consensus demand planning with demand coming in from different inputs to derive what the demand would actually be would make it more reliable. There is also need to do “what if” scenario planning to come up with regular, upside and
conservative demand plans to have appropriate plans to cater each of the scenarios. On the operations side, its important to look at a global view of
Flight capacities available in terms of aircraft types and seats (business,economy etc) . The planner would like to derive utilization or constrained demand
plan based on the capacities available, by allocating the capacities on an optimum basis to the most profitable routes or demand centers. In addition to the flight capacity, there are other constraints such as in-flight catering, staff availability that needs to be planned for effectively meeting the demand.
Lack of this often could result in not being meet the demand or not being able to service with customer satisfaction (e.g. availability of veg
meals).
SAP’s Sales & Operations Planning on HANA allows for ability to have an integrated planning model across demand, supply and finance,
scenario planning capabilities and collaboration that can facilitate to effectively manage profitably meeting demand with flight capacities and other
constraints.
Built in SAP HANA to handle huge volume of data (bigdata), the application supports planning through the most popular user interface
Microsoft Excel. While the user interface is excel, the calculation logic is all centralized and allows for users across sales, operations and finance to
collaborate looking at single version of planning data. Here is a sample of excel planning template.
The application allows for analytics based on the planning model to look through KPIs in the context of planning process. One of the KPI
that most planners would like to know is the gross margins across different scenarios, which can be easily pulled up through the application. This can also
be reviewed in a mobile user interface.
The social collaboration aspect is another important capability in the solution that allows planners to interact with their peers as
well as executive teams to discuss and agree on various options. Decisions such as which demand that they should go for, what capacity augmentation or
re-routing should be taken up can all be decided in more analytical way with supporting data. The consumer grade user experience for social collaboration
allows users to record their interactions in more easy fashion.
Learn more about the above solution in the Travel & Transportation event demos on April 3 in Germany.
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