Learning Objectives

• Understand the role of food and drink manufacturers

• Identify purchasing procedures and supplier relationships

• Understand role of purchase specifications

• Identify how goods are received and stored

• Understand the principles of inventory management

Introduction

The supply chain as a concept is relatively new. But some suggest that the concept is already outdated, for two reasons. First, it is more appropriate from a business perspective to think of these relationships and flows between organisations as a 'value chain' (Porter, 1995). Second, the notion of a 'chain' is too simplistic; in reality, supplier relationships are typically a complex network. In view of this we will consider the flight catering supply chain as an integrated network for the flow of physical goods from suppliers to flight production units, made up of stages which should maximise the value-added content. From this we can identify a number of issues which need to be managed:

• ordering and specification of products from suppliers

• physical handling, distribution, delivery and receipt of products

• identification of value-added elements

• holding of inventory to buffer against uncertainty

• minimising stock levels to reduce storage costs, avoid waste, and help cash flow

• integrating activity and building relationships across a network

A specific aspect of the flight-catering industry is that both airlines and caterers order from suppliers, but that all, or nearly all, products are delivered to the caterer's production facility. It is then the caterer's role to deliver products to the aircraft. So a flight production unit will hold its own stock in...