The onboard retail supply chain – today and tomorrow

In the first edition of the “The RiM Report”, Szymon Madej, Director of Product and Operations at Retail inMotion, shares his insight and expertise on what supply chain logistics for the onboard retail industry look like today and what they might look like tomorrow.

Today, a passenger has the ability to buy hundreds of products 40,000 feet above the ground. That could be hot food, snacks or a last-minute fragrance and sunglasses combo for their holiday in the sun. The convenience and simplicity of shopping in the sky, however, all begins on the ground, where a strategic chain of events is executed to physically deliver your future purchase to your seat.

Low-cost carriers are enabling more and more people to travel. They are also proof that the concept of ancillary revenue drives profitability and is fundamental for an airline’s growth. Following the many successful cases amongst low-cost carriers, we observe a change in the behavior of traditional flagship carriers moving to a hybrid or full Onboard Retail service models.

Retail inMotion provides the fastest and cheapest inflight supply chain within Europe.

As more and more flagship carriers shift their focus, the topic of maximizing margins per product and passenger spend becomes crucial to a successful ancillary revenue model. It is important to know that a significant part of raw product cost is generated by the complex distribution needed to get a product where it needs to be.

How we get logistics right

At Retail inMotion, we are utilizing a number of strategically placed distribution centers all over Europe accommodating three temperature zones and delivering to over 100 different locations inside and outside of Europe. Having a supply chain of this size with thousands of movements each day enables us to assist our customers by providing competitive pricing, short lead times, low minimum order quantities and lightning-quick responsiveness to meet customer demands.

Currently, we are delivering multiple products to catering/packing facilities all around Europe. These products are then manually packed and sealed at the packing location before they go on board. This is the current industry standard.

Food can be offered in three temperature zones (fresh, frozen and ambient) at any airport in Europe and soon in the United States.

The supply chain of the future

With the continued development of automation and robotics, I foresee the airline trolley becoming a “finished” product rather than a storage/transport unit where products are combined and loaded on board. Imagine a machine/robotically loaded, security sealed unit with a dynamic packing plan that can be amended on request by the airline or using consumer insight and data to forecast top sellers and/or load toward a certain demographic group.

To add to this, driverless technology in the transport sector will provide more frequent transport on routes with even faster lead times to get goods to where they need to be faster.

Supply Chain activities are managed with Retail inMotion’s proprietary software: Vector Warehouse and Order Management System.

As low-cost carriers lead the way for the future of air travel with tighter margins and leaner operating models, the supply chain will have to adapt and evolve to keep up with demand – I am looking forward to seeing what is next and working with my team to develop new solutions and be key contributors to the innovation and change of our industry.