Air NZ e-order plan takes off

Air New Zealand has embarked on an 18-month project to introduce e-procurement to its operations around the globe.

The massive project will pull together Air New Zealand's SAP system with that of recent acquisition Ansett Australia and upgrade the system to provide procurement, financials and HR/payroll.

Phase one of the project, which will see the system rolled out to Air New Zealand in New Zealand and Ansett Australia's head office in Melbourne, is set to go live in May next year. The project will then extend to the rest of Australia and subsidiary regional airlines such as Link Airlines. Operations in the rest of the world will follow.

The airline will have two SAP R/3 systems - one for engineering and maintenance of aircraft parts and the other for corporate systems.

The corporate group will implement a web-based front-end using SAP's enterprise buyer professional, to make it easier for employees to procure goods and services. The aim is to give employees easy access to high-usage, high-volume products and services and at the same time have better visibility and management of spending, says project manager Jenni Mander. Staff making more complex purchases will still have access to the back end of the SAP system.

Mander says other reasons for implementing e-procurement are ensuring suppliers and the airline itself are operating by the terms and conditions of contracts, maximising value from contracts, consolidation of suppliers, and obtaining information to determine smarter ways of doing procurement on an ongoing basis.

One of the major challenges of e-procurement is inputting and managing the product catalogues of all the suppliers on the system and the airline is now working on a strategy for this. It has identified a number of suppliers, mainly providers of high-volume items, whose catalogues will be running on the system by May.

Procurement systems adviser Peter Holland says the catalogue structure is complex but getting the information into the catalogue is relatively simple. "All catalogues will be hosted internally but that doesn't preclude us from using a third-party provider in the future or from having suppliers maintaining their own catalogues within our firewall."

There will also be regional variations of the catalogues. For example, a caterer based in Dunedin wouldn't be available to the Koru lounge in Auckland or an electrician in Christchurch won't be on the London catalogue.

Once the e-procurement system is established, the airline will look at providing links with the worldwide airline exchange Aeroexchange, of which Air New Zealand is a member. The initial focus of Aeroexchange is engineering and maintenance, particularly for spare parts. Corporate procurement won't be entered into until later.

Story courtesy of ComputerWorld NZ.

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