Matteo Fungo
Mattia Rodriquez
E-gatematrix case analysis
1.
Was E-gatematrix current business model viable? Would it be robust to the recent slowdown
of in-flight catering that affected the industry?
E-gatematrix case demonstrates how IT can help a business to decrease the cost and increase the
profits. Thanks to the business reengineering, e-matrix developed a supply chain that increased the
efficiency and effectiveness of all the market. Any business using information systems to handle
and manage their data, does so to: improve business efficiency, to help streamline and to organize
all day-to-day operations. In this case, the successful use of information system and software
solutions can be rewarding to all those involved in the flight catering and service process.
Before E-gatematrix introduced the IT systems to the market, a supply chain already existed. It was
composed by suppliers/vendors, caterers, service providers and the air line companies; all of these
subjects exchanged information, goods and money. With the introduction of the new supply chain,
the air line company didn't need to deal with all these subjects, but only with one intermediate, Egatematrix; which in turn took care of the other actors in the market. The roles of E-gatematrix are
many; it acts as a facilitator, an aggregator, an advisor and a coordinator, allowing the airline
company to concentrate on the flight itself.
Some of the examples of solutions that E-gatematrix took to implement the new supply chain are:
•
Service scheduling: to reduce inventories costs and wastage. Through the web, the company
created a connection with suppliers, especially with Air co.
•
Inventory management (“just in time”): the problem with this variable was the waste of time
and the multiple meal changes. These problems are going to be enhanced with more coordination
and collaboration, due to the introduction of this new intermediate, E-gatematrix
•
Transportation: improved through the help of coordination and ordering menu
•
Galley load planning: optimize the use of resources and provision targeting (ex. ice)
To analyze in a better way the strengths and weaknesses of E-gatematrix's IT, we decided to
conduct a SWOT analysis
Strengths
•
supply chain reengineered
•
supplyTech (B2B exchange platform,
procurement planning application, modules from
SAP R/3, EDI message exchange)
•
communication (no waste of time)
•
complex and efficient network
•
web services (SOA)
•
DSS to assist company planners
•
Analytical Hierarchical Process (AHP)
Weaknesses
•
complicated coordination between the
suppliers
•
trade-off between customer service (meal
rotation) and logistic problems
•
variation of IT systems with the different
clients
Opportunities
•
improve the customer facing process
•
extend the service to other companies
•
look to other markets (ex: trains) using
economies of scale and experience
Threats
•
the supply chain provided in 2003, that
was a competitive advantage, now could became
easy to imitate (IT is like a commodity)
•
new entries in the market with whom
share the small profit
If E-gatematrix is able to exploit the strengths and opportunities, and improve the weaknesses, the
strategy of the company is completely viable. Problems in implementing this type of strategy are
various. For example, in an article written by Kelly Jackson Higgins, she states, “E-gatematrix
found out the hard way that the online ordering application on the portal didn't have the capacity to
handle large orders. Big food orders for in-flight meals-each with hundreds of ingredients-took
more than 10 minutes to process and sometimes didn't go through at all. An airline or supplier
could select orders from E-gatematrix's online catalogs with no problem, but when it came time to
submit the final order, the user would have to endure the excruciatingly slow back-end processing
phase or find that the order didn't execute” (Network computing). To address the problem, Egatematrix deployed three applications for instant demand information access from web enabled
computers:
•
flight service schedule (daily updates on flights schedule, with menu provisions and
activities codes)
•
passenger load forecast (provides reservation for the flight combined with the capacity of
passengers on the flight)
•
demand forecast (perhaps the first of its kind, forecast quantities of a given service to be
boarded on a particular flight)
All industries have suffered from this period of recession and crisis. In 2009, the air companies lost
9 billion dollars, the worst collapse that the aviation industry has ever suffered. E-gatematrix's
business model was calibrated on certain economic conditions. If there are changes so radical as a
crisis, the whole model would need to be reviewed. IT is certainly, by nature, an effective tool to
overcome bad times. But without relying on IT, and instead looking at the other business activities,
you should improve or reengineering all the business process to adapt your actual business to the
new conditions of the market.
For example same other IT applications that E-gatematrix can adopt in order to improve
simplification reducing complexity are:

a new message system that could increase the employee’s quality information through
discussion board, blogs, FAQs;

creating a web site where the airlines passengers could choose which type of services they
want to receive during the flight. This could be useful both to the passenger, because of the
personalized services, and also to the company that now exactly what to provide.
2.
Given the experimental nature of business model, what considerations should E-gatematrix
make before attempting to scale their service to other airlines?
“One factor that commonly derails a Business Process Management project has nothing to do with
technology (IT) and everything to do with people” (Baltzan/Phillips).
As we can see from this passage from our textbook, solutions that in some markets and in certain
contexts has been efficient, in other cases led to a waste of money and time. Business process
reengineering has to fit with the particular structure and culture of the client that E-gatematrix has
to serve. In order to scale their services to other airlines they can't just copy their model to the new
client, but they have to adapt it to the different type of company they are facing.
We conducted some analysis to value if it is convenient for E-gatematrix expand their market. As
assumption we considered that the other companies are similar to Air Co structure or E-gatematrix
is able to find solutions for the new client that fits in the same way as the solutions found for Air Co.
In the next two pages there are some quantitative analysis to support Valencia's decisions on how
much saving can be offered to the actual client, Air Co, and, if and how other project are viable.
Sources

http://business.highbeam.com

http://business.highbeam.com/4113/article-1G1-92793151/egatematrix-flight-supply-chaintakes-off

http://www.availability.sungard.com/Documents/eGatematrix%20CaseStudy.pdf

Textbook: Information system (Baltzan/Phillips)