McKinsey and jet fuel processes? You may ask how that fits together. Well, with this blog post, we take a very specific perspective on airline jet fuel processes. More precisely, we analyze CORONA’s impact on airline processes in general, explain McKinsey’s view on digitalization, and what that means for jet fuel processes.
Undoubtedly, CORONA has proven to be a radical game-changer for many industries. The pandemic doesn’t ask for permission but radically disrupts companies and entire industries. In fact, airlines and the aviation industry are among the sectors that have been hit the hardest.
For airlines to not only survive but thrive in the new digital era, CORONA forces them to focus on bringing value to their customers and maximizing profits by pivoting to a much more digital strategy.
Why are jet fueling processes in the spotlight?
Believe it or not, but airplane fueling processes are —still— dominated by two words: manual and paper-based. Many airlines made enormous progress in terms of passenger apps, mobile check-in, and other customer-oriented processes. Meanwhile, in many cases, the pilot has to order jet fuel verbally and receive a paper-based receipt. And subsequent processes are even weirder: The pilot has to manually transfer the (paper-based) receipt to the back office where the contained data is (manually) transferred to the fuel IT system. At a later stage, the airline receives a (paper-based) invoice from the IT supplier. And again, we talk about a manual transfer to the fuel IT system. Finally, payment needs to be processed.
Current jet fuel processes: Error-prone and antiquated!
The above process description is super-high level, and of course, it’s slightly different at every airline. Nevertheless, we can drive home one essential point: This all feels like a process from the last century and, more importantly, potential sources for failures are evident. We talk about hand-written receipts, dozens of manual interactions, and changes of mediums (verbal to paper, to an IT system, etc.).
McKinsey’s view on airline jet fuel process
To be very clear at the beginning: McKinsey did not publish a statement about jet fuel processes. However, in a recent report, McKinsey identified three main areas of focus for businesses to survive and compete in a (post-) pandemic world:
- Evolve to customer needs.
- Capitalize on data to grow.
- Modernize technical capabilities and boost organizational efficiency.
Although the first aspect is not relevant when looking at airlines’ jet fuel processes, the second and third aspects seem to be written for jet fuel processes. Let’s have a more detailed look at McKinsey’s view.
Capitalize on data to grow addresses a significant paint point
If you go through the above jet fuel process description, you quickly realize the absence of data. Only essential data is recorded during the manual process. Moreover, only process-relevant data is transferred to the IT system.
On the contrary, and actually not very surprisingly, McKinsey pushes towards streamlining transactions, forward planning of corporate developments, and more efficient decision-making. Their idea of post-COVID processes involves:
- Assessing the outcomes of current critical decision-support models.
- Rebuilding the same.
- Developing more modern data sets and models for optimal performance.
Putting technical capabilities in the heart of an organization
McKinsey clearly outlines that putting technical capabilities at the heart of an organization is key to a post-pandemic world. Moreover, it sets up the ideal foundation for businesses to operate with utmost efficiency and cost-effectiveness. From McKinsey’s point-of-view, this will ultimately lead to adaptability for future macro- or micro-economic changes. Technical capabilities, first and foremost, include cloud-based data platform and automating processes.
Airlines have to utilize the potential of a digital jet fuel process
By focusing on data and technical capabilities, airlines can create enormous business advantages. Here are just a few examples of a digital jet fuel process:
- 6 to 7-digit cost-savings
- Reduced delay (that ultimately drives additional savings)
- Reliable data platform for analytics, AI, and reportings
- Massively improved process efficiency
Digital fuel networks as a kick-starter for improved jet fuel processes
Digital fuel networks that connect airlines and fuel providers build the perfect foundation for tackling the challenge described above. Besides a quick ramp-up, those networks enable airlines to establish digital processes at their hub and at many outstations.