View Single Post
Old Jul 27, 12, 2:48 pm
Moderator: Lufthansa Miles & More, External Miles & Points Resources
Join Date: Dec 2002
Location: MUC
Programs: LH SEN
Posts: 37,495

Creative recipes needed
LSG Sky Chefs wants to remain market leader

For more than a decade, the
catering sector has been facing
immense pressure, particularly
in mature markets in Europe
and North America. LSG Sky
Chefs must take action if it
wants to remain competitive.
The reduction in service levels
at many airlines and the disproportionately
high growth in
passenger numbers in the lowcost
and charter sectors, where
by nature catering has a low priority,
has led to increased pressure
on prices. In addition,
competition is becoming increasingly
fierce. Traditional
market entry barriers have
been lowered as a result of the
fall in demand for inflight service
products as more and more
long-life products or deepfrozen
meals are required. Consequently,
former purely logistics
companies are pushing into
the airline catering sector.
Other key factors affecting the
industry are intensive market
consolidation and the expansion
of locally and regionally active
companies into global markets.
That is why LSG Sky Chefs
also needs SCORE.
For a number of years, in response
to constant changes in
its market environment, LSG
Sky Chefs has been working on
developing a sustainable business
model, as well as on optimising
processes and diversifying
its portfolio. In recent
years, it has bundled its worldwide
activities into programmes
and managed them
successfully. The first of these,
‘Upgrade to Industry Leadership’,
was introduced in 2007
and – building on the Lufthansa
Group’s initiative – was geared
towards leading LSG Sky Chefs
into a growth phase after successful
‘Upgradeplus’ was launched in
2009 against the backdrop of
the 2008 economic downturn
with the aim of further driving
down costs and giving the company’s
global network of 200
catering facilities a long-term
competitive structure by the
end of 2011.
But competitive pressure is intensifying.
SCORE – the programme
to secure the Group’s
future viability – not only builds
on the success of ‘Upgradeplus’
and exploits its dynamism and
its level of organisation, but also
goes one step further. The
new catalogue of measures implements
the requirements of
SCORE, which aims to boost the
performance of the company
and also take active steps towards
improving interaction
with Lufthansa Group subsidiaries.
Good results
Further action is needed in order
to optimise processes and services
and reach the objectives set
out in the LSG Sky Chefs’ Mission
for 2015, i.e. to achieve
excellence across all processes
so the company can offer customers
the best product ever.
Despite the difficult market
environment, LSG Sky Chefs is
also striving to significantly
boost its sales and profitability
by 2015 in order to sustain the
future viability of the company
and offer its staff prospects.
Since 2010, global perfor -
mance improvement initiatives
have been up and running in the
Procurement, Production and
Sales areas, with successful results.
As part of SCORE, these
initiatives have now been extended
to the Product Engineering
division. The aim is to
develop products and meal
components tailored to individual
customer requirements
and, by improving the integration
of the Procurement and
Production areas, to reduce the
complexity of LSG Sky Chefs’
product portfolio.
Furthermore, SCORE projects
have tackled structural issues
with a view to developing a sustainable
business model, also
for mature markets such as the
company’s two biggest markets,
Germany and the United
States, where the company
generates roughly half of its
business. SCORE is also concerned
with lowering indirect
costs (lean administration),
critically reappraising the
company’s global network of
200 locations and improving
personnel cost structures.
Ongoing talks
Lean administration projects
were launched in both regions at
the end of 2011 with the aim
of establishing administrative
structures that are in line with
current developments and
processes. The company’s network
of locations has also been
significantly reduced in the
United States. In Germany,
meanwhile, scenarios are being
developed to adjust capacities to
meet demand. The company’s
management and the employee
representatives have been in
talks on wage and personnel
cost structures since 2010.
By implementing all these
measures, LSG Sky Chefs is taking
on the major challenge of
meeting the differing demands
of all its stakeholders – in particular
customers, staff and
shareholders – and of maintaining
a competitive edge in a difficult
market environment. In a
global company with a very decentralised
structure, communication,
teamwork, commitment
and leadership are absolutely
essential in order for
the company to respond swiftly
to changes and to maintain its
market lead in the long term.
Josefine C.
oliver2002 is offline