Supply Chain Management in Cruise

The creativity of people and sustained marketing of companies allowed the passenger liner industry to transform from a pure transport function to an almost pure tourism function into the global cruise line industry that we know today. The main goal of the supply chain, sometimes referred to as the value chain, is to create value. In an end-customers’ context, value is the measure of desire for a product and its related services 1) customer relationship management, (2) customer service management, (3) demand management, (4) order fulfilment, (5) manufacturing flow management, (6) supplier relationship management, (7) product development and commercialization, and (8) returns management. actually frame the supply chain business model. They are: (1) customer centricity, (2) operational excellence, (3) integrative management, (4) real-time responsiveness, (5) network leveraging, and (6) collaboration. cruise ships are committed to the supplies present onboard once leaving the port.

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Therefore, demand forecasting must be very precise if the safety stock is to be reduced in this space-starved environment, while preventing costly stockouts we find two main management areas: hotel and marine operations. Onboard hotel operations are comparable to a standard resort operation (Teye ; Leclerc, 1998) performing customer service functions such as customer care, scheduling activities, meals, etc. Marine operations are responsible for traditional marine functions such as the onboard power generation, ships maintenance, and navigation

On the strategic plane, what is unique to the cruise industry is that the itinerary planning will affect the supply chain design, demand forecasts, and product mix On the strategic and tactical levels, the main challenge is the mobile nature of the supply points   [They refer to the re-positioning of ship season as the "double loading season”. This is caused by a replenishment lead-time that increases as the ships get repositioned away from the supply source. Therefore a ship that had a replenishment lead-time of two days for its winter port in Miami will incur a lead-time change to four weeks when re-positioning to Europe.

This change is mainly due to transportation lead-time. As a result, for the three weeks before arriving in Europe, the logistics centre and the company’s suppliers have to process goods for the same ship twice every week, once locally and once in anticipation of the ship’s arrival in Europe] Some supplies are acquired locally (i. e. , produce), but most are shipped from the main logistics centre located in the United States. The main reason behind this is to ensure a certain uniformity of products, This centralization also greatly simplifies the tracing of products and strengthens food chain safety.

Focusing on the operational replenishment of ships, one challenge that the cruise SCM has is the short time window constraint during the replenishment of the ships. Therefore, continuous replenishment at its best rate has on average granularity of a week, ranging from as little as 3–14 days. The ships benefit from a very tiny time frame to re-supply, typically 6–8 h in port, and unfortunately the time window does not increase proportionally with the ship’s tonnage

Four main purchasing streams are represented in the main supply chain for cruise line: fuel purchasing, corporate purchasing, technical purchasing, and hotel purchasing The supply chain management of cruise ship can be defined as: the timely coordination of supply in anticipation of a demand in support to service delivery excellence, think of the supply chain as a whole in this organization as a supporting mechanism to guest satisfaction Another characteristic that differentiates cruise supply chains from other ervice supply chains is that it’s a very reactive environment instead of being proactive. They are always racing to make sure that they meet a given timeline for a product to reach the ship. As a senior supply chain manager explains, “From a supply chain perspective, it’s probably one of the most challenging that you can find in any industry just because of the variety of stuff that we have to deliver in provision to the ships. The fact that we do it in so many locations around the world and the precision that is required. It’s just a different world.

I always say it redefines just in time” but the nature of the cruise business dictates service excellence and going beyond expectations. There are three main challenges faced by that industry. The first is to sustain a continuous large global deployment, while maintaining service quality for the final customer. The second is the sourcing of a great variety of product in large quantity, requiring a dedicated team of commodity specialists. Lastly, the third challenge is the short time window on turnaround days that requires a well-coordinated planning.

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