Increase focus on core business and improve competitive position in the highly competitive air cargo industry.
Done.
Upgrade enterprise cargo systems to Unisys Logistics Management System and move to an Application Service Provider (ASP) model for hosting, management and maintenance of hardware and software.
Air transportation has long been a highly competitive and challenging industry – and one that is key to global trade. The past few years have been among the most difficult ever, as airlines grapple with reduced margins and increasing competition. “The biggest challenge for all airlines is the road back to financial recovery,” says Claude Morin, senior vice president of air cargo for Air Canada. The US$6.5 million airline has not been immune to market pressures.
But neither has the airline been passive in the face of a weak market. In 2000 it acquired Canadian Airlines to compete with the industry's biggest players. The merger proceeded with the integration of commercial operating schedules, harmonization of products and services, and consolidation of IT systems. The company also embarked on a major project to upgrade its core cargo systems to the latest version of Unisys Logistics Management System. In the process, it is taking advantage of Unisys Hosting and Integration Services under which Unisys hosts, manages, and maintains all hardware and software.
Air Canada is among the world's largest commercial airlines, providing transportation for passengers and cargo to more than 160 destinations. Its Cargo division contributes about US $390 million. As the carrier for Canada Post, it carries more than 75 million pounds of mail annually on more than 200 daily flights.
Two Steps to Success
Air Canada had been working with Unisys since 1991, when it deployed an earlier Unisys freight management system. As the company prepared for its merger with Canadian Airlines, it realized that this system – as well as the hardware it ran on – would have to be upgraded. “We knew our existing system wouldn't be powerful enough to handle the load of the combined organizations,” says Patrice Richer, Air Canada’s IT project manager. The company had two options: invest in new hardware and software or outsource its freight management system.
After careful analysis, the company determined that outsourcing would be the most effective solution. “We decided that running computers wasn't our core business, so we asked Unisys to host it for us,” says Morin. “Unisys has more than enough capacity to handle our needs, and its infrastructure costs are shared among all its outsourcing customers.”
Air Canada took a two-phase approach to the project. In the first phase, completed in 2001, it outsourced its existing freight management system to Unisys. In the second phase, completed in July 2002, the company moved to the hosted version of Logistics Management System (LMS) which Unisys runs for Air Canada and other clients.
A Textbook Example
Deploying the new solution involved more than just installing software. “Over the years we had made numerous in-house adjustments to the Unisys solution,” Morin explains. “The system was performing quite well for us, and we didn't want to lose those enhancements. Unisys worked closely with us to incorporate our unique developments into their hosted solution.”
The next step was to transfer databases to the hosted solution and to integrate it with other Air Canada systems. “For example, we have a load-planning system to handle weight and balance when we load an airplane,” says Morin. “That will be linked with the logistics system, so weight and balance can be processed automatically.”
The final step was training the 2,500 Air Canada employees who will use the new system. Morin reports that user training, like the rest of the project, proceeded smoothly. “This has been a textbook example of cooperation between Unisys and Air Canada,” Morin notes. “We've had open communication, excellent planning and the desire on both sides to make this transition succeed.”
Now Air Canada has access to timely, accurate information about the identity, location and movement of cargo – down to the individual piece level as well as better reporting and data analysis features. What's more, the solution is available over the Internet, which allows enhancements to be put in quickly and provides easier connectivity for remote stations and partners.
LMS is hosted at a Unisys data center to ensure the highest levels of availability and security. The center is connected to two power grids, with automatic failover between them. It's also protected by an uninterruptible power supply (UPS) and diesel generators that activate within seconds of a power loss. “Unisys hosts the entire solution and handles day-to-day operation and maintenance,” says Christopher Shawdon, vice president of logistics solutions for Unisys. “That's transparent to Air Canada users, who simply use the system exactly as they always have.”
Easy to Own, Easy to Use
Air Canada anticipates a broad range of benefits from its new approach. “One of the biggest benefits is that the new system is easy to use,” says Morin. “It will be much more efficient to train people, and for them to use the system.” In addition, the system offers built-in safeguards to protect against errors and ensure information accuracy. “That translates into a lot less work at the back end, and meets our customers’ demands for reliable information on the status of their goods,” Morin observes. “That means higher customer satisfaction.”
Another key benefit is that LMS is Web-based, so Air Canada locations across the globe can access the system over the Internet. “That means a dramatic cost savings in terms of deployment of systems,” Morin points out. It also means the ability to offer e-business services to customers. “We can do things like allow customers to make electronic bookings over the Internet,” says Morin. “So it positions us to compete more effectively.”
The final benefits derive from the Unisys hosting services. By offloading management of both hardware and software, Air Canada avoids the problems and expenses of making large capital investments, keeping up with the latest technology, and training and retaining costly IT staff. Instead, it has access to a state-of-the-art infrastructure supported and maintained by Unisys experts. With predictable costs and access to all the computing power it needs, Air Canada can respond more quickly to market changes and maintain its competitive edge.
“We've come to realize that we're in the cargo business, not the computer business,” Morin concludes. “We do a good job of moving cargo. We let the experts run the computers.”
