supply chain of oil and gas industry

· Value Chain Analysis

Delta Air Lines has increased aircraft fuel efficiency 35 percent since 2000 through improvements in inbound logistics technology, operating procedures, distribution, marketing and maintenance. As a strategic component of any business that the value chain is considered as the most important parts for companies, and Delta Airline is continuity looking for ways to improve its performance and minimize its costs, and deliver high quality and excellent customer service customers (Inbound logistics, 2011).

· Inbound Logistics (Supply Chain Management)

The first in the value chain management is the inbound logistics, where its core responsibilities are to handle the Transportation, Material handling, Storage, Communicating, Testing, and information systems. Compare to others, crew supple chain management is extremely important in the airline industry. Delta Airlines manage the supply chain as an integrated supply chain, using a new crew scheduling system that was based on the multinomial time linear programming arithmetic (AGIFORS, 2007).

Generically, a supply chain is the movement of production materials from their source to the end product. Crew supply chains have numerous inputs, many processes, which include network planning/scheduling, manpower planning, recruiting, training, crew scheduling and crew tracking, and also involved several organizational owners. Its time from materials in to end product can be a year or longer. Each process is optimized as an isolated and independent. However, there are many problems to make the crew-resourcing department to have a good handle on their procedure, and flight operations made close-in changes to crew work rules. Because of these sudden and uncoordinated actions, a crew shortage materialized overnight, or even with a lead-time of seven to eight months to recruit, train, and on-board new pilots, the airline was stuck (Wyman, O., 2011).

Afterwards, Delta Air Lines apply fleet management to give a clear schedule that lists the time, origin, and destination of all flights, and these fleet engineering services are available for variable aircraft. The operational experience gained from maintaining not only put the power behind the world’s largest fleet to work for the maintenance requirements, the program can also:

· Integrate all components of the maintenance program

· Maximize and ensure the efficiency of the maintenance spend

· Reduce administrative overhead and speed up response time

· Leverage unprecedented economies of scale and unparalleled global reach

· Streamline communications with a dedicated point of contact

· Take advantage of industry-leading operational commitments

Moreover, effectively manages the companies rotating assets, such as spare parts, interchangeable components and more (Delta TechOps, 2012).

· Operations

Delta Air Lines is providing a large variety of service to its passengers and using the most innovative operation stratagem than others. Delta Air Lines is constantly looking for ways to bring value to its customers, including value for those that pay a premium through its demand chain. One way the company has achieved this is through partnerships with other companies that offer services to travelers. According to the Breaking Travel News, No.1 Traveller is a European service that offers “super lounges” that include extra comforts to travelers through membership fees. These comforts include a travel spa, mini-cinema, private meeting rooms and conference facilities, free Wi-Fi, game rooms, bistro with drinks at no extra cost, and even chauffeur services. In 2011, Delta signed a partnership with No.1 Traveller to offer these comforts to its Business Elite and Medallion customers (Breaking Travel News, 2011). Delta Air Lines has tried the best to deliver the high quality and excellent customer service to their customers.

On the other hand, Delta spent $11.7 billion in 2011 on aviation fuel, roughly 36 percent of the airline’s operating costs. That certainly qualifies fuel cost as Delta’s key value-chain lever for margin improvement. Delta also has a good concentration of its operating hubs located in the U.S. east coast region, where fuel costs typically are higher than other regions of the U.S. According to the Wall Street Journal, Delta talks with Conoco Phillips regarding the idled Trainer Pennsylvania refinery are reported to be in a price range of $100 to $150 million, the equivalent of a new wide bodied aircraft. Estimates are that if successful, Delta could save $20 to $25 per barrel on some of its aviation fuel costs by configuring the refinery for optimized aviation production while support existing buyers for other fuel products.  Delta would also seek an experienced operator to manage refinery operations.

The WSJ indicted that whether or not this acquisition ever comes to fruition, this might be the first airline that has ever considered owning a refinery. Delta has said that its new refinery will enable it to cut down fuel spending by $300 million and ensure the availability of jet fuel in the northeast. Production from the refinery, combined with the agreements with Phillips 66 and BP, will be able to provide 80% of Delta’s jet fuel demand in the US. Process innovation can come from external or internal forces and bold thinking has been the basis of many supply chain capability breakthroughs. (Carey, S., & Gonzalez, A., 2012).

Because of the fuel cost savings Delta projects it will enjoy by owning an oil refinery, some industry experts assert that the company will be able to gain a leg up against its competitors in the east coast market.

· Outbound Logistics

Delta Air Lines main customers are those wishing to travel by air from one location to another. These passengers include both business and leisure travelers that need to fly to any of its 341 destinations. Delta’s secondary customers are those in need of transporting cargo by air around the world. Through its global network of routes, Delta has a presence in every major domestic and international market that centers on a hub system. Delta also has partnerships with several international airline companies to expand its destinations to 578 in 119 different countries. With a fleet of more than 700 aircraft of different sizes, Delta has the flexibility to adjust any aircraft to its global network. This allows it to fill the air transportation needs and wants for both passengers and cargo partnerships (Delta Air Lines, 2011).

In order for a customer to enjoy the products or services provided by a company, the company must deliver those products or services to its customers. Over the years, Delta has worked to deliver its services to all its customers. One way to help with this delivery is through Delta's 341 destinations and 578 destinations with its worldwide partners. By providing all these destinations, Delta is able to provide its more than 160 million annual customers with more convenient locations to travel (Delta, 2011).

· Marketing and Sales

As part of the multibillion-quality improvement program, Delta is focusing significant attention on the training of its customer facing staff. The enhanced training programs and seminars are being targeted to the roughly 11,000 Delta passenger service agents and supervisors who are the day-to-day face of the airline to the travelling public. It has been over a decade since Delta undertook such a large-scale training effort, and the renewed focus on service standards comes in light of Delta’s poor customer satisfaction scores in industry surveys in recent years.

Everything comes to the one who waits, nowadays, Delta Air Lines become the world's No. 1 airline company, serving more than 400 locations worldwide; also, Delta is the first airline to launch mobile bag tracking capabilities via its Delta app for smartphones, allowing passengers to track the checked baggage in real time. The airline also quietly introduced a premium service in partnership with the German automaker Porsche at its Atlanta hub for its highest tier Diamond Medallion customers. Selected arriving passengers are delivered from the plane to a waiting Porsche luxury vehicle for a ride to their cars in the parking lot or another terminal for a connecting flight. Porsche has provided the vehicles to Delta free of charge, but has placed information about the car models in the vehicles and in Delta Sky Lounges at the airport (Tsirulnik, G., 2009).

· After-Sales Service

Responding to passenger feedback for a more personal touch on the ground, Delta has already revived its ‘Red Coats’ service agents. In their role as a super passenger service agent, the ‘Red Coats’ primary mission is to fix customer problems. Easy to spot in busy airports thanks to their trademark red blazers, the Delta Red Coats carry hand held computers that allow them to handle an array of issues on the spot, such as helping customers make flight connections, issuing new boarding passes or providing food vouchers when necessary. Over 800 agents are currently deployed airside at airports across the US, as well as at Delta’s Asian hub at Tokyo Narita.

Expanding on its customer service footprint in the social networking space, Delta became the first airline to offer dedicated customer support via Facebook, as it brought the ‘Delta Assist’ Twitter service to the social network in March 2011, providing real-time travel assistance. To better serve its Spanish language customers, it also launched the Twitter channel in the fall of 2011(Airlinetrends, 2011). For the final project, add the support activities.