Transforming Procurement Through a Shared-Service Model for a National Flag Carrier
- Industry
- Aero & Defence
- Commercial Aviation
- Client
- National Flag Carrier Airline
- Service
- Management Consulting
- Solution
- Procurement Function Transformation via Shared Service Model
A national flag carrier airline operating across domestic and international routes, serving millions of passengers annually. The airline manages complex procurement operations spanning MRO (maintenance, repair & overhaul), fuel, catering, ground handling, and IT across multiple divisions and business units.
- High procurement costs driven by fragmented buying and lack of category management
- Inconsistent supplier management and contract terms leading to cost leakage
- Duplication of procurement roles across divisions inflating headcount costs
- Inability to leverage group-wide spend for supplier negotiations
- Reactive rather than strategic procurement posture
- In commercial aviation, procurement accounts for 30–40% of total operating costs, making it one of the highest-leverage functions for margin improvement
- For flag carriers under continuous cost pressure, fragmented procurement is a competitive liability, not simply an inefficiency
- A shared-service model enables airlines to centralise expertise, standardise processes, and unlock group-wide negotiating power
- Left unaddressed, procurement inefficiency compounds: cost overruns, supplier dependency, and audit exposure all intensify as the airline scales
Procurement Diagnostic & Baseline
Conducted spend analysis and process mapping across all divisions to establish a baseline of current procurement maturity, cost structure, and capability gaps.
Shared-Service Model Design
Designed the target operating model for a centralised procurement shared-service centre, including governance structure, role definitions, and service catalogue.
Category Strategy Development
Developed category management strategies for key spend areas (MRO, fuel, catering, IT) to maximise leverage and reduce total cost of ownership.
Change Management & Capability Building
Delivered structured change management, stakeholder alignment workshops, and capability uplift programmes for procurement staff.
Implementation Roadmap & Quick Wins
Defined a phased implementation roadmap with prioritised quick wins to demonstrate early value and build internal momentum.
- Procurement Shared-Service Centre Design & Blueprint
- Category Management Strategies (MRO, Fuel, Catering, IT)
- Group-Wide Procurement Policy & Governance Framework
- Supplier Rationalisation and Preferred Vendor List
- Procurement KPI Dashboard & Performance Reporting Model
- Role & Capability Framework for the Shared-Service Team
- Change Management & Stakeholder Engagement Plan
- Phased Implementation Roadmap with Quick-Win Priorities
Reduced Procurement Costs
Centralised buying and category strategies unlocked group-wide negotiating leverage, driving meaningful reductions in total procurement spend across key categories.
Streamlined Operations
Consolidation of procurement roles and processes across divisions eliminated duplication and reduced time-to-contract significantly.
Stronger Governance & Compliance
A unified policy framework and governance structure reduced compliance gaps and created clear accountability across all procurement activities.
Strategic Supplier Relationships
Supplier rationalisation shifted the airline from transactional buying to strategic partnerships, improving service reliability and contract value.
- 15–20%
- Reduction in total procurement spend across key categories
- 4
- Divisions integrated under the shared-service model
- 30%
- Reduction in time-to-contract
- 60+
- Procurement processes standardised
- 3x
- Increase in supplier negotiation leverage (consolidated spend)
- 100%
- Policy compliance across all divisions post-implementation
The programme shifted procurement from reactive order-processing to proactive value creation. A skilled shared-service team, clear governance, and embedded category management disciplines give the airline the structure to compound these gains as spend and complexity grow.
Download PDF
Get this full case study as a PDF, delivered straight to your inbox.