Project Report | Design Innovation 4.0 in Supply Networks by Yu Huang

ID 5311-19 Design Innovation 4.0 SITA Baggage-free Travel

5335817 Luxin Huang 5291208 Yu Huang 4148134 Siraadj Salarbux 5237491 Yash Singh

Contents 1.

Introduction

Methods

2.1 2.2 2.3

Stakeholder Analysis TOWS Analysis System Map

6 7 7

Market and Competition

3.1 3.2

Insights from Cruise Ship Market: Insights from Porter Five Analysis:

8 8

Supplier Relations

User Overview

5.1 5.2

Customer segmentation Persona and Desired Customer Journey

9 10

Processes and Systems

6.1 6.2

Current Processes at Cruise Terminals System of Silos of the supply chain network

11 11

Solution

7.1 7.2 7.3 7.4

System Integration Viewpoint Additional Services: Using Data as a Strategic Asset Technology Adaptation Business Model

12 14 14 15

Implications

Roadmap

10.

Further Suggestions

11.

Closing Remarks

12.

Reflection

13.

Literature

Figures Figure 1. Figure 2. Figure 3. Figure 4. Figure 5. Figure 6. Figure 7. Figure 8. Figure 9. Figure 10. Figure 11. Figure 12. Figure 13. Figure 14. Figure 15. Figure 16. Figure 17.

Power-Interest Matrix System Map Karlijk Matrix Customer Segmentation Quadrants Current Processes Current Cruise and Airline System Connected Cruise and Airline System System Viewpoint Unified Passenger Identity System Integration: Additional Services Technology Adaptation Business Model Canvas Cash Flow Direction Tactical Roadmap Optimisation of Delivery Service Screenshot of Sprint Board in Jira Screenshot of Sprint Board in Jira

6 7 9 10 11 12 12 13 13 14 15 15 17 18 20 22 23

Management Summary Opportunity The cruise ship passenger market has shown an impressive passenger growth of 60% between 2009 and 2019, generating a pre-pandemic revenue of over 27 billion US dollars (Statista, 2021). However, despite the positive trend, digital technologies advancements in the cruise ship industry have been lagging compared to the aviation industry, which prevents them from augmenting their core business value of providing a seamless experience to passengers. In particular, passengers today have to carry several heavy bags between cruise ports and airports, which introduces several inconveniences in their journey. Such challenges can serve as opportunities for leading Information technology providers like SITA to diversify their market share through a new set of products and services tailored to the cruise industry. This report aims to develop a digitally equipped supply chain solution that facilitates seamless baggage transfer between cruise ports and airports.

Analysis and Solution

Implications and Future Research

To establish a meaningful context and business environment, the report analyses different stakeholders of the supply chain, identifies the strengths, weaknesses, opportunities and threats of SITA as a service provider and considers the different competitive forces that control the market dynamics. The findings are complemented with empirical data based on the cruise market study and result in strategic action points which influence system requirements and guide new supplier relationships with delivery service providers. Further, investigating the current processes and systems and customer personas and journeys provides an understanding of the different socio-technical aspects that must be considered in the design. Based on our analysis, we prescribe a solution based on interfirm system integration and interfirm collaboration. The system integration enables a unified passenger identity which supports the seamless transfer of luggage from cruise ports to airports, thereby reducing inconvenience for passengers. Since different stakeholders would like to view the same solution from a different perspective, multiple viewpoints such as system viewpoint, data flow viewpoint, business processes viewpoint have been created. Based on the principles of Industry 4.0, the solution also emphasises how the data from system integration can be leveraged securely to create additional analytics services for different supply chain partners. The report also aims to describe the technology adaptation needed to transition from the existing systems to the new systems. Further, in order to understand how the solution can create, deliver and capture value, a business model canvas is created that can be used to influence SITA’s business model innovation.

To ensure the findings and prescribed solutions are of practical relevance, a section on implications discusses the possible new development in supply chain partnerships, processes, organizations structure of SITA and the financial aspects. The roadmap provides a strategic plan by highlighting how different activities can be categorized in three different horizons to achieve the solution and augment it further. The scope is limited to addressing the problem of transferring baggage between cruise ports and airports and creating value of the same. However, based on intriguing findings of the current research, new research directions are proposed which would be conducive for SITA to lead innovation in the cruise-ship and airline industry.

1. Introduction Problem and Scope The ability of an airport to attract or retain a significant airline hub is a critical component in which the airport’s luggage handling system has an essential role in keeping passengers pleased (Nice, 2001). SITA is the world’s leading specialist in air transport communications and information technology. Currently, SITA is serving 95% of international destinations, including collaboration with over 2.500 airlines, airports, ground handlers, and governments (SITA, 2021). This means that SITA's services have a huge role in perceived passenger satisfaction. On top of that, SITA wants to extend its business by including the cruise ship market in the customer journey process, as seen in Appendix 1: Market SITA. The goal is to have an effortless and cost-efficient baggage transfer for passengers which flexibly connects cruises, airports and other locations such as passenger homes and hotels. Baggage transfer for passengers should be fast and secure. For SITA to establish a viable solution, further research is needed. This report aims to create a business model including its implications for SITA. This business model needs to take different stakeholders in mind. For this, the following scope constraints have been used:

*More details about the process and its scope definition

Location:

Stakeholder analysis and TOWS analysis are conducted

• The geographic constraint is limited to the Netherlands

understanding of stakeholder dynamics is needed

Process: • Starts at the embarkment of the cruise ship and ends before the baggage check at the airport. • Identify points where bags and passenger can be digitally tracked System: • Focusing on software systems and integrating the cruise and airline system • Focusing on software systems and integrating the delivery track and trace and SITA track and trace

Scalability: • Regardless the geographic constraint, how to implement the business model on an international scale should be considered. 6

can be read in Appendix 1: Market SITA.

Figure 1. Power-Interest Matrix

2. Methods to understand SITA and its environment better. A basic to develop a suitable solution that satisfies as many stakeholders as possible. Therefore, the complete system has been summarized in a map showing how the different actors are interlined.

2.1 Stakeholder Analysis A stakeholder analysis needs to be conducted to locate the various actors and understand these better for the purpose of SITA expanding to the cruise ship market. In Appendix 2: Stakeholder analysis, the different stakeholders are listed, including their interests and connections with SITA. Also, these stakeholders are plotted in a power/interest grid, as can be seen in Figure 1. There are two important points to mention: Firstly, transfer agencies are added to the grid twice. The one in quadrant B is a one-to-one

Figure 2. System Map

relationship of SITA with the transfer agencies, which means there is a single big company with which SITA has a partnership. The one in quadrant D is a one-to-many relationship, which means multiple smaller transfer agencies are in contract with SITA. The pros and cons of these relationships are discussed in section 4. Secondly, consumers (quadrant D) are the endusers of all stakeholders in quadrant B except for SITA. All actors ultimately will try to provide value for their end-users to gain long-term benefits themselves. SITA has its own customers/ clients (e.g. airlines) and these clients have their customers they provide services for.

2.2 TOWS Analysis A TOWS analysis, like SWOT, involves identifying an organization's strengths, weaknesses, opportunities, and threats. On top of that, it will combine internal and external aspects to identify appropriate strategic choices that an organization may follow. It may help a firm identify opportunities, reduce threats, overcome

weaknesses, and maximize strengths (TOWS, n.d.). There are three critical strategies concluded from the TOWS analysis. Firstly, SITA should use existing capabilities to innovate and optimize the cruise line to airport delivery. Since SITA already has years of experience with airport luggage handling, similar systems can be used for cruise lines. Secondly, the pandemic can be used to set up/negotiate new systems which will provide more value to passengers. Brand reputation and business expertise can be used to leverage the position of SITA. Lastly, establishing innovation labs/skunkworks to enable creative and fast development. SITA will operate faster in the new industry as an incumbent company. The complete TOWS analysis can be read in Appendix 3: TOWS analysis.

2.3 System Map The different stakeholders and its connections have been visualised in Figure 2. This visualisation is used to understand better the system that needs to be created. 7

3. Market and Competition Landscape This section is divided into two parts. The first part shows the insights extracted from the cruise ship market analysis. The second part summarises the insights obtained from Porter’s Five Forces analysis.

3.1 Insights from Cruise Ship Market: A detailed analysis of the cruise ship market is show in Appendix 4: Cruise market data, from which the following key insights were yielded: 1. The global cruise ship market is dominated by three key parent companies which include Carnival, Royal Caribbean International (RCI) and Norwegian. Carnival possesses the highest market share of 37.1 %. Other smaller cruise lines possess a significant market share of 29.2%. 2. The number of passengers grew by almost 60% between 2009 and 2019, until the pandemic resulted in a steep drop. The prospects for the cruise industry, however, seem optimistic as the economies emerge out of the pandemic, which can be validated by the two-fold increase in the number of the passenger between 2020 and 2021 3. Europe is the second largest passenger source with 3.5 million passengers. The passenger source can be further drilled downed to Germany: 1,068,900, France: 374,100, Benelux : 97,900. 4. Most cruises in Amsterdam port operate between months of May and October representing a predictable seasonal trend.

3.2 Insights from Porter Five Analysis: Entering a new market is a strategic decision that requires a good understanding of the competitive landscape. While there are currently no direct competitors in the market of interest, the dynamics of the competition can be identified in the underlying economics of the industry (Michael & Porter, 1979). Porter’s framework analyses different competitive forces. • Threat of New Entrants: The market under consideration has high barriers to entry. This can be attributed to three primary reasons: capital investment needed for development, process complexity and network of stakeholders involved. Given SITA's financial 8

strength, experience in baggage management and existing partnerships with airports and airlines, SITA can leverage this to their advantage. • Power of Suppliers: In this research, baggage transfer agencies are considered the supplier of interest. SITA must establish a balanced power relationship with its supplier. Furthermore, to ensure a sustainable relationship that allows for interaction between the people and systems, a strong emphasis must be laid on co-creation. • Power of Customers: Buyer-seller relationships are often driven by resource utility and market scarcity and can be controlled through coercive (punishment) and non-coercive (assistance) practices (Rehme et al., 2016). To maintain a power balance and positive relationship with buyers ( both cruise lines and cruise passengers), SITA should focus on noncoercive practices. Distinctive product offerings and complimentary services can achieve this. • Threat of substitutes: Forward integration by delivery service suppliers and luggage shipping agencies like Eelway, Sendmybag and Yamato transport can be recognized as significant threats. A service differentiation strategy (based on both technology and partnerships) can be used to develop and maintain a competitive advantage. A more detailed version of the Porter analysis can be found in Appendix 5: Porters Framework

4. Supplier Relations Outsourcing Delivery Services The baggage must be physically transported from the cruise ship terminal to the airport terminal. Considering SITA’s core competencies and the company's strategic vision, baggage transportation must be outsourced. Given this, baggage delivery service providers are the main suppliers in this research. The possible relationships are analysed using the Karlijk matrix, which serves as a strategy for modern purchasing (Kraljic, 1983). This matrix can be seen in Figure 3. Two feasible relationship models were analysed : • Routine Transactional Relationships: The product or service is easily available in a routine transactional relationship. In such a relationship, the actors are not deeply invested in each other, and the switching cost is low. Therefore the purchasing risk is low. SITA may work with several delivery service providers to arrange ad-hoc services in the given context. • Strategic collaborative relationships: The buyer and supplier develop a partnership built on long term contracts, fair agreements and collaborative support. While the risks involved are high, they are often shared, and strategic interfirm collaboration results in higher responsiveness and superior performance of the supply network (Kim & Lee, 2010). Strategic collaboration also facilitates inter-system communication between SITA systems and delivery service providers. This

Figure 3. Karlijk Matrix

can be instrumental in ensuring bags are tracked, traced and accounted for during the transfer process. The analysis shows that the benefits of a strategic collaborative relationship outweigh the routine transaction relationship in this case. Further insights from market data emphasizes a predictable passenger influx that does not require an ad-hoc service. Therefore, we recommend strategic collaboration as the preferred relationship model between SITA and the delivery service providers, fostering reliability, resilience and service excellence.

5. User Overview

to direct and validate service design choices seems a must-

including variants on the four main types (LOTAME, 2019). To come up with the different customer types, some desk research on cruise line customers is conducted. Afterwards, people were interviewed who recently have been on a cruise ship.

do. In this chapter, customer segmentation is established,

The information obtained can be found in Appendix 6:

Passengers are the end-users who will use the luggage service provided by SITA. They will purchase the service from SITA’s customers, namely, cruise lines and airlines. Both customers benefit by providing extra value for passengers. Therefore, looking at passengers more closely

and different customer personas are created.

5.1 Customer segmentation The four primary categories of market segmentation are demographic, psychographic, behavioural, and geographic segmentation. However, one can apply many additional tactics,

Cruise Ship Customers and Appendix 7: Interview Cruise Ship Customers, respectively.

This desk research and interviews resulted in a behavioural and partly demographic segmentation. Since the project's scope is within the Netherlands, the segmentation is geographic 9

to a certain level by default. The matrix exists out of 4 quadrants and is divided by luxurious and economic on the Y-axis and vacation-oriented and transport-oriented on the X-axis, as shown in Figure 4. Luggage free transport appeals to the luxurious quadrants. Also, vacation-oriented travel is more popular than transport-oriented travel, which is concluded out of the interviews. Therefore, the target group of the solution for this project will be in Quadrant A (left-top). What the different segments include can be found in Appendix 6: Cruise ship customers.

5.2 Persona and Desired Customer Journey SITA is a B2B-driven organisation. Logically, they investigate the interest and needs of their direct customers, such as airlines and airports. However, this would neglect a stakeholder, which is not significant at first glance with its low power and high interest in Figure 1, namely, consumers. Consumers, also known as cruise and airline passengers, are end-users. SITA’s direct customers do not only try to generate value for themselves in terms of improved processes and reduced overhead cost but also try to improve passenger satisfaction to improve consumer loyalty and potentially provide additional income streams. For this reason, persona and customer journeys are created to know better about endusers. See more in Appendix 8: Customer Personas and Appendix 9: Customer Journey.

Some important insights are summarized below: • Luggage on the cruise ship can differ at the end than from the beginning. Therefore, there should be a control point on both sides. • Luggage destination can change. There should be clear deadlines for changing luggage which should be communicated with the pickup service. • Luggage should be traceable for the consumer. In other words, the process should be transparent. • Consumers should get notifications of important information such as luggage delays, if luggage reached the destination or if the pickup service is on its way. • The technology should be easy to use, and there should be assistance available when the consumer is in need. • Selecting the luggage service should be 10

Figure 4. Customer Segmentation Quadrants

togglable, and the service itself should be easy to understand, including payments. Interesting consumer pain points are below: • Consumers do not keep track of the weight of bought goods at the cruise. Therefore, luggage weight can differ. • Consumers' agendas can change, especially when tickets are booked way in advance. Life happens, and last-minute things can occur, which can cause a delay in the luggage handling process. • It’s a new process that should be clear for consumers without reading too much or doing much external stuff. • Consumers might bring higher quantities of luggage now that they do not need to carry it anymore. • Consumers with kids want to use the service as a stress reliever. So, it shouldn’t give them extra steps.

6. Processes and Systems 6.1 Current Processes at Cruise Terminals This section focuses on the process of embarking and disembarking the cruise ship. The goal is to recognize the systems that passengers interact with and the necessary elements needed to create an end-to-end supply chain network thereby enabling baggage transfer between the cruise ship terminals and the airports.

Figure 5 elaborates the current process starting from the embarkation and ending at disembarkation. Key findings from this analysis are followed: 1. Cruise ports and cruise lines are less digitalized than airports. Therefore, in some scenarios, generic handwritten bag tags are used. 2. The baggage handling and passenger checkin at cruise ports are not automated by using a local system that stores unified information about the passenger, luggage and cruise ship. 3. Information about the baggage, passenger, and ship departure and arrivals is stored in the IT system of cruise lines. The Platform

management system (PMS) stores passenger and luggage information. At the same time, the Fleet Management System (FMS) stores real-time data about cruise ship departures, arrivals and delays.

6.2 System of Silos of the supply chain network In the current setup, the cruise line and airline systems are not integrated. Instead, each system has its own passenger entity linked to the cruise ship and its corresponding arrival and departure times, luggage, and the source and destination cruise port. Similarly, the airline system used by SITA (L-DCS) consists of a separate entity of passengers linked to flight (and its corresponding arrival and departure times), luggage and airport. Both systems are portrayed in Figure 6. A coherent identity of the passenger is required to facilitate the delivery of baggage from the cruise port to the airport. The cruise line systems must be connected to the airline systems to share information. The system integration will provide

Figure 5. Current Processes

Figure 6. Current Cruise and Airline System

Figure 7. Connected Cruise and Airline System

delivery service providers with crucial information about the baggage pick-up (bag tag, cruise port, terminal, arrival) and baggage drop (bag tag, airport, terminal, departure). This connection is

also essential for tracking and tracing luggage and mapping the luggage to the right passenger and can be seen in Figure 7.

7. Solution The key focus of the solution is to bridge the silos between the cruise line systems and airline systems. Further to facilitate end-to-end baggage delivery SITA must also integrate with the system of delivery service providers. Even though a single solution is proposed, different stakeholders would want to view different aspects of the solution. To serve this purpose multiple viewpoints of the solution are created. The system integration viewpoint is described in section 7.1, whereas the business process viewpoint, data flow viewpoint, entity relationship viewpoint and passenger and baggage process viewpoint are described in Appendix 10: Solution Viewpoints.

7.1 System Integration Viewpoint The collaboration activities between the supply chain partners must be supported by interfirm 12

system integration. High-level interfirm system integration will facilitate the process of baggage transfer and increase the efficiency and effectiveness of the supply chain activities Click or tap here to enter text.. The system viewpoint represents the solution that proposes integrating the IT system at SITA with the systems of the cruise lines, airlines and delivery services to create one coherent service as can be seen in Figure 8. • This viewpoint represents a core internal system called the baggage delivery application, which includes a local departure control system (L-DCS), local maritime departure control system (M-DCS) and the application logic. One of the critical features of the baggage delivery application is its modularity, under which external applications such as cruise websites, third-party travel websites (like Expedia), airline websites,

Figure 8. System Viewpoint

among others can interact with it. • A local M-DCS is proposed to complement the existing M-DCS solution at SITA. The information from multiple M-DCS is aggregated into local M-DCS, which contains data about the passengers, baggage, departure, and arrivals at the cruise ports. • The communication and coordination application uses the cruise line PNR number to retrieve the information about Passenger, Baggage, Terminal, Cruise ship, and Cruise ship arrival (PBTAC) from the local M-DCS system to facilitate baggage pickup. • The communication and coordination application uses the airline PNR number to retrieve the Passenger, Airport Terminal, Airline, Departure time (PTAD) from local DCS at the airports. These details facilitate dropping the baggage at the right airport terminal at the right time. • Using the details from the Local M-DCS and Local DCS system, a unified passenger identity (Figure 9) is created which represents a single

source of truth. • Following this, a shipment is created by making an API request to the endpoint of the delivery service provider. This request schedules timely baggage pickup by the delivery provider on the passenger's arrival. Polling requests made to the tracking endpoint of the delivery service provider send the status and real-time location of the shipment. When the baggage is successfully delivered at the airport terminal, the delivery system signals the application with a complete shipment request.

Figure 9. Unified Passenger Identity

7.2 Additional Services: Using Data as a Strategic Asset The system integration solution puts SITA in a unique position to leverage data as a strategic asset. The local M-DCS and airport Local DCS data can be aggregated into an integrated data platform as can be seen in Figure 10. This data creates a unified identity of the passenger. It also enables additional services by using an analytic engine that draws insights from cross-functional information. This section suggests four simple yet actionable B2B insights that SITA can offer its supply chain partners with its knowledge on delay and waiting times between cruise and flights. 1. Insights about passengers having long waiting times before a boarding flight can help cruise lines better target customers for offers like extended on-cruise stay. 2. Insights about passengers who have long waiting times before boarding cruise ships can help airlines better target customers to offer lounge services. 3. Airports and cruise ports can better estimate

Figure 10. System Integration: Additional Services

the influx of passengers and baggage. 4. Municipalities and governments can benefit from insights by offering city tourism offers between cruise and air travel. With increasing historical data and information about past events, machine learning techniques can be used to predict delays and the corresponding cause effect relationships between cruise-lines and airlines.

7.3 Technology Adaptation We identified the missing products in SITA's portfolio: the integrated system (as mentioned in 7.1) and a Local Maritime Departure System (MDCS). Furthermore, based on thorough research on SITA's current systems (Appendix 11), we also singled out the digital (software) and physical (hardware) products of SITA that can be directly used or quickly adapted to achieve the new process. Besides, we also picked out the products that can potentially be adapted to optimize the process. *Please refer to Appendix 11: Technology Adaptation for a complete list of products with elaborate explanations

Figure 11. Technology Adaptation

7.4 Business Model How SITA can gain revenue out of our solution can be easily understood through a Business Model Canvas illustrated in Figure 12. It is based on the value proposition which can be seen in Appendix 15. The full BMC can be found in Appendix 15: Business Model Canvas.

Figure 12. Business Model Canvas

8. Implications Providing the software-based solution in the cruise and aviation industry and providing a service to the different stakeholders involved comes with specific changes for SITA. In this chapter, the different changes are discussed, and some transformation processes are suggested.

Partnerships A completely new partnership must be formed with delivery providers in strategic collaboration. The business environment of both parties - SITA and delivery provider – are complex. Therefore, the relationship must be clearly defined (De Backer & Rinaudo, 2019). Core reasons for jointventure success need to be taken into account; • Effective internal communication and trust • Clearly defined incentives and KPI’s • Defined roles and responsibilities To build this clear foundation, SITA needs to develop a platform where the concerned delivery company gets the orders, including the needed data such as but not limited to delivery moments, places and quantities. Furthermore, there should be communication when an order is definite since passengers might have the possibility to change or cancel their order. On top of that, delivery companies need to generate profit through the partnership. The current scope has delivery distances that are the same for all luggage, namely the distance from cruise port to airport. In this case, a fixed price per unit can be considered. However, a price per unit per km should be considered when and if the service gets extended to be more flexible location-wise. Suggestions for delivery providers are worldwide players with experience in international deliveries and a welldeveloped infrastructure such as DHL, FedEx and DB Schenker. SITA should create a platform that communicates information and its payment processes between the delivery company, passenger, cruise, and airline to automate this process. Cruise lines are customers of SITA, but they are also partners. The existing partnership with cruise lines needs to be expanded and further defined. In addition, cruises have increased collaborations with the airline industry, which means collaborating with SITA could be a logical 16

transition. The first partnerships can be used to co-develop the IT software solutions and perform beta runs of the technology. The goal should be to create a transparent ecosystem that facilitates trust and data share.

Structure Some structural changes within SITA need to be made to facilitate the new services and their development, also known as transformational change. A clear definition of the changes needs to be structured(Alsher, 2018). On-site, two significant changes happen; the expertise list, which currently exists out of borders, airlines, and airports, can be extended with cruise and luggage-free travel. This implies that new departments need to be created under which a department in charge of the M-DCS and a system integration team. This last department in charge of the connection can be divided into sub-departments as it grows categorized by the different software solutions. On top of that, the already existing L-DCS department should be expanded. Furthermore, a department in charge of the platform allows passengers, cruise, aviation and delivery services to communicate automatically. Essential requirements that need to be addressed are: • Creating a shared understanding of the need for change and a shift in employee perceptions. • Selecting a group of senior managers and opinion formers who will play a critical role in garnering employee support to the change and spreading it broadly throughout the firm. • Selecting a group of senior managers and opinion formers who will play a crucial role in the education of in-house rules and similar knowledge to employees in the yet to be formed departments. • Keeping lines of communication open on essential procedures, failures, obstacles, and lessons learned from new projects.

Process SITA is a B2B hardware company for the aviation industry. At first glance, adding the cruise industry, which requires similar solutions as the aviation industry regarding luggage handling, does not seem to add significant changes.

However, the solutions provided are going in a passenger-centric direction. Therefore, these passengers need to interact more and more with SITA’s solutions. SITA’s products will provide value for both customers and passengers in the form of time and simplicity. This means that both the passenger and the customer need to be kept in mind in the designing process. On top of that, the focus of the solutions is software focussed instead of hardware. For this, we recommend looking into User-Centric Design and the lean startup model and using a combination of the two methodologies. More about these methodologies can be read in Appendix 16: UCD and the lean startup model.

Financial The provided solution of this report has a different earning model than the licensing model that SITA is used to. In Figure 2 the complete system map of SITA is depicted, the cash flow directions have been simplified in Figure 13. • DCS The M-DCS can be licensed to the cruise industry in a similar way as L-DCS system are licensed to airports . The costs associated with it are R&D and IT operational costs. Additional sources of revenue are additional analytic services based on a subscription model. • Delivery service The delivery service has its costs associated with deliveries. However, the cost per delivery does not increase with more luggage. These costs are directly associated with the travel distance. When the quantity of bags is high, the cost of delivery per bag drops. There are multiple ways to come up with a payment plan. The first one is to pay per luggage using a fixed bulk price calculated by using estimations of the amount that will be delivered that year. With this option, the risk is at the delivery service when passengers are not willing

to take the service for whatever reason. The costs can directly be referred to the passenger with a profit margin on top for SITA. The cruise and aviation industry do not require a profit on this since they can provide extra value to their passengers for free without putting in any effort. On top of that, they can upsell other products and services easier now that they know even more about the passenger whereabouts. The second option is, pay per vehicle, where SITA pays for the number of vehicles needed for the luggage. This way, the delivery service provider earns a profit margin each time a vehicle and personal is needed. The risk is on SITA when the service is not used efficiently. However, because of the change of risk, costs are a lot lower, and therefore, possible profit is higher. Therefore, we recommend a pay per luggage method which generates profit without the high level of risk. • Up-sales The cruise and aviation industry are more aware of the passengers whereabout. Therefore up-sales could be made, e.g. waiting in the lounge when it is known there is a delay somewhere. However, these sales are not directly made by using SITA’s software but indirectly due to decision-making based on insights generated by SITA. The pricing model for this software can be similar to pricing models CRM systems and other SAAS products use. This model includes a flat fee for enterprises, giving unlimited numbers of users. On top of this flat fee, modular pricing can be used for each integration, feature or anything specific (Pingrey, 2021).

Figure 13. Cash Flow Direction

9. Roadmap

In this report, the solution for SITA mainly focuses on horizon 1, system integration. While we also envision this development. Two road maps are created. Figure 14 shows the values of different stakeholders, needed data and te This roadmap can be used for operational use within SITA's internal department. The second roadmap can be used in Appendix 13. This roadmap can be showcased to SITA's stakeholders.

18 Figure 14. Tactical Roadmap [Made by Luxin Huang]

s solution on a long-term scale to show its potential for further echnology, and partner aspects of the provided business solution. for a more general and high-level perspective, which can be seen

10. Further Suggestions Multi-party Computation: Creating an integrated platform introduces sociotechnical challenges related to trust regarding data sharing, especially when users are competing with one another. One innovative solution for generating functionality of shared data without having to share to reveal the data is secure multiparty computation (MPC). MPC is a cryptography technique in which the output of the computation is visible to all parties. However, the inputs of each party remain encrypted and private. The solution mentioned in section 7.2 is based on data regarding arrivals and departures, which is less sensitive. However, valuable insights can be drawn if organizations choose to share sensitive data so that privacy is preserved (Evans et al., 2017). Research in developing MPC protocols can play a vital role in attracting new and existing partners to adopt SITA’s data platform. As a facilitator of an MPC based data platform, SITA can serve as an essential value creator for its network partners and potentially monetize the data sharing and computation services.

Short-term

Main Goals

Mechanism

Optimisation of Delivery Service Figure 15 illustrates possible directions to optimize the delivery service. The immediate vision could be realizing shipping time estimation and tracking by using cruise arrival, wait time, flight info, weather, and real-time location as 20

Bene�its

Goal

Cruise Arrival Time

Wait Time

Increase asset visibility.

Shipping Time Estimation

Weather

Improve security and red assets being lost or stolen

Tracking & Tracing

Assure customers by rela tracking information to th

Real-time Location

Technology

Automatically monitor the movement of goods.

Reduce labor costs of trac and tracing.

Flight Information

Advanced Analytics Services: Section 7.2 elucidates analytics offering based on immediate solutions and offers insights into the past and the present. However, as the number of partners and willingness to share data securely increases, it gives more sophisticated techniques of predictive modelling, machine learning algorithms, deep learning neural networks, and other statistical methods on shared information. With this, SITA can provide cruise and airline partners with insights into the future and aid autonomous or semi-autonomous decision making. This research direction focuses on using advanced analytic techniques on shared information for partners in the supply chain network, which aligns with SITA’s strategic focus and existing competencies in artificial intelligence (Isson Jean-Paul, 2019).

Data

routing algorithms APIs geolocation tagging

Figure 15. Optimisation of Delivery Service

the input data. The mid-term vision could be baggage flux management by using arrival and departure locations, consumer information, and other order details as input data. The long-term vision could be mishandling reason analysis and assistant quick trouble shooting. Even though we already listed some related technologies below in the diagram, it would be of great value to take a closer look at the technologies that might play a role in implementing these visions in the future.

Mid-term

Data

Arrival and Departure Locations

cking

Consumer Information

duce n.

Order Details

Long-term

Bene�its

Data

Goal

Smart decision-support in personnel management to lower labor cost.

Locations of Trouble

Mishandling Reason Analysis

Goal

Baggage Flux Management

Gather insights about mishandling for further improvement.

Help quickly pinpoint the troubles by learning from the historical data.

Get prepared before order crowding.

Reduce energy cost of shipping thereby reducing environmental impact.

Bene�its

Historical data about mishandling reasons

Trouble Shooting

Proactively manage baggage mishandling to minimize its negative impact

aying hem.

outliers and anomaly detection for bags preditive modeling optimization in scheduling algorithms

IoT sensor and bag tracking

heat map representaion

digital twin

11. Closing Remarks Seamless baggage delivery between cruise ports and airports presents interesting challenges and opportunities. It can be concluded that innovation in supply chain networks that consist different industry partners, requires a multifaceted approach involving people, technologies and organisations. The solution proposed in the use case research further elucidates how different entities in the supply chain can connect with one another through the integration and interaction

of different digital systems, to facilitate a mutual value creation process. Another conclusion that can be made from the findings is that data from the system integration approach lays the foundation of Industry 4.0 technologies, over which other intelligent services can be built. For IT leaders like SITA, data driven services align well with their core competencies and strategic objectives and can be crucial in maintaining a competitive advantage. 21

12. Reflection

Team Reflection Overall, the teamwork went smooth. We used daily stand-ups as part of the agile methodology to manage our teamwork. For structure and communication, we used three online platforms, Jira, Miro and Teams. One of our team members, Yash, who is already an expert on this, took the role of ‘scrum master’ and lead us through the Journey. In the beginning, we wrote down everything in our mind that probably needed to be done in the ‘backlog’, such as SWOT analysis and stakeholder analysis. Then we started our ‘sprint’ every Friday afternoon, after which everyone of us was assigned several ‘backlogs’ to do by the next Friday. During the week, we did 1-2 weekly ‘standup(s)’ to exchange our progresses and help each other out. And finally, it turns out to be efficient to work in this way.We had a quite nice time management and task divisions. It not only allows us to leverage our strengths in each task but also gives us opportunities to challenge ourselves to practice outside our ‘comfort zones’. In the second stage of this project (working on the solution part), besides the ‘sprint’ meeting, each of us take over preparing and hosting 1-2 workshops to help us brainstorm for the solution, such as the scoping session, the technology workshop and the ideation session (Figure 16 Figure 17). During the journey, however, because we kept inspired by different sources of information, we had a hard time to narrow down our scope and sometimes got lost in discussion. Some meetings were unnecessarily long (e.g. sometimes we spend the whole Friday afternoon to discuss even until 18:00). But we think this is the journey. It should be like this as we collaborate with each other for the first time and a lot of knowledge is new to us. We need time to digest and adapt to it. But obviously, we learned along the way! Besides, each of our team member wrote down several good and bad points of teamwork as followed. 22

Individual Reflection • Yash Good points: Great teamwork, collaboration and ideation. Analytical thinking and applicationoriented thinking. Bad point: Sometimes getting lost in long discussions and information. But that is a part of the journey. • Siraadj Good points: Great communication within the team due to multiple daily standups a week; fun group with team bonding activities which mostly include food. All team members have a different skill set. even the ones from the same study.” Bad point: Sometimes goals were not aligned. Long discussions were needed to align as a group again to stay in scope. • Luxin Good points: • This was the first time I use ‘agile’ method in practice, and it turned out to be useful and efficient. I would like to try to lead a sprint meeting in my next team-work project.

Figure 16. Screenshot of Sprint Board in Jira

Figure 17. Screenshot of Sprint Board in Jira

• Really nice to work in an interdisplinary team. We see things from different perspectives: me and Yu as IDE students see things more from the user’s perspective, while Yash and Siraadj as students from TPM (they also have more working experience than us) have more big-picture and technology-oriented perspective. We kept inspiring each other along the way. This brought me brand new experience of project work. Bad point: • Since I didn’t really familiar with lots of technology used in the supply chain and innovation 4.0. I had a hard time barnstorming innovative solutions so I contributed less than others to this field. I guess it is one of my limitations as a designer. But it’s good to identify it and improve it for the future. • Yu Good points: • As a team, we make good use of each strength. We complement each other's perspectives and understandings towards the problem. The MOT students contribute to a more overall and business viewpoint while the IDE students offer a

more user-centered and detailed angle. • As a team, we have a good balance in diverging and converging. (For example, I myself as a designer always tend to diverge too much and guys from MOT will save me by shouting 'stop' timely.) • We used interactive workshops on Miro board to facilitate effective group discussions and we value every member's input. • As a team, we are comfortable with using scrum method to control our work progress. We had sprint planning meeting every week in which we sit down and talk about our work and next steps together. • We had thorough discussions to make sure that everyone is on the same page. • We maintain good team dynamics! We have chill offline chitchats and even our own stickers! Bad points: • In the first half of the project, there were some misunderstandings about each other's work. But after our mid-term reflection, we fixed that by holding a series of workshops.

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Appendix Appendix 1

Market SITA

Appendix 2

Stakeholder Analysis

Appendix 3

TOWS Analysis

Appendix 4

Cruise Market Data

Appendix 5

Porters Framework

Appendix 6

Cruise Ship Customers

Appendix 7

Interview Cruise ship Customers

Appendix 8

Customer Personas

Appendix 9

Customer Journey

Appendix 10

Solution Viewpoints

Appendix 11

Current SITA Systems

Appendix 12

Technology Adaptation

Appendix 13

Strategic Roadmap

Appendix 14

Value Proposition

Appendix 15

Business Model Canvas

Appendix 16

UCD and the Lean Startup Model

Figure Figure 1. Figure 2. Figure 3. Figure 4. Figure 5. Figure 6. Figure 7. Figure 8. Figure 9. Figure 10. Figure 11. Figure 12. Figure 13. Figure 14.

Customer flow chart Cruise market data Poters framework Personas User journey map BPMN [Made by Yu Huang] Data flow viewpoint [Made by Yu Huang] Passenger and Baggage Process Viewpoint Entity Relationship Viewpoint Current SITA System [Made by Yu Huang] Strategic Roadmap [Made by Luxin Huang] Value Proposition Canvas UCD phases per iteration Lean startup method

26 31 33 37 40 42 44 45 45 46 50 52 56 56

Stakeholder Analysis TOWS Analysis

27 28

Table Table 1. Table 2.

Appendix 1 Market SITA The current market of SITA starts at customer check-in at airports and ends when customers and their luggage arrives at their location as illustrated in Figure 1. SITA wants to extend their services to the cruise ship market. For this, three steps of the complete process gets included as can be seen in Figure 2 - SITA | New market (SITA, 2021) These steps are “transport to cruise, “In the cruise” and “Transport to airport”.

Figure 1 - Sita | current market (SITA, 2021)

Figure 2 - SITA | New market (SITA, 2021)

Figure 1. Customer flow chart

If we look at the luggage free transfer that SITA wants to accomplish in the future, it can be noted that the whole customer journey is implemented in the SITA process chart. To accomplish this a few extra routes are added in the chart. First of all, there should be pick-up service points, where the consumer can choose if they want their luggage to be picked up. This can happen from starting point to cruise, starting point to airport and from cruise to airport as can be seen in the customer flow chart depict in Figure 3. The focus of this report will be on the last one of these three.

Appendix 2 Stakeholder Analysis The Stakeholder Analysis helps in understanding the different stakeholders involved in the implementation of the luggage transport process from cruise to airport and to what extent they can affect its operations.

These stakeholders are plotted in a power interest grid in the section Stakeholder Analysis. Also, the key take away are explained in this section.

Stakeholders Expectations/Interest SITA

Cruise companies

Airlines

• • • • • • • • • • • • •

Increased operations Increased company expansions Increased market share Reaching objectives Increased profit Increased operations Increased company expansions Increased market share Increased profit Provide extra value for their customers Minimal to no changes to their operations Increased customer experience Increased profit

Connection with SITA

SITA wants to enter the cruise ship market by providing value enhancing services concerning the luggage handling of passengers. SITA handles the responsibility of luggage being tagged with the right information which ensures the right luggage is on the right destination flight.

Airports

Transfer agencies

• • • •

Minimal changes Increased customer experience Increased operations Increased profit

SITA handles different services with respect to

• •

Increased profit Market expansion

Transferring passenger luggage within short

luggage handling such as check-in and tagging. But also connecting passengers to their luggage.

distances should be handled by transfer agencies. SITA can provide the middleware to exchange crucial information.

Suppliers

•

Increased profit

SITA is a hard-ware company and therefore has various suppliers.

Regulators

• • •

Solutions in line with industry standards Safe solutions High quality solutions

Regulators monitor if solutions are compliant with certain obligations. SITA has to ensure that the provided solutions are compliant to these.

• • •

Generate profit Minimized risk Growth of invested company

To be able to conduct large scale projects

Competitors

• • •

SITA has different competitors

Passengers

• • •

Fair competition Possible readiness to cooperate Learning opportunities to use for themselves Easy to use services Simplicity and user friendliness Good quality/price ratios

Investors

SITA needs investors. With these investors a relationship needs to be maintained.

End user of some of SITA’s products and services.

Table 1 - Stakeholder Analysis

Appendix 3 TOWS Analysis Internal Strengths:

Internal Weaknesses:

1.A long history of more than 70 years.

1.No existing relationships with cruise

2.An existing robust ecosystem in

industry and delivery service providers.

aviation industry;

2.Incumbency in company and its

3.Adaptability/resilience: they stay up-to-

processes.

date and resilient to changes; 4.Ready to innovate; 5.Strong sense of corporate’s social responsibility; External Opportunities:

SO:

WO:

1. Blue Sea market in

1.Using brand reputation and business

1.Building new relationships to diversify

cruise-airport industry;

expertise to form new and sustainable

into the blue-sea market thereby reducing

2. Room for improvement of

relationships.

volatility and risks.

luggage handling;

2.Use existing relations and knowledge

2.Use existing technical capabilities to

3.High-barrier industry

to overcome the high barrier

innovate and optimise the cruise line to

3.Use high barrier as extra time to come

airport delivery.

up with a good solution. New entrants also have to face the same barrier

External Threats:

ST:

WT:

1.Slow recovery from

1.Adjust movements and company

1.Trying to build up relationship with

pandemic;

strategy according to trends (S3T1T2).

companies in cruise industry as fast as

2.Find early Adopter

2.Using expertise and technology for

possible;

3.Stakeholder management

product differentiation.

2.Leverage the recovery time to iterate

3.Using existing relationships with

products with less costs.

airports to facilitate direct luggage

3.Establish innovation labs/ skunk-work

transfer.

set up to enable creativity and fast

4.Use lower passenger count for demo

development.

purposes since solutions can now be showcased on smaller scale.

Table 2 - TOWS Analysis

Additional explanation of SWOT analysis: (the number of the point in the white background is corresponding with the SWOT matrix with light grey background above)

Strength 1. A long history of more than 70 years: this means expertise/reliability of SITA with big brand reputation towards clients; 2. An existing robust ecosystem on aviation industry: around 2500 airlines, airports, ground handlers and governments, all working closely with SITA; they have services provided to around 200 countries and territories globally; and they have covered 95% international destinations; 3. Adaptability/resilience: they stay up-to-date and resilient to changes; 4. Ready to innovate: They have strong inhouse innovation department, with more than 365 patents and the newest technology implementation (e.g., biometrics, digital ID, AI and computer vision) in different business areas; 5. Strong sense of corporate’s social responsibility: they are committed to sustainability in everything they do and have been certified by CarbonNeutral® in Sep 2021, which means they have already achieved carbon neutral;

making it hard for some competitors to enter this industry.

Threats 1. Slow recovery from pandemic: business travel will take longer to recover; it is estimated that it will only likely recover to around 80% of prepandemic levels by 2024. 2. Find early adopters: it is a quite niche market, so to find out appropriate early adopters (e.g. an appropriate cruise line to start with) and to build up a strong and long-term relationship with them is the basis of SITA’s further scalability and success of this new business. 3. Stakeholder management: if the ecosystem and the business model is not well-established with barriers, even the stakeholders could take over some parts of the business and become the competitor of SITA. And the contracts with stakeholders need to be carefully think of to let them take good responsibilities within the system.

Weakness 1. No existing relationships with cruise industry and delivery service providers. 2. ncumbency in company and its processes: there is already a variety of existing products and processes, therefore SITA can move less fast than a smaller company could do; this incumbency makes a research and innovation process more expensive.

Opportunities 1. Blue sea market in Cruise-Airport Industry: seldom companies consider adding cruise into airplane travel experience of luggage transportation system; 2. Development space is large: Luggage mishandling frequency due to human error and process automation, etc. have much space to be improved; 3. High-barrier industry: the high-tech luggage transferring industry has a relatively high barrier of technology development and implementation, while SITA already had a great foundation of this, 29

Appendix 4 Cruise Market Data

Source: (Cruise-Market-Watch, 2021)

Source: Port of Amsterdam

Source: Cruise-Market-Watch, 2021

Cruise demographics: Source: (Cruise-Market-Watch, 2021) Figure 2. Cruise market data

Appendix 5 Porters Framework Threat of New Entrants: New entrants to an industry aim to acquire market share and substantial resources. The threat posed by these newcomers is depends on the barriers to entry. The following are the major sources to barrier for entry in market SITA aims to enter.

The cruise ship has high barriers to entry. This can be attributed to the three reasons: 1. Financial capital: Keeping in mind the system requirements, developing such a service requires significant capital investment in developing hardware and software systems. 2. Process Complexity: To create a seamless experience between cruise ships and airports, requires connecting objects, people and systems. 3. Network of stakeholders: A new entrant must establish partnerships with multiple actors such as cruise lines, cruise ports, delivery service providers, airports and airlines. As a large enterprise with experience in baggage management and its existing partnership, SITA can use this to their advantage. By developing and patenting certain technologies SITA may further create cost disadvantages for new entrants.

Power of suppliers: Given the validated assumption that SITA will be outsourcing the baggage delivery service and the long and stable relationship with the existing hardware and software suppliers, this framework considers baggage delivery providers as the focal supplier.

A large number of potential suppliers can be recognised to enable the delivery service. This range from established package delivery companies like DHL and UPS to more disruptive models provided Uber and Eelway. An important dimension in selecting suppliers is the power balance. Suppliers can often exercise power by raising prices or by reducing quality. Further, if the supplier has competencies that closely match SITA, there is a significant the threat of forward integration. To keep the power balance, SITA must also ensure that they are an important customer to the delivery service providers. The nature of the relationship must also be collaborative, which allows for close integration of technology and people between the organizations.

Power of Buyer: Buyer or Customers can exercise power by demanding lower prices and higher quality. Certain factors determine the power of the supplier.

Both cruise-lines and cruise passengers are potential buyers. The baggage delivery does not include a high volume of purchase, but a small purchase of high-quality service by luxury segment customers. The services offered to cruise lines must add to their profitability and compliment the service offered by them to their passengers. For the passengers, the service must offer a seamless and hassle free experience. Further it is important to address the threat of backward integration by the cruise-lines. If the service is profitable but easy to mimic and implement, cruise lines are likely to backward integrate into the market themselves. A highquality service will be crucial in ensuring the customers do not switch to other service providers; and the cruise lines do not backward integrate into the baggage delivery market.

If there are substitutes that provide similar benefits at a competitive price, it creates a substantial threat to the service offering. Delivery service providers (currently observed as suppliers) may forward integrate to offer baggage transfer between cruise ships and airports. Further, luggage shipping companies which provide door to door transfer of luggage like Eelway, Sendmybag and Yamato transport can also be potential threats. A service differentiation strategy (based on both technology and partnerships) can be used to develop and maintain a competitive advantage.

Threat of Substitutes:

Figure 3. Poters framework

Appendix 6 Cruise Ship Customers High-quality restaurants, modern fitness centers, and even environmentally friendly practices are no longer enough to receive a five-star rating for cruises (Statista Research Department, 2021). The market keeps involving and more value needs to be provided to achieve the same amount of stars. Improvement of the effortful and time-intensive process for passengers , airports and airlines could help according to SITA. The current state of baggage transfer needs to change and therefore the cruise market and its passengers needs to be understood. A study finds that Chinese cruise customers can be split into multiple segments of which family leisure/relaxation and natural and cultural exploration are the strongest motivations (Jiao et al., 2021). The Chinese market is outside the scope, however, its insights can be used as a indicator for the Dutch market. Interviews will be conducted to find out about the possible customer segments in the Netherlands. Furthermore, it turns out the luxury cruise customer in general expects to find value in as many places as possible which can be summarized in the following points (Rotondo, 2019; Silverstein, 2010). • Cruises offer great value per price paid because nearly everything is included. • It is possible to see multiple destinations depending on the cruise • There is a variety of onboard activities • convenient pre- and post-cruise pampering such as ground transportation from airport port and back. This can differentiate from busses to luxury cars or SUVs. • Luxury accommodations such as the view and cabin upgrades • Attentive service • Included beverages and gratuities • Fine dining options

Appendix 7 Interview Cruise ship Customers In order to protect the privacy of interviewees, we only show the name and gender of them.

Interviewee 1: Female, 29 Price of the cruise ticket: 500-600€ Route: Kyushu to Hokkaido, Japan Time: 2019 Travel purpose: for sightseeing (vacation-oriented) About luggage: She brought a lot of luggage with her. She checked in some suitcases but brought other handy ones with her together in the cabin, since it was easier for her to carry some necessities during the travel. But once she got off the cruise, it was a hassle for her to bring so much heavy luggage along the way to the hotel.

Interviewee 2: Female, 26 Price of the cruise ticket: around 30€, a short trip Route: Shenzhen to Hongkong, China by cruise, and transfer to Manchester, England by airplane Travel purpose: to study abroad About luggage: She chose this route because when she checked in the luggage in the cruise port. She didn’t need to worry about the luggage anymore. And the destination of the cruise is exactly the airport, which save her more travel time and expenses. Finally, she would claim the luggage at the airport of Manchester. It was convenient to her especially she carried a large amount of luggage. The overall travel experience is quite seamless to her.

Interviewee 3: Male, 25 Price of the cruise ticket: 50-60€ Route: Rome to Sicily, Italy Time: 2019 Travel purpose: for sightseeing (vacation-oriented) About luggage: It was a very old cruise port, so it didn't have any digitalization. It was even hard to find out the location of this port. She didn’t check in the luggage since she only brought the necessity with her. It is although a little bit hassle to take care of her luggage but as long as it saves money, it is worthwhile for her! 35

Appendix 8 Customer Personas For the persona a brainstorm is conducted to think of customer types that fit the market that SITA tries to enter. The most important criteria are that they should be cruise to airline customers, are wealthy and willing to pay for extra services including door to door baggage handling systems. This has been further thought out and resulted into the following personas; 1. Christin Bezos who is a fashion addict and CEO of a startup, 2. Mill Gates who is a married man and retired as a surgeon and 3. Aliya Winfrey who is married, has two young children and works as a Therapist as can be seen in Figure 18. The idea of a customer persona is to try and see company processes, services and systems through the eyes of the customer. For this, creating a accurate customer persona can help accomplishing this and help in understanding the customers habits, behaviors and interests. This way, services are more customercentric and generate more value for them. It is also easier to market these system/services to customer (Quicksprout, 2018).

Figure 4. Personas

Appendix 9 Customer Journey For each persona a user journey is created. The user journey shows how a specific customer goes through the 4 stages; planning & itinerary, purchase, use of service and service impression. For each of the stages the different activities are noted down, these are similar for each person. However, the emotions they go through, their goals and problems differ, therefore, also the goal of SITA gets a slightly different shape.

Figure 5. User journey map

Appendix 10

Solution Viewpoints

Business Process Viewpoint (BPMN):

The BPMN models the steps of the planned business process from the customers’ booking of service to the depar flows needed to realize the service. This viewpoint is targeted at the people who will implement the process, giving s agencies, SITA, airports, and airlines.

Figure 6. BPMN [Made by Yu Huang]

rture check-in at the airport terminal. It visually depicts a detailed sequence of business activities and information sufficient detail to make the process get across to all involved parties including cruise terminals, cruise lines, transfer

Data Flow Viewpoint: The data flow viewpoint shows the interaction between the new SITA system and outside entities including the cruise line systems and airline systems. It will be useful for software engineers to understand the data inputs, outputs, storage points and the routes between each destination. It can also be used to show the nontechnical audiences the system operating mechanism.

Figure 7. Data flow viewpoint [Made by Yu Huang]

Passenger and Baggage Process Viewpoint: The passenger process viewpoint depicts the flow of events that the passenger and the baggage go through starting from entry at the cruise port and ending at the departure check in at the airport terminal. This viewpoint can be useful for customer care executives, auditors, business process developers and the channel partners for effective understanding of the passenger and bag journey.

Figure 8. Passenger and Baggage Process Viewpoint

Entity Relationship Viewpoint: The entity relationship viewpoint supports the system viewpoint, by describing how the data aggregated from the cruise line systems and the airline systems are interrelated with one another. This viewpoint can be useful for product managers, software engineers and data engineers for designing database tables and creating relationships between them.

Figure 9. Entity Relationship Viewpoint

Appendix 11 Current SITA Systems

Figure 10. Current SITA System [Made by Yu Huang]

Appendix 12 Technology Adaptation Missing Products Missing products are what needs to be added to SITA's portfolio to realize the new process.

• SITA system integration system As stated in section 7.1, We identify the interfirm integration system as a missing link on the supply chain, which can be added to SITA's portfolio. • Local MDCS Similar to Local DCS used in aviation, we envision Local MDCS to be able to automate cruise line’s check-in and departure processes and support a wide range of self-service options.

Primary Products Primary products are digital (software) and physical (hardware) products of SITA that can be directly used or quickly adapted to facilitate passengers and baggage processing in a secure way. • SITA Bag Fast SITA Bag Fast produces the fallback tags, barcoded and IATA-compliant. These tags can be printed on any CUTE-certified bag tag printer. Similarly, a cruise company could issue a baggage label with a cruise number and passenger details on it in this way. • SITA Bag Journey SITA Bag Journey is a global baggage data repository application available to airlines and airports over the SITA ATI Cloud. Accompanied with a mobile tracking application that enables the passenger to track their bags in the same way as they would track the delivery of a parcel, it can be used to provide full end-to-end tracking information. SITA Bag Journey includes BagTrust protecting passenger information in line with GDPR. • SITA Bag Manager SITA Bag Manager is a baggage management and reconciliation system with a data base of passengers and related baggage. Relating passenger baggage to its owner on cruises is currently not an accurate process and entirely manual. SITA Bag Manager will solve this and allow baggage to be tracked. • SITA Bag Trac 48

SITA Bag Trac connects to SITA Bag Manager or SITA Bag Journey and works with third-party automatic tag readers (ATRs). It can help cruise lines electronically store and readily access baggage tracking data. • SITA Connect Internet Secure Gateway (CISG) CISG protects airport and airline networks, IT, data, and users against cybersecurity threats.

Optional Products Optional products are digital (software) and physical (hardware) products of SITA that can be adapted and retrofitted to optimize the new process. • SITA Maestro SITA Maestro provides a more automated and cost-effective way to process airline’s passengers. In a similar way, the Maritime Departure Control System (MDCS) will also help automize the passenger processing thereby improving the efficiency. • WorldTracer SITA WorldTracer® Bag Delivery Service provides a fully-automated end-to-end solution for the speedy delivery of delayed or mishandled bags. This proves the feasibility of collaborating with local transfer agency for baggage delivery service in other scenarios (e.g. cruise port to airport). • SITA Smart Path Bag Drop Smart Path Bag Drop address the need for retrofit or new-fit bag-drop requirements. We can use it to automate the process of bag drop in the cruise terminals hence smoothen the experience of passengers.

Appendix 13 Strategic Roadmap

Figure 11. Strategic Roadmap [Made by Luxin Huang]

Appendix 14 Value Proposition

Figure 12. Value Proposition Canvas

Appendix 15 Business Model Canvas Value proposition End-to-end supply chain network to enable baggage transfer between the cruise ship terminals and the airports. This will yield into faster, more systematic, customer friendlier and increased effective processes. It will also result in less overhead and more data accumulation for the cruise.

Customer segments • Cruise lines Cruise lines are in need of airlines to have flights that can be booked in combination with the cruise. Furthermore, cruise lines have cruise terminals where passengers embark and disembark the cruise. Their current bag drop and check-in system out-dates the system of the aviation industry • Airports and airlines Airports and airlines are already customers of SITA. To improve the end-to-end supply chain network to increase baggage transfer, the systems of airports located close to cruises might need to be upgraded. These airports are positively being impacted by the growth of the cruise industry. The systems need to be upgraded in such a way that the different DCS systems can communicate with each other and possible 3rd parties such as baggage transfer agencies. • Passengers Not all passengers will make use of the new endto-end supply chain network. The customers which are focussed in the design-process are the luxurious (non-economic) group of passengers with emphasis on vacation-oriented travel. For this, three persona's are created: Christin Bezos; Successful entrepreneur, fashionista and solo traveler. Mill Gates; Retired surgeon and traveling with his wife. Technology is not their strongest suit. Aliya Winfrey; young therapist, traveling with her two kids and husband.

Channels Cruise lines are years behind on the aviation industry regarding luggage handling processes. SITA can leapfrog the used technology at cruise 54

ship terminals to increase value for all customers described under customer segments. SITA can use its existing network and expertise to get in contact with cruises Airports and airlines can be approached through the already existing contact channels. Passengers can add the service through (online) travel agencies or third party ticket providers.

Customer relationships Cruises, airports and airlines have long technology life cycles after initial investment. Furthermore, new technology must fit with current technology. Therefore, improvement needs to be made according to market growth and trends. SITA is expert in retrofit solutions which means that the products are adaptable to the current processes. Passengers value has not had major influences in the technology creation of both aviation and cruise industry. By increasing their perceived value, customer satisfaction goes up. Other stakeholders can provide more revenue increasing services. These services can be expanded by researching the end-user.

Revenue streams Selling the complete improvement of embarkment and disembarkment to cruises as a service in the form of a license use. Service add-on for passengers with a fixed price per volume and/or distance. Additional features for airline and cruise line to improve their processes and decision making

Key resources The most important assets are the already existing systems described in chapter 5 and the system integration that connects an airport local DCS and the DCS of cruise-lines so that these systems can communicate with each other and share data. The large network of SITA and its corresponding knowledge and expertise are a key resource including its software developers and engineers.

Key partners • Baggage transfer agencies Transfer agencies transport the luggage from location to destination on the assigned times. For this there needs to be communication of the capacity that the transfer agency can handle at what time and the data of the luggage that needs to be transported. • Suppliers SITA is a hardware company. The components needed are delivered by many different suppliers. Cruise industry will use similar technology as aviation industry which means that the same supplier network can be used. • Cruise (line), airports and airlines These stakeholders are both customers and partners since there is need of collaboration for setting up systems and come up with a plan for the future.

Key activities Schedule timely baggage pickups and baggage drops. Track and trace the delivery. integrate with systems at services at the airport, cruise ports and delivery companies. develop reliable software and continue improving this software for customer and end-user value. Become a complete middleman that provides the right information to all actors involved including cruise, delivery companies and passengers. Develop retrofit solutions for cruise industry.

Cost structure IT infrastructure cost for running and maintaining the service. Costs towards delivery company. Develop retrofit products for cruise industry and installation. create, maintain and update the software system. R&D costs including understanding the market and customers. certification and possible patents. Establishment costs for office and test space.

Appendix 16 UCD and the Lean Startu User-centered design (UCD) is an iterative design method in which designers pay close attention to users and their demands at every stage of the process. UCD design teams employ a combination of research and design methodologies to incorporate customers throughout the design process, resulting in highly useable and accessible products for them (IDF, n.d.). The iterations of the UCD approach generally exist out of four phases as can be seen in Figure 13. The context of how different users use the system needs to be understand. With this knowledge the users' requirements can be drafted. Afterwards, the design process starts which can iterate back during the evaluation stage.

form of communication (co-location). 7. Use working software as the primary measure of progress. 8. Assure sustainable development that allows you to maintain a constant pace. 9. Give continuous attention to technical excellence and good design. 10. Consider simplicity—the art of maximizing the amount of work not done—essential. 11. Understand that the best architectures, requirements, and designs emerge from selforganizing teams. 12. Reflect regularly with your team on how to become more effective and adjust accordingly. A benefit of the use of lean and agile methods is to enable teams to validate their assumptions (Fronczak, 2021). Using such methods makes its less likely a company builds something, nobody wants. A more direct recommendation is the lean startup methodology which is depicted in Figure 14.

Figure 13. UCD phases per iteration

Software companies often use a lean and agile method. Principles on lean software are (Fronczak, 2021): • Eliminate waste • Build quality • Create knowledge • Defer commitment • Deliver quickly • Optimize the whole • Respect people Principles on agile development are (Morlion, 2021): 1. Encourage customer satisfaction by early and continuous delivery of valuable software. 2. Welcome changing requirements, even in late development. 3. Deliver working software frequently (weeks rather than months). 4. Prioritize close, daily cooperation between business people and developers. 5. Build projects around motivated individuals, who should be trusted. 6. Consider face-to-face conversation the best 56

Figure 14. Lean startup method

Both methods can be used simultaneously. According to some research combining the two methods is a method to boost software development. User-Centered Design principles focus on giving developers the tools they need to better understand user demands and find a better solution. The Build-Measure-Learn cycle and the notion of pivoting, either the problem understanding or the suggested solution, are added to the triad combination by Lean Startup (Signoretti et al., 2020).

up Model

Project Report | Design Innovation 4.0 in Supply Networks

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Figure 14. Tactical Roadmap

Figure 16. Screenshot of Sprint Board in Jira

Figure 17. Screenshot of Sprint Board in Jira

Figure 5. Current Processes

Figure 4. Customer Segmentation Quadrants

Figure 3. Karlijk Matrix

Figure 13. Cash Flow Direction

Figure 10. System Integration: Additional Services