The following page of the FF7 Remake guide contains a walkthrough for Just Flew In from the Graveyard side quest available in Chapter 3 - Home Sweet Slum.
Complete the previous side missions to unlock this one. Talk to Gwen about another beast that has been haunting the area. Your job is to get to the chests in the factory. After destroying them, you find the watch security key - open the gate to the monster.
You will face another flying creature - Cerulean Drake. The enemy is weak to wind. However, you can use any other Materia to inflict serious damage. Use physical attacks, heal and avoid the enemy's attacks.
When it is over, go back to Gwen and tell her everything.