Port Supply Chain

1. A Port Container Supply Chain Project
Mark Deacon
Mstr SCM

2. Presentation Aim & Disclaimer
People often ask me as a supply chain practitioner,
“How, when working in a government corporation, can I apply contemporary supply
chain principles in order to improve the overall port supply chain, particularly when
the organisation itself is not directly responsible for the direct management of ships
or container movements?”
The answer is relatively simple,
The organisation needs to measure, identify with, and then understand how the
various stakeholders interact in order to identify constraint points. Once the
constraint points are known, various operational, marketing, financial revenue and
capital investment strategies can be developed in order to construct what I call
“The Balanced Port”.
The data I’ll present in this PowerPoint is of a fictitious nature false and no linkage
should be inferred between presented graphs or tables to any actual Port location or
stakeholder performance. However they do serve the purpose of illustrating the
benefits that constructing a Port S&OP model can be in order to garner discussions
with various stakeholders and the various disciplines within Port related businesses.
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3. Project Aim
1. Improve commodity forecast accuracy for imports and exports
2. Identify key commodity routes to and from a Port
3. Construct a “Port Planning Model” that takes existing but disjointed data and
aligns that data to provide a fully integrated tool that identifies;
i. Shipping requirements as a function of average TEU exchange
ii. Quay Crane minimum performance versus capacity
iii. Rail minimum performance versus capacity
iv. Road minimum performance versus capacity
v. Impact on Empty Container Park operations
vi. Potential revenue
4. Provide management with forward knowledge about potential future supply
chain issues.
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4. Understanding the Container Supply Chain
“Measurement is the first step that leads to control and eventually to
improvement.
If you can’t measure something, you can’t understand it.
If you can’t understand it, you can’t control it.
If you can’t control it, you can’t improve it.”
... H. James Harrington (1991)
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5. 7 Stages
The cornerstone of the project I instigated and now managing is based on addressing the following
seven (7) key aspect;
1. Mapping out key strategic port supply chain stakeholders and their interactions,
2. Utilisation of CAD or GIS software mapping to illustrate primary Import and Export hot spots,
3. Generation of rolling Month & Yearly commodity forecasts based on past published data and
market intelligence,
4. Development of a strategic and tactical fully integrated supply chain constraint model,
5. Integration of the constraint model with a rolling financial forecast process,
6. Participation in Port Benchmarking exercises targeting supply chain initiatives as opposed to
discrete performance measures, and
7. Internal publication of a monthly Supply Chain Management “Dashboard” report to give a high
level view of the overall health of the complete port supply chain.
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6. Stage 1- Key Stakeholders
Understanding Stakeholders capabilities;
• Where are they located,
• What do they do,
• What goods do they produce,
• What stage in the product life cycle is being serviced,
• What key resources do they employ,
• What are the resources capabilities,
• Identify their capacity limits both physical & calendar, and
• Recognise potential capital investment areas
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7. Stage 2 - CAD or GIS mapping
Illustrating where the commodity is imported
to or exported from by region helps to ;
1. Provide data in an easy comprehendible
format
2. Assist in the development of supply
strategies that may influence modal
choice for moving product to and from
the port
3. Identify contestable markets by mode
4. Estimate transportation costs and
delivery times.
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8. Stage 3 - Rolling Commodity Forecasts
Why inappropriate forecasting Forecasting at the highest level results in a
can hide the true story
loss in detail, particularly seasonality impacts
60,000
50,000 which impacts on port manning and
40,000 equipment resourcing requirements
TEU's
30,000
20,000 Import
10,000 Full
0 2009/Jul 2011/Jan M+1 M+2 M+3
1 2 3 4 5 6 1 19 20 21 22
Commodity 1 15000 12000 9000 6000 3000 0 0411 0411 Wheat 27 104 54 56 57
Commodity 2 16000 20000 24000 28000 32000 36000 0412 0412 Rice 492 324 378 376 374
Commodity 3 19000 19000 19000 19000 19000 19000 0414 0414 Barley 0 0 - - -
Total TEU's 50000 51000 52000 53000 54000 55000
•What if Commodity 1 had previously been moved by rail and what
impact does it have on a ports strategy of attaining a consistent Source Market Intelligence
increase in rail modal share?
•What would be the effect on port road congestion if Commodity 2
was previously being transported in 40 foot containers via a single
truck movement and is now being transported in two 20 foot
containers via two individual truck movements?
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9. Stage 4 - Port Constraint Model Reports
Knowing actual performance by Stevedores versus
their individual constraint points at the quay-side
and landside provides a valuable insight into;
• Individual Stevedore performance,
• Forecasting trend issues by mode,
• Potential key constraints point or identification
of future constraints dates, and
• Empty Container Park requirements,
to name just a few.
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10. Stage 5 – Financial Impact
The aim is to link revenue data associated with overall TEU monthly
forecasts.
By rolling up example charges such;
• Navigation services
• Pilotage
• Container size
you can apply at a high level, an indicative financial revenue factor
Future
Past
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11. Stage 6 & 7 – Benchmarking and Reports
Stage 6 – Develop Port Benchmarking exercises targeting supply chain initiatives with other ports;
• Are S&OP processes in place
• Do regular meetings occur with key commodity stakeholders
• Are vessel size impacts taken up in future strategies
• Is a landside improvement strategy in place
• What frequency do you meet with key logistics organisations
Stage 7 -Publication of a monthly “Dashboard” Supply Chain Management report.
Purpose is to develop a simple but meaningful “traffic light” report that provides a high level
indicative “health measure” of the overall Port supply chain;
For example:
• Commodity forecast accuracy by %
• % of Commodity modal routes mapped
• Modal splits by % versus target
• Operational levels versus capacity for quay side, rail & road
• Other
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12. Desired Outcome
Supply savvy organisations understand the “value-add” an efficient supply chain will
bring to an organisation.
As outlined in this presentation there are significant benefits to government port
organisations applying contemporary supply principles that provide significantly
improved task visibility towards understanding stakeholder interactions and port modal
capacities.
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13. Thank you