2. Field Study
∗ Selected organization
∗ UASC shipping Line
∗ Selected Aspect of SCM
∗ Supply chain operations
∗ SCOR -Supply Chain Operations Research model developed
by the Supply-Chain Council
G8 2 Thursday, November 8, 2012
3. SCOR Model
Supply Chain Operations Research
1) Plan
2) Source
3) Make
4) Deliver
G8 3 Thursday, November 8, 2012
Source: Supply Chain Council Inc. as cited in Hugos. M. (2003)
4. Four Categories of Supply Chain
Operations
• Planning :
– Demand forecasting
– Product pricing
– Inventory management.
• Sourcing
– Procurement and credit
– Collections
Both these operations have a big impact on the
efficiency of a supply chain.
G8 4 Thursday, November 8, 2012
5. Four Categories of Supply Chain
Operations
• Make
– Product design
– Production management; and facility
– Management
• Deliver
– Order entry/order fulfillment
– Product delivery
These two operations constitute the core connections
between companies in a supply chain.
G8 5 Thursday, November 8, 2012
6. Shipping is a complex subject
Shipping
Container Supply of
Shipping Containers
Product offer Ship’s space Ship’s cellular space
Ships and Ships, Containers
Primary tools
Ports and Ports
6
G8 Thursday, November 8, 2012
7. Supply of Sea Containers
Exporter make S line release an empty Exporter stuff
a Booking container to exporter the cargo
Ship sails to Container loaded on board Laden container
destination sent to port
G8 7 Thursday, November 8, 2012
8. Demand Forecasting and
Planning
• Sea Container SCM decisions are based on exports and
imports forecasts of a particular port.
• 4 major variables
– Supply sources of empty containers by UASC
– Demand of exporters
– Product Characteristics (i.e. commodity vs
container type)
– Competitive environment (i.e. port rotation of
other carriers vs global trading pattern)
G8 8 Thursday, November 8, 2012
9. Empty Container Supply and
Demand Complexity
Port said Colombo
Singapore
Imports Exports Imports
15 X 20’ 15 X 20’ 25 X 20’ Exports
50 X 40’ 50 X 40’ 30 X 40’ 25 X 20’
30 X 40’
Surplus = 10 X 20‘
Deficit = 20 X 40‘
G8 9 Thursday, November 8, 2012
10. Forecasting methods
Qualitative Methods Time-Series Methods
Internal and External Assumption:
expert’s intuition or Historical patterns of
subjective opinions about demand + export growth
the market. rates = future demand
Traditional exports and
trends
EXPORT
FORECAST Causal Analysis
Market Research Analysis
Moving average,
PESTEEL or market
Exponential smoothing
factors
and Trend analysis Simulation Export commodity data,
of the port’s exports
etc.
Seasonality analysis
G8 10 Thursday, November 8, 2012
11. “Forecasts are always wrong to a greater or
lesser degree” - Hugos. M. (2003)
S Line accepts(+ or -)5-10 % variation of each port’s forecast.
Methods used to reduce forecasting errors
Annual Budget 2012 >> August 2011
Realistic approach
Port pairs (Colombo/Hamburg)
Mathematical approach
Container Type wise (20’/40/ or special types)
Three Months Forecast
Monthly Forecast
Weekly Forecast
G8 11
Low usefulness 2012
Thursday, November 8,
12. Sample Forecasts
As per Bud. 2009
Please fillup the figures for Budget 2009 and Estimate / Actual 2009 and compare with your Budget 2010 figures.
As per Est/Act 2009
Sector wise Summary Pls do not enter data here
Sector wise Summary Pls do not enter data here
BUDGET 2010 AG Arabian Gulf 100 379 50 950 50 1050 100 100 300 137900
RS Red Sea 0 0 0 0 0 0 0 0 0 0
IS Indian Sub Continent 0 0 0 0 0 0 0 0 0 0
EM East Mediterranean 410 1370 413 2081 851 1960 410 1264 2938 3088450
EE Europe East Med. 7 1000 4 1963 665 1953 7 669 1345 1313850
WM West Mediterranean 47 719 12 1180 614 1585 47 626 1299 1021089
EU Europe 131 760 121 733 155 1104 131 276 683 359351
US North America 103 1093 243 1371 312 1461 103 555 1213 901595
FE Far East 0 0 0 0 0 0 0 0 0 0
Total 798 1068 843 1602 2647 1745 798 3490 7778 6822235
G.TTL Bud. 2010 1,596 1,686 5,294 1,596 15,556 0
G8 12 Thursday, November 8, 2012
13. Critical Factors
∗ UASC has more than 387,000 container units of
various types and sizes.
∗ Presence in over 204 ports globally
∗ Number of ports pairs = 28,680
∗ Complexity of SCM is obvious.
∗ Managed through online EMS (Equipment Management System)
G8 13 Thursday, November 8, 2012
14. Sea Container Supply Chain
(Limitations: Line’s container purchases to the main fleet are not within the scope of study)
Supply Sources Key Contributors Warehouses & Customers
Distribution Centers
Laden Imports
Repairs & Washing
Importer
CFS Rent
Empty Imports CFS Lift-On/Off
Port
Demurrage/rent
On-hired/Leasing Port Stevedoring Exporter
Availability cost Logistics &
Maintenance cost 14
Inventory Cost Thursday, November 8, 2012
G8
15. Supply Chain Integration
• Demand is uncertain
• Customization is
High
• Scale economies are
Low
G8 15 Thursday, November 8, 2012
16. The domestic context and use study
for the benefit to Sri Lanka
Another Paradox: SL imported 13,005 TEUs Empty Containers ????
Majority of imports come in 20’s while Exporting commodities are
predominantly in 40’s
Cost to carriers: USD 32,302,047 for five months
(@USD 318.75 per REPO- L&D THC and Slot cost) = USD 78 Million annually
G8 16 Thursday, November 8, 2012
17. The significance and
recommendations
∗ Diminishing interest by carriers
∗ Negative Impact on
∗ Exporters and importers
∗ Consumers and commodity prices
∗ An expert panel comprising
∗ Shipping experts
∗ Commodity experts
∗ Logistics & Supply chain experts
∗ Economists , may jointly find a solution to the issue.
∗ Eg.Network Services in North America has more than
75 member-distributors with more than 275 locations
G8 17 Thursday, November 8, 2012
