This case study is related to sea transportation industry(#service industry #supplychain,this has been derived from a live project. The supply chain segmentation is proposed by the author .It has also been demonstrated that for transportation industry asset up time is the most crucial KPI and Rapid Response Inventory management module can simplify the process of maintenance of the assets.

1. Peel your oranges before you eat

2. Ship spares procurement by segmented supply chain(Video)

3. Cheapest traffic means
Plays important role in international trade.
Possesses high load carrying capacity.
Requires cheap motor powers than for airplanes.
Does not require any special infrastructure like roads, and airports.
Ship spares procurement by segmented supply chain

4.  Availability of excess capacity and slow growth in international trade is
dragging the industry, and putting downward pressure on the charter rates.
Reduced cash flow ,and issues of dept servicing on loans taken for assets in
the 08-09 when assets prices were high will continue to hurt the industry
Dry Bulker market will be badly hit on account of new builds joining the
fleet, and bunker prices are likely to stay firm
Container and tanker segment will some resilience ,however it is unlikely to
hold its turf through the year.
Bottom line will be under severe pressure ,and some
segments may also report net loss
Ship spares procurement by segmented supply chain

5.  % Rate of discharge of cargo from the vessel at the port
 % Non stop destinations operated
 % on time delivery
 Fuel Consumption /hour
Incident free Voyage
Sustainability
Ship spares procurement by segmented supply chain

6. S.No Y (X)
1  Rate of discharge of Condition of cranes,port
cargo from the vessel congestion
at the port
2  Non stop Condition on Main Engines,
destinations operated Auxiliary Engines, Propulsion
Systems
3 %on time delivery, Do
incident free voyage
4 Fuel Consumption Do
/hour
Three of the four KPI of sea transportation business depends upon the maintenance of the
Ship vessel
maintenance is
Y:Process Output
the life line of
X:Drivers which lead to the
this industry
outcome

7. High
MONTHLY REVIEW WITH SHIPS CRITICAL(CLOUD BASED MONITRING)
L
e
a
d Rapid Response
Inventory
management module
T
i
m ENGAGE 1 OR 2 SUPPLIERS GO FOR
VENDOR MANAGED INVENTORY
ANNUAL CONTRACTS
e
Low High
Operational Impact
Ship spares procurement by segmented supply chain
PEEL YOUR ORNAGE EFFECT
“Treat them all the same by treating them differently.”
This quote comes from The 7 Habits of Highly Effective People by Stephen Covey.

8. BEFORE AFTER
NON STRATEGIC SPARES WERE THESE ITEMS WERE PUT ON ANNUAL
PROCURED ON SPOT BUY BASIS CONTRACT
LOW IMPACT LONG LEAD THESE WERE NOW REVIEWED
ITEMS WERE IGNORED ON MONTLY BASIS
HIGH IMPACT LOW LEAD TIME VENDOR MANAGED
ITEMS WERE ALWAYS ON HOT INVENTORY INSURED 100%
LIST(80% OF THE TIME) COMPLIANCE
ASSET OPERATIONAL AFTER INTRODUCING RAPID
DEFICIENCIES DUE TO RESPONSE INVENTORY
SHORTAGE OF HIGH IMPACT MANAGEMENT MODEL
,HIGH LEAD TIME ITEMS ,ASSET UPTIME CAME CLOSE
TO 99% AGAINST 75% IN THE
PREVIOUS SET UP
Ship spares procurement by segmented supply chain

9. Information silo’s in the older system: Poor visibility in the supply chain
Tech Dep't: Ch Supply Chain & Ship safety dep’t
Ship Staff
Engineers Procurement
Dep’t
Shows distorted flow of information;use of excel sheets or verbal requests

10. Information Flow in the Rapid Response inventory management model
spares procurement by segmented supply chain
Tech Dep't: Ch Supply Chain Ship safety
Ship Staff Engineers & dep’t
Procurement
Shows designed flow of information Dep’t

11. Supply Chain Technologies used in RRIMD
Close loop flow of information for enhanced supply chain visibility
SAP MM
VIMS
CLOUD
CONCEPT:VIRTUAL STORE

12. SO HOW WAS IT ALL CONFIGURED ?
Close loop flow of information for enhanced supply chain visibility
SUPPLIERS MARINE
ON VMI ERP ENGINEERS
SUPPLIERS
ON ANNUAL
Cloud CONTRACTS SHIP(CUSTOMER)
VIMS
MONTHLY
REVIEW
Virtual SUPPLY CHAIN
stores AND
RRIMD PROCUREMENT
DEPTT

13. BUSINESS RESULTS
Close loop flow of information for enhanced supply chain visibility
 The procurement process became visible
After putting low impact items on contract the daily transaction s reduced by
50%
Putting high impact short lead items(lubricants) on vmi ensured complete visibility
in the supply chain
Material planning and on time deliveries, came up to 95% from earlier score of
70%
Avoiding spot buying helped us get better prices due to economies of scale
Suppliers were connected to cloud ,so that they were able track their payments
and also ensure on-time deliveries

14. BUSINESS RESULTS
Close loop flow of information for enhanced supply chain visibility
 ERP, cloud and VIMS were completely integrated through web interface
The no of RFQ/RFI came down by 60%
VMI ensured a buffer and delayed supplies were completely eliminated
VMI helped suppliers plan their raw material procurement
Office got visibility of inventory on board ,eliminating sourcing of duplicate spares
IT PUT SIMLES ON THE FACE OF THE CUSTOMERS

15. BEFORE AFTER
Ship spares procurement by segmented supply chain

16. S0 Peel your oranges before you eat
Romesh Gupta CSCP This case study has been
For comments you may write to me on prepared from an live supply
romeshguptaCSCP@gmail.com chain transformation project