I gave this presentation to representatives of APL Logistics and some of their customers. I discussed issues around supply chains aiming to be "in control" driven by a variety of corporate values.

1. SMARTPORT
MANAGING GLOBAL
SUPPLY CHAINS:
FROM RISKS TO VALUES
ROB ZUIDWIJK
RZUIDWIJK@RSM.NL
SUPPLY CHAIN MANAGEMENT

2. SMARTPORT
SMART PORT @ ERASMUS: PORT PROFESSORS
Rob Zuidwijk
Academic
Director
Research
At research
schools EUR,
TUD, etc.
Education
Self-sustained
programs
EUR, TUD, ...
External
Agendas
(Topsectors,
EU, etc.)
HIC
Global Hub
Industrial
Cluster
World Port
City
Projects
(co-)financing port
community, NWO,
EU, ...
Knowledge
Agenda
joint
continuity
agility
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3. SMARTPORT
SUPPLY CHAIN MANAGEMENT: RISK PERSPECTIVES
Risk Management
Global Supply Chains -
“Chains in Control”

4. SMARTPORT
THIS PRESENTATION
From Risks to Values
• Secure supply chains: chain visibility and chain control
• Fair trade supply chains: certification
• Low footprint supply chains: reporting
• Environmental responsible sourcing: chain of custody
Benefits of enhanced control in the chain: case study
Key Messages
• Multiple drivers to better control supply chains through risk management;
• Control complex supply chains via visibility, certification, and incentives;
• Multitude of values (economics, environment, ethics, security, …): opportunity
for innovative solutions or headache?
• New challenges to keep supply chains in control: opportunities for innovative
business models?

5. SMARTPORT
• Whereabouts of maritime container
• Multiple data sources: container
tag (GPS), vessel tracking system
(AIS), vehicle board computers,
RFID readers at terminals, etc.
• Availability of data and deviations
container voyage contribute to risk
profile
SECURE SUPPLY CHAINS: TRACKING TECHNOLOGY
Milestones
Security
Status
Source:
www.integrity-supplychain.eu

6. SMARTPORT
DISCUSSION
• It has been agreed earlier that a
shipment needs to arrive at 12 PM;
• It actually arrives at 13 PM;
• What is the value of advance
information?
FORECASTING
• Expected Time of Arrival (ETA) of a
sea vessel at the Port of
Destination should “converge” to
the Actual Time of Arrival (ATA) as
time progresses;
• What is the benefit of fast
convergence?
DATA QUALITY: TIMELINESS
time
ATA
ATA
ETA

7. SMARTPORT
BENEFITS OF BETTER FORECASTS
Alignment of arrival distribution
and planning time window
creates opportunity to reduce
expected costs.
Early arrival
Cost of re-planning or in-transit
inventory cost
Late arrival
Cost of re-planning and in-
transit inventory cost
Benefit of being in control
Opportunity of alignment

8. SMARTPORT
CHAIN CONTROL (CONTAINER LEVEL):
EUROPEAN GATEWAY SERVICES
Main Network Design Decisions
 Which inland terminals will act as extended gates?
 What capacity, frequency on the corridors?
 What prices for services?
• New business model for container
transport
• A seaport container terminal
operator that extends its gates to
inland container terminals.
• High capacity corridors (Barges and
Trains) to hinterland destinations
• Gaining control to meet modal split
targets port authority

9. SMARTPORT
Risk Based Approach Vision
• Supply chain partners share
information in data pipeline to
manage operational risks
• Governmental audit supply
chain processes to enhance
confidence
• Both may “piggyback” on each
others data and findings
Customs supervision based on
system audits rather than
intervening individual transactions
What is required to turn this into an
opportunity rather than risk?
SECURE SUPPLY CHAINS: CHAIN CONTROL (CARGO LEVEL)
Source: FP7 EU project Cassandra
Supervision aspect
Operational aspect
Security
risks
Operational
risks
Operational agents Monitor & Ctrl
Operational standard
Governance agents Monitor & Ctrl
Regulation
supervise audit
data
data
reuse, piggy-back

10. SMARTPORT
SUPPLY CHAIN RISK MANAGEMENT:
COORDINATED MONITOR AND CONTROL
Source: FP7 EU project Cassandra
To what extent is your supply chain
coordinating risk management?

11. SMARTPORT
Focal firm in control:
• requires visibility in multi-tier
supply chains
• requires certification
FAIR TRADE SUPPLY CHAINS: CERTIFICATION
The WFTO Product Label
[…] not only signify that the
practices across the entire
supply chain are checked
against the WFTO Fair
Trade Standard, but it
represents support to the
fight against poverty and
inequality.”
Source: www.sourcemap.com Source: www.wfto.com

12. SMARTPORT
Reporting of carbon emissions
• Focal firm (scope 1&2)
• Supply chain emissions (scope 3)
• Certified reporting
LOW FOOTPRINT SUPPLY CHAINS: CARBON REPORTING
Source: www.ghgprotocol.org
“… we offer
certification against
PAS 2050 and/or the
WRI/WBCSD GHG
Protocol Product
Standard”
Source: www.carbontrust.com

13. SMARTPORT
Carbon Payer
• bears all supply chain carbon
offset costs
• may create incentives for other
firms in the supply chain to reduce
emissions
Carbon Enforcer
• decides on reduction efforts to be
exercised by supply chain partners
• carbon enforcer imposes carbon
emission targets to the other firms
in the supply chain
FOOTPRINT REDUCTION IN SUPPLY CHAINS: GOVERNANCE

14. SMARTPORT
Forest Industry
ENVIRONMENTAL RESPONSIBLE SOURCING: CHAIN OF CUSTODY
retailers with markets
distributors
producers
ingredients
or
intermediate products
final products
distributed and branded
towards markets
tier 2
tier 1
tier 0
…
…
…
retailers with markets
distributors
producers
…
…
…
Mixed Channels Separate Channels
Source: Zuidwijk and Corbett
FSC Mixed “Mixed
source products are a
blend of FSC 100%,
Recycled and/or
Controlled fiber”
FSC 100% “All content
in Pure products must
come from an FSC
certified forest”

15. SMARTPORT
SAMPLE CASE: RETAIL TRADE LANE - ANONYMISED
(FP7 EU PROJECT CASSANDRA)
Administrative risks
Additional administrative handling due to low quality data
Cargo risks
Damaged or lost cargo due to wrongly packed containers
Operational risks
Additional cargo handling costs due to wrongly packed containers.
Empty
depot
Empty
depot
consignor consigneePODPOL PODPOL
physicaloperatororganizer

16. SMARTPORT
RISK MITIGATION APPROACHES AND BENEFITS
Administrative risks
• Early data completion check
• Three-way data consistency check
• Data re-use and prefilling declarations to customs
• Advanced notification of container loading
• Advanced notification of vessel arrival
Cargo Risks
• Avoid cargo damage by improved control on packaging (better weight/volume
measurement and tally man)
Operational Risks
• Improve pallet/container/warehouse utilization and reduce handling by
improved control on packaging
• Avoid demurrage and detention costs by improved alert system

17. SMARTPORT
RISK MITIGATION RESULTS
Administrative cost benefits
• Time reduction administrative handling
• Lower error rates order process
Cargo benefits
• Reduction damage rate
• Enhanced cargo security
• Enhanced compliance
Operational benefits
• Cost reduction cargo handling (better packaging containers/pallets)
• Cost reduction container transport (better utilization container)
• Cost reduction/enhanced capacity cargo storage (better utilization storage
space)
• Cost reduction demurrage and detention

18. SMARTPORT
INNOVATING SUPPLY CHAINS: CONTROL AT CARGO LEVEL
Containerized transport of
goods
X-dock
continental
(45’)
continental
(45’)maritime
(40’)
maritime
(40’)
maritime
(40’)
deep sea
maritime
(40’)
export
import
sea
side
(40’)
land
side
(45’)
X-dock
continental short sea
(45’)
X-dock both on–dock and hinterland
X-dock
X-chain X-chain
X-dock
empty
X-chain X-chain
Basic idea: optimize door to
door transport of cargo, not
of containers (but optimize
flow of equipment as well)

19. SMARTPORT
INNOVATING SUPPLY CHAINS: SUPPLY CHAIN CONTROL FOR X
X = PROFIT Ongoing business
X = SECURITY Coordinated risk management (including
government)
X = FOOTPRINT Incentives ≠ reporting standards (double
counting)
X = FAIR TRADE Reputation management throughout the supply
chain through certification, leadership
X = … ?

20. SMARTPORT
CONCLUSIONS
Key Messages
• Multiple drivers to better control supply chains through risk management;
• Control complex supply chains via visibility, certification, and incentives;
• Multitude of values (economics, environment, ethics, security, …): opportunity
for innovative solutions or headache?
• New challenges to keep supply chains in control: opportunities for innovative
business models?

21. CONTACT DETAILS
Prof. dr. Rob A. Zuidwijk
Associate Professor Supply Chain Management
Rotterdam School of Management
Erasmus University
Email rzuidwijk@rsm.nl
Web http://rzuidwijk.wordpress.com
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