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Supply Chain Project MCD

Port Supply Chain

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Supply Chain Project MCD

  1. 1. A Port Container Supply Chain ProjectMark DeaconMstr SCM
  2. 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. 2
  3. 3. Project Aim1. Improve commodity forecast accuracy for imports and exports2. Identify key commodity routes to and from a Port3. 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 revenue4. Provide management with forward knowledge about potential future supply chain issues. 3
  4. 4. Understanding the Container Supply Chain“Measurement is the first step that leads to control and eventually toimprovement.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) 4
  5. 5. 7 StagesThe 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, and7. 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. 5
  6. 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 6
  7. 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. 7
  8. 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 TEUs 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 TEUs 50000 51000 52000 53000 54000 55000•What if Commodity 1 had previously been moved by rail and whatimpact does it have on a ports strategy of attaining a consistent Source Market Intelligenceincrease in rail modal share?•What would be the effect on port road congestion if Commodity 2was previously being transported in 40 foot containers via a singletruck movement and is now being transported in two 20 footcontainers via two individual truck movements? 8
  9. 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. 9
  10. 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 10
  11. 11. Stage 6 & 7 – Benchmarking and ReportsStage 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 organisationsStage 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 11
  12. 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. 12
  13. 13. Thank you

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