Container Supply Chain

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  • 1. MTL 512Supply Chain management and Security Field StudyG8

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 CouncilG8 2 Thursday, November 8, 2012 3. SCOR ModelSupply Chain Operations Research 1) Plan 2) Source 3) Make 4) DeliverG8 3 Thursday, November 8, 2012Source: 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.G84 Thursday, November 8, 2012 5. Four Categories of Supply ChainOperations 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 subjectShipping Container Supply of Shipping ContainersProduct offer Ships space Ships cellular spaceShips andShips, ContainersPrimary toolsPortsand Ports 6G8 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 toContainer loaded on boardLaden container destination sent to portG8 7Thursday, November 8, 2012 8. Demand Forecasting andPlanning 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 vscontainer type) Competitive environment (i.e. port rotation ofother carriers vs global trading pattern)G8 8Thursday, November 8, 2012 9. Empty Container Supply andDemand Complexity Port said Colombo Singapore Imports ExportsImports 15 X 2015 X 20 25 X 20 Exports50 X 40 50 X 40 30 X 40 25 X 20 30 X 40 Surplus = 10 X 20 Deficit = 20 X 40G89Thursday, November 8, 2012 10. Forecasting methods Qualitative MethodsTime-Series Methods Internal and ExternalAssumption: experts intuition orHistorical patterns of subjective opinions aboutdemand + export growth the market.rates = future demand Traditional exports and trendsEXPORT FORECAST Causal Analysis Market Research Analysis Moving average,PESTEEL or market Exponential smoothingfactors and Trend analysisSimulation Export commodity data, of the ports exportsetc. Seasonality analysisG8 10Thursday, 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 ports forecast.Methods used to reduce forecasting errors Annual Budget 2012 >> August 2011Realistic approach Port pairs (Colombo/Hamburg)Mathematical approach Container Type wise (20/40/ or special types) Three Months Forecast Monthly Forecast Weekly Forecast G8 11Low usefulness 2012Thursday, 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 SummaryPls do not enter data here Sector wise SummaryPls do not enter data here BUDGET 2010 AG Arabian Gulf10037950950501050100 100 300 137900 RS Red Sea0000 0 00 0 00 IS Indian Sub Continent 0000 0 00 0 00 EM East Mediterranean410 1370 413 2081 8511960410126429383088450 EE Europe East Med. 71000 4 1963 66519537 66913451313850 WM West Mediterranean 4771912 1180 6141585 47 62612991021089 EU Europe131760 121733 1551104131 276 683 359351 US North America 103 1093 243 1371 3121461103 5551213 901595 FE Far East 0000 0 00 0 00 Total7981068843 160226471745798349077786822235 G.TTL Bud. 20101,5961,686 5,2941,59615,556 0G8 12Thursday, 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)G813 Thursday, November 8, 2012 14. Sea Container Supply Chain (Limitations: Lines container purchases to the main fleet are not within the scope of study) Supply Sources Key Contributors Warehouses &CustomersDistribution CentersLaden ImportsRepairs & Washing Importer CFS RentEmpty ImportsCFS Lift-On/Off Port Demurrage/rentOn-hired/LeasingPort StevedoringExporterAvailability costLogistics & Maintenance cost 14Inventory Cost Thursday, November 8, 2012G8 15. Supply Chain Integration Demand is uncertain Customization is High Scale economies are LowG8 15Thursday, November 8, 2012 16. The domestic context and use study for the benefit to Sri LankaAnother Paradox: SL imported 13,005 TEUs Empty Containers ????Majority of imports come in 20s while Exporting commodities arepredominantly in 40s Cost to carriers: USD 32,302,047 for five months (@USD 318.75 per REPO- L&D THC and Slot cost) = USD 78 Million annuallyG816Thursday, November 8, 2012 17. The significance andrecommendations 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 locationsG8 17Thursday, November 8, 2012 18. Thank youG8 18 Thursday, November 8, 2012