container supply chain

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MTL 512 Supply Chain management and Security Field Study G8

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Page 1: Container Supply Chain

MTL 512Supply Chain management

and SecurityField Study

G8

Page 2: Container Supply Chain

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

Wednesday, April 12, 20232G 8

Page 3: Container Supply Chain

SCOR Model

1) Plan2) Source

3) Make 4) Deliver

Source: Supply Chain Council Inc. as cited in Hugos. M. (2003)

Supply Chain Operations Research

Wednesday, April 12, 20233G 8

Page 4: Container Supply Chain

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.

Wednesday, April 12, 20234G 8

Page 5: Container Supply Chain

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.

Wednesday, April 12, 20235G 8

Page 6: Container Supply Chain

Container

Shipping

Shipping

Ship’s space

Ships, Containers and Ports

Ships and Ports

Ship’s cellular spaceProduct offer

Primary tools

Wednesday, April 12, 20236

G 8

Supply of

Containers

Shipping is a complex subject

Page 7: Container Supply Chain

Supply of Sea Containers

Wednesday, April 12, 2023G 8 7

Exporter make a Booking

S line release an empty container to exporter

Exporter stuff the cargo

Laden container sent to port

Container loaded on boardShip sails to destination

Page 8: Container Supply Chain

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)

Wednesday, April 12, 20238G 8

Page 9: Container Supply Chain

Empty Container Supply and Demand Complexity

Wednesday, April 12, 2023G 8 9

25 X 20’30 X 40’

25 X 20’30 X 40’

15 X 20’50 X 40’

15 X 20’ 50 X 40’

Exports

Exports ImportsImports

Surplus = 10 X 20‘

Deficit = 20 X 40‘

Singapore

ColomboPort said

Page 10: Container Supply Chain

Forecasting methods

PESTEEL or market factorsExport commodity data, etc.

Time-Series Methods

Causal Analysis Market Research Analysis Moving average, Exponential smoothing and Trend analysisof the port’s exports

Seasonality analysis

Simulation

Assumption:Historical patterns of demand + export growth rates = future demand

Internal and External expert’s intuition or subjective opinions about the market. Traditional exports and trends

Qualitative Methods

FORECASTEXPORT

Wednesday, April 12, 202310G 8

Page 11: Container Supply Chain

Monthly Forecast

Weekly Forecast

Annual Budget 2012 >> August 2011Port pairs (Colombo/Hamburg) Container Type wise (20’/40/ or special types)

“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

Mat

hem

atic

al a

ppro

ach

Realistic approach

Low usefulness

Three Months Forecast

Wednesday, April 12, 202311G 8

Page 12: Container Supply Chain

Wednesday, April 12, 2023G 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 hereBUDGET 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

Page 13: Container Supply Chain

Critical Factors

Wednesday, April 12, 2023G 8 13

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)

Page 14: Container Supply Chain

Sea Container Supply Chain(Limitations: Line’s container purchases to the main fleet are not within the

scope of study)

Laden Imports

On-hired/Leasing

Empty Imports

Supply Sources Key Contributors Warehouses & Distribution Centers

Customers

CFS Lift-On/Off

Port Stevedoring

Repairs & Washing

Logistics & Maintenance cost

Availability costInventory Cost

Port Demurrage/rent

CFS Rent

Importer

Exporter

Wednesday, April 12, 202314

G 8

Page 15: Container Supply Chain

Supply Chain Integration

• Demand is uncertain • Customization is High • Scale economies are Low

Wednesday, April 12, 202315G 8

Page 16: Container Supply Chain

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 Wednesday, April 12, 202316G 8

Page 17: Container Supply Chain

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

Wednesday, April 12, 202317G 8

Page 18: Container Supply Chain

18

Thank you

Wednesday, April 12, 2023G 8