Measures of supply chain collaboration SCC for container

Measures of supply chain collaboration (SCC) for container logistics Young-Joon Seo, John Dinwoodie, Michael Roe, Maritime Economics and Logistics, 2015

SCC in South Korea • Practical instruments comprised 23 measures of SCC • large-scale survey of 178 South Korean maritime logistics professionals. • SCC is underpinned by information sharing, knowledge creation, goal similarity, decision harmonisation and joint supply chain performance measurement • SCC is between ports and port users such as shipping lines, inland transport companies, freight forwarders, ship management companies & third-party logistics companies

SCC… • Port logistics is driven by SC leaders – typically manufacturers… who demand SC efficiency, more services, better productivity • Needs practical measures of SCC to assist practitioners to diagnose, benchmark, and improve implementation of SCC practices in Korea • SCC - two or more firms working and cooperating together to plan, manage and execute supply chain operations to improve performance and create value for end customers and stakeholders • SCC brings Collaborative Planning Forecasting and Replenishment (CPFR), Efficient Consumer Response (ECR), Vendor Managed Inventory (VMI) and Collaborative Transportation Management (CTM). • SCC cuts costs, raises revenues, operational flexibility and service performance to deal with high demand uncertainty

Maritime Logistics (ML)… • Maritime logistics applies principles of logistics & SCM to maritime transport • shipping, moving cargo and loading/unloading • traditional logistics functions (stripping/stuffing, storage and inventory management) • integrated logistics activities (distribution centre, quality control, assembly, and packaging) • ML organisations are a cluster of organisations in a port in which various logistics operators are concerned with a shared aim to convey greater value to shippers (Panayides and Song, 2009). • ML is an intermediate stage - offers cost and capacity advantages in physical flows of goods from origins to destinations,

SCC… • Replace traditional competition between firms into a collaborative attitude • Driven by competition & adoption of SCM philosophy • reciprocal benefits from satisfying shippers’ requirements, require inter-organisational collaboration • critical success factors depend on the ability to create synergies, converge interests between organisations and to guarantee reliability and high level of services and productivity • Most ports (85%) were interested in collaborating with port users (i. e. information sharing) to benefit both

Practical SCC includes • information sharing (IS), • knowledge creation (KC), • goal similarity (GS), • decision harmonisation (DH) • joint supply chain performance measurement (JPM) whereby ports and port users jointly work to ensure the provision of reliability, punctuality, value-added services, productivity and high supply chain performance.

Information sharing in practice • low cost - status of the container, availability of port facilities, port traffic statistics, berth occupancy, tug and pilot requirements, aids to navigation monitoring…. • Hanjin Newport Co. in Busan invested in integrated systems (i. e. port-MIS) to collaborate with users including CKYHE and freight forwarders as a customer-driven strategy to recognise exact container movements and facilitate vessel scheduling. • Shipping lines share information with ports to reduce vessel turn-around time & enhance hinterland accessibility… lower freight rates & reduced lead time for shippers. • effective hinterland accessibility needs high collaboration between ports & users collaborative planning of empty containers between ports, shipping lines and inland transport companies cuts empty movements. • Canadian ports share information to cut dwell times of loaded containers and transit times to Toronto and Chicago. SCC between ports, shipping lines, rails and shippers but how do we measure SCC?

Measures of Information sharing • provide any information that might help within our port supply chain • frequently exchange information within our port supply chain • have informed each other of changing needs in advance within our port supply chain • keep each other informed about events or changes that may affect our port supply chain • exchange accurate information within our port supply chain

Measures of knowledge sharing • search and acquire new and relevant knowledge within our port supply chain • assimilate and apply relevant knowledge within our port supply chain • identify customer needs for our port supply chain • discover new technology for our port supply chain • learn the intensions and capabilities of other port supply chains in competition

Goal similarity • pursue efficient multi-modal transport of container cargoes for our port supply chain • stress the importance of collaboration within our port supply chain • pursue the provision of value-added logistics services for our port supply chain • pursue cost reduction throughout our port supply chain • pursue reduced cycle times and enhanced inventory management for our port supply chain

Decision harmonisation • pursue efficient multi-modal transport of container cargoes for our port supply chain • stress the importance of collaboration within our port supply chain • pursue the provision of value-added logistics services for our port supply chain • pursue cost reduction throughout our port supply chain • pursue reduced cycle times and enhanced inventory management for our port supply chain

Joint supply chain performance measurement • develop systems to evaluate supply chain performance for our port supply chain • deal with security and risks that may occur for our port supply chain • develop systems to enable shippers to identify their cargoes’ location for our port supply chain • keep seamless transport flows even in a peak time for our port supply chain • solve the problems together (i. e. delay and accidents in transport) for our port supply chain

South Korea survey… • 4 th largest throughput - 20 M TEU in 2011 • 5 th largest fleet (DWT) - container shipping lines – Hanjin, Hyundai Merchant Marine; 2 nd largest shipbuilder • mailing lists - Korean Port Logistics Association, Korea Shipowners’ Association, Korea International Freight Forwarders Association, and Maritime and Logistics Information Directory in the Korean shipping gazette • Sampled terminal operators, shipping lines, inland transport companies, freight forwarders, ship management companies and third-party logistics providers • located in major container ports of Busan, Kwangyang and Incheon adjacent to major shipping routes / markets in the hinterland

Who responded? • half were terminal operators and shipping lines, whilst the other groups recorded about 11% each. • Approximately 59% held directors or higher positions. • Twenty-seven per cent were from organisations with over 300 employees. • tested the predictive validity of SCC on three outcomes, value-added service (VAS), efficient operations (EO) and reliability (RL) as components of port performance • EO - the extent to which container throughput is maximised in the employment of a given level of resources within an economic and institutional environment

Findings • ports and port users aiming to raise collaboration need a strategy which includes all five main dimensions • Work is diagnostic – low scores on particular items indicate a need to prioritise that item • S Korea seeks a maritime logistics hub around Busan, Kwangyang and Incheon to provide value-added services based on SCM contexts – SCC - to reduce excessive competition • Future work in Europe might relate to Short sea shipping and barge transport, and in North America to rail transport