MIT’s Supply Chain blog presented a nice research study by Minhaaj Khan and Srideepti Kidambi and supervised by Dr. Tugba Efendigil. Their study is a good example of using less data rather than more to design a simple readily explainable approach that increases profits while reducing errors in ordering. It’s an easy win. Will it work in all scenarios? No, probably not. But it also doesn’t take long to try and implement. Occam’s Razor in action. It’s interesting they did not even need to know about promotions to achieve their gains. In many businesses the promotions can wreck plans. But in this consumer product it turns out they don’t disrupt.
Big data can sometimes confuse us rather than enlighten.
via Driving Risk Out of S&OP Forecasts
Sam Whelan penned a report on the alliance of four companies managing terminals at the Kwai Tsing terminals in Hong Kong.
Apparently shippers are furious. They believe there will be collusion and rates will rise as a result. Rates are already higher in Hong Kong than the mainland, and the Hong Kong fees add more cost.
The firms say it’s only to make the port more efficient and gain higher throughput. Volume handled has been declining in 2018 compared to the prior year.
It’s true that greater cooperation would most likely improve port throughput. Coordinating yard movements and berth use would offer possibilities for gains. I’m not sure it would have to be at the level of fixing prices. Improving port and yard bottlenecks is an important activity for firms in port management today.
But you can bet shippers will be on their guard for any collusion on pricing, especially when there’s a falling need for services. And since it’s China that is involved– these are Chinese firms– we can’t rule out geopolitical considerations that would be collusive. WE need to watch this one and see how the volumes and prices play out, just like the shippers will.
via Shipper hackles rise as Hong Kong box terminals announce operating alliance – The Loadstar
January 10, 2019 in Logistics, Ports, Production Operations, Shipping, Strategy, Supply Chains
Tagged alliances, China, performance, port management, ports, Shipping, supply chains, transportation
Ben Meyer in American Shipper has summarized a McKinsey report on port automation and port modernization. One interesting point in the discussion is that port operators are actually not seeing productivity gains in automated ports. Throughputs are actually slower. They have some explanations for this, but it is a real problem.
It struck me that automation is often seen as going hand in hand with better visibility of cargoes in the port and readiness for delivery. to the extent that the software requires automation, there may be a correlation here that does not bode well in the medium term.
In the long term it may well turn out better, but meanwhile, the customer may suffer.
via Cost, operational challenges hinder port automation
December 13, 2018 in Logistics, Ports, Production Operations, Shipping, Strategy, Supply Chains
Tagged automation, infrastructure, performance, ports, productivity, technology