Supply Chain management Assignment help on : Supply Chain and Logistics Issues of MPA
The Maritime and Port Authority of Singapore performs an integrated role of managing and regulating the marine facilities and services on the port of Singapore. It is responsible for providing guidelines and procedures related to the operations, traffic movement and logistics handling. The port authority is responsible for the overall development and growth. [1]
Port users submit relevant documents as per Standard Operating Procedure (SOP) to the Planning Department of the authority. This is generally followed by a meeting between the concerned authorities and the parties involved, before the operations are to begin. This is done to mitigate any navigational, operational or environmental challenges and risks that the project may possess.
Global Supply Chain & Logistics
The global SC market has grown at a CAGR of more than 10% in the last five to seven years. It integrated various individual activities of the value chain to offer the users or the customers complete end to end services. The flow of three most important entities in the supply chain, i.e. the goods, the information and the funds related to the operations, is integrated in a global supply chain system. [2]
The set of activities comprising the global value chain for the maritime industry, keeping the sea and air transport at its core, start from the supplier. This supplier identification or procurement, as it is known in modern times, forms the base on which the whole supply chain grows. Warehousing and land transportation form the next incremental stages. Loading of the cargo at the port terminal is the major step and involves a lot of handling and logistical challenges. [3]
Logistics Strategies Commonly Followed
In defining the logistics strategy, three common levels are followed. They include the strategic part, the tactical part and the operational part. [4]
The strategic level is concerned about the locational choices and the customers. It takes a long term view and dictates the policies that yield results for years and years to come. The tactical level is concerned about the planning and inventory management part. It takes a medium term view and is generally defined for a time frame of less than a year. The third level, the operational level is concerned with the day to day operations at a daily level. [5]
The decision levels play an important role in determining the procedures followed. The scheduling, stocking and transportation strategies are influenced by the decision levels. An integrated policy results in better management of the logistical challenges.
Inbound and Outbound Logistics
Inbound logistics comprises of mainly procurement and managing those resources. At a port like Singapore, inbound logistics form the major part of storage requirement. The major trade cargo at Singapore is transitional and is traded to the ultimate destination with a lag time of 2-3 days.
Outbound logistics on the other hand consists of storage and transportation of the finished products. They form a much smaller percentage of storage requirement and are relatively easier to manage.
The port authority at Singapore, MPA manages the inbound and outbound logistics by having the proper infrastructure, warehousing facilities and procedures in place. It helps the authority to manage the integrated processes better. [6]
Logistical Issues at Singapore
One of the major challenge or risk that any logistical handler or a port faces is that of storage and warehousing. With increase in the usage of third arty logistical providers, there is another problem of having a proper communication system. The flow of the three entities, goods, information and funds, also poses a lot of risks. Also, a growing port like Singapore with the goal of reducing transaction or lag time and the turnaround time, needs to continuously upgrade technology and process handling techniques to keep up with the desired goals. [7]
The biggest barrier in inter-company coordination is in information sharing and the issue of trust. Many research works have been done in information sharing which shows that companies which collaborate and share information reaped tremendous amounts of benefits.
Proper infrastructure facilities and having policies and guidelines for handling situations of risks and contingency issues go a long way in making a port ready for handling logistical challenges.[6]
Key Supply Chain Strategies to Reduce Cost, Increase Quality and Competitiveness for MPA
Cost Issues
The major components of logistics cost includes transportation, warehousing, inventory storage, order processing etc. Out of these, transportation contributes the maximum percentage.
The classification of costs can also be done on the basis of phase of flow. This classification can be in supply phase including inbound logistics and material storage, production phase including transportation and distribution phase including outbound logistics. [8]
The costs can be reduced by reducing lag time, having optimal inventory management techniques and having a lean and agile supply chain.
Lean and agile supply chain is aimed at reducing the unnecessary processes involved and focussing on the core functions. The implementation of Lean Principles can enable greater customer focus, flexibility and thus improved profitability. [9]
Quality Management
Quality management is one of the most important aspects of modern day supply chain management and has been universally accepted as the way forward in having leaner and more efficient supply chains.
The importance of quality management practices in the achievement of operational results and customer satisfaction in logistics has been asserted by a number of scholars in the logistics academic journals. [10]
The process begins with establishment of the quality goals that we want to achieve. This should be a transparent process and requires great amount of focus both in term of time and in terms of effort. The goals need to be realistic and should be attainable.
The next stage is devising a policy of working towards the established goals. The various sub-processes in this stage are to be integrated and should work incrementally.
The last and the continuously evolving stage involve updation of goals and processes. The metrics to measure the quality parameters should be specific yet be upgraded towards the general goal.
MPA in its Working Group Document in 2005 [2] highlighted the importance of these parameters and these stages and devised methods such that it is currently in a position to take advantage of the good quality supply chain infrastructural capabilities it has.
It can still improve upon these facilities and establish controls to continuously monitor and upgrade the system.
Inventory Control
Inventory management is influenced by the nature of demand, including whether demand is derived or independent. A derived demand arises from the production of another product.
At the port authority of Singapore, inventory management and warehousing control is critical in contributing to the reduction of turnaround time of the vessels coming and leaving at the port. The authority engages in numerous activities and inventory control mechanisms to ensure that it manages to reduce cost and improve the quality of various processes it engages in.
The structure of independent demand and logistical requirements vary by stage in the product life cycle (introduction, growth, maturity, and decline). During introduction, logistics must support the business plan for product launch, while preparing to handle potential rapid growth by quickly expanding distribution. [11]
As inventory levels are affected by a range of factors, some that can be controlled and some that can’t be, MPA must give more focus to optimize the factors it can control. In the recent years it has managed to reasonably optimize a lot of factors, Shanghai port in the last couple of years has given tough competition in terms of turnaround time and improving the storage and warehousing facilities.
Communication with Logistic Providers
With the increase in the services provided by third party logistics providers, communication at all levels plays a very important role in maintaining quality levels, improve operations and increase efficiency.
Companies in logistics sectors have to aim to establish themselves as an integrated solutions provider rather than just being a transporter, forwarder or storage godown owner. This is possible by extending their logistics and supply chain capabilities and understanding customer expectations.
Technology Upgradation
Technology plays a very important role in the current scenario to improve the efficiency of the supply chain and make it more responsive to sudden changes in patterns.
MPA has state of the art technological facilities with the terminals having latest cranes and process handling capacity. What it needs to improve upon is the proper utilization of that technology so that the processes supported can be optimized. [12]
The future of the logistics sector depends not only on the continued development of infrastructure but also on the capability of the service providers in adopting new technology, adapting themselves and making optimal utilization of technology. Logistics service providers need to use technology which is web-enabled and facilitates real-time consignment tracking, warehouse space management, inventory tracking and similar functionalities. [13]
GPS tracking and web enabled systems are the future of technology in logistics and MPA has dedicated groups working on improving the supply chain and make it more responsive.
These processes are the modern day techniques necessary for MPA to implement to improve its efficiency and reduce cost. Quality management can never be looked aside and the way MPA has invested in infrastructure building and performance management, it is on the right track.
What is needed in the future is more dedicated focus on managing the intricate process of communication with customers and logistics handling companies. It can certainly do with having separate teams for these purposes and monitoring the day to day processes to find ways of improving. Technology deployment and upgradation are other important aspects and it remains to be seen if the port authority at Singapore can keep up the same pace with which it has done this in the last five to seven years.
Sustainability in Cargo Handling and Reduction in Environmental Impact of Maritime Business
Cargo handling and logistical operations has evolved a lot in the last century. It has directly contributed a lot to the growth of many countries and is expected to increase at a similar pace in the future as well.
The significance of ocean transport and cargo handling cannot be ignored. Technological improvement, economies of scale and other important factors have meant that the cargo handling process and maritime business has reduced the transportation costs and has facilitated large volumes of trade between countries. [14]
But a downside of this has been the impact it has had on environment and the water bodies. In order to be environmentally sustainable in the future, the industry has a lot of work to do.
The expansion of trade has raised serious concerns environmentally, particularly with regards to gas emissions and waste disposal.
MPA has modern waste disposal facilities and continuously engages in employing modern facilities to dispose off waste in areas such that there is limited harm to the environment. It has developed safe working conditions in addition to superb disposal facilities. [15]
Green Supply Chain
The concept of green supply chain and integrating it with the daily operations can be applied to the Singapore port as well and in general, to any cargo handling facility. The facilities need to make sure that they engage in developing green technologies continuously and embed them into their processes so as to improve the flexibility of their systems and make them greener and more sustainable.
The linkage between sustainability management and conventional supply chain management (SCM) has gained an increasing amount of interest in the academic and business community to the extent that sustainable supply chain management (SSCM) is now seen as an established research field. [16]
The shift from conventional supply chain management to a more sustainable supply chain cannot be complete without an equally focussed contribution from all the stakeholders involved. These include the port authorities, logistics handlers, end customers and private players who integrate all these processes.
This shift can be described as a decisive move for current and future procurement and supply management activities because a company often faces a high level of complexity. The complexity arises from the need to manage a large number of suppliers and the growing demand and also ensure that the margin levels do not decline. [17]
The integration of environmentally sustainable practices and profitable processes involves walking on the thin thread of combining what is right and what must be done for future development. Conceptual frameworks need to be developed for the same and then implemented such that the essence remains throughout.
MPA through its various initiatives and innovative methods has to a certain extent been able to make its operations sustainable. It needs to build on this base and employ newer practices to make its operations more environment friendly, but at the same time improve efficiency and maintain profitability. [18]
Cross-functional Collaboration
Cross-functional collaboration contributes directly to the establishment of the framework required for developing sustainable and innovative techniques of maritime business. SSCM can be understood as a further development of the conventional SCM—extended by the integration of the three (environmental, social, and economic) dimensions.
The conventional supply chain of both demand driven and supply oriented processes need to be tweaked a bit when developing processes aimed at sustainable supply chain methods. It also includes managing the flow of information and goods such that least amount of waste is generated and is disposed off properly. [19]
Waste disposal is another very important aspect. MPA through its collaboration with various private players and agencies has made green disposal a reality. What needs to be done is integrating this waste disposal system with other processes and make it an enterprise wide system.
Suppliers and customers are external stakeholders. Due to the fact that in recent years the amount of stakeholder requirements has increased for corporate responsibility as well as for environmental-friendly and socially responsible products and services, the importance of the company internal knowledge transfer between functional units such as public relations (PR) or the sustainability also has risen. [20]
Knowledge-based View
There can be five characteristics and features of knowledge based view of sustainability. These are transferability, capacity for aggregation, appropriability, specialization and requirements. [21]
These five described characteristics of knowledge have to be taken into account when SSCM-relevant information and knowledge are exchanged between the different members of the supply chain.
Sustainable supply chains are developed, maintained and upgraded using all these features and it also helps in sharing of resources.
Perfectly green supply chain may be a dream today, but a more sustainable supply chain than the conventional one is definitely a reality. MPA has come a long way making its various processes sustainable. It needs to continue in its current foray and maybe in the times to come it will also be the greenest port and hinterland area in the world, along with being a very important port in world geography.
It needs to be seen whether the recent rise of Singapore as a port is sustainable and can become greener in future or not. But the efforts made by MPA will definitely go a long way in attaining this objective.
Summary
The global SC market has grown at a CAGR of more than 10% in the last five to seven years. It integrated various individual activities of the value chain to offer the users or the customers complete end to end services. The flow of three most important entities in the supply chain, i.e. the goods, the information and the funds related to the operations, is integrated in a global supply chain system.
The strategic level of logistical handling is concerned about the locational choices and the customers. It takes a long term view and dictates the policies that yield results for years and years to come. The tactical level is concerned about the planning and inventory management part. It takes a medium term view and is generally defined for a time frame of less than a year. The third level, the operational level is concerned with the day to day operations at a daily level.
The port authority at Singapore, MPA manages the inbound and outbound logistics by having the proper infrastructure, warehousing facilities and procedures in place. It helps the authority to manage the integrated processes better.
The biggest barrier in inter-company coordination is in information sharing and the issue of trust. Many research works have been done in information sharing which shows that companies which collaborate and share information reaped tremendous amounts of benefits.
Proper infrastructure facilities and having policies and guidelines for handling situations of risks and contingency issues go a long way in making a port ready for handling logistical challenges.
The costs can be reduced by reducing lag time, having optimal inventory management techniques and having a lean and agile supply chain.
Lean and agile supply chain is aimed at reducing the unnecessary processes involved and focussing on the core functions. The implementation of Lean Principles can enable greater customer focus, flexibility and thus improved profitability.
The importance of quality management practices in the achievement of operational results and customer satisfaction in logistics has been asserted by a number of scholars. MPA highlighted the importance of these parameters and these stages and devised methods such that it is currently in a position to take advantage of the good quality supply chain infrastructural capabilities it has.
It can still improve upon these facilities and establish controls to continuously monitor and upgrade the system.
MPA has modern waste disposal facilities and continuously engages in employing modern facilities to dispose off waste in areas such that there is limited harm to the environment. It has developed safe working conditions in addition to superb disposal facilities.
MPA through its various initiatives and innovative methods has to a certain extent been able to make its operations sustainable. It needs to build on this base and employ newer practices to make its operations more environment friendly, but at the same time improve efficiency and maintain profitability. It needs to be seen whether the recent rise of Singapore as a port is sustainable and can become greener in future or not. But the efforts made by MPA will definitely go a long way in attaining this objective.
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