Robust supply chain with ports and terminals
These days almost everybody seems to work from home practicing social distancing and #stayathome. Supporting this approach and call everybody to do the best to control the spread of Corona, is what we all need to do these days.
Working e.g. from home makes you think about many different things such as: “How does this impact my business?” or “How does this impact the business of my clients?”. In the first days and weeks with the pace things are evolving, it might not be the right point in time to take long-term decisions. Sure, mitigating the first impact on business is the first priority for management now. But what (comes) will be afterwards? Will our business be the same and will it just recover after some month and move on? Isn’t the crisis also a good point to rethink business strategies from a new angle? Especially in logistics and port business completely driven by the global economy moving physical goods, we might need to go for a new way of thinking. On the one hand the supply chain takes a critical role in such a crisis delivering goods where they are needed most – from medical products to toilet paper. On the other hand, we experience the global just-in-time supply chain, as being more vulnerable than probably anticipated. Perhaps even in the case that Corona would not have been spread outside China to becoming a global pandemic. A more local scenario like this would still have hit many industry sectors across the rest of the world, “just” because one piece in the puzzle is not inline or in sequence anymore.
This looks like a single point of failure in our supply chain.
Being in IT and having colleagues designing high performance, high security data centres this is something you would need to avoid. E.g. you always would go for multiple power sources and at least two different ways from each power source to at least two pieces consuming the power. This is what you would call high level of redundancy. Now taking this picture and putting it into perspective with supply chains. The new approach would need to have at least two sources of supply for each part in the product coming from outside suppliers. In this respect it is not only about sourcing part e.g. in China, but also at least at one other area / country of the world. Having such a network seems like a good idea for the future, but the cargo still needs to come to the factory and thereby mostly needs to be discharged at one port – or at least two different ports thinking the new approach. Around this there has been a big discussion in Europe before the crisis hit. E.g. on base products for medicine that only came from one area of the world and would have had the potential to bring the production to a stop in Europe even without actually having a crisis here.
Thinking about strengthening your supply chain and making it more robust is probably a combination of local sourcing and multi-global sourcing. In this case we might see a wider spread of the sources in a supply chain for important goods to the manufacturing businesses, in order to prevent a single point of failure.
That is the bigger picture, now looking into our industry. Then ports are still mostly run manually, little digitised and with a high need of physical presence. So probably automation of the handling is the first part to move forward. But this cannot be the sole answer: it needs to be multi-place independent automation! Thinking about this scenario a step further would mean, you have automated equipment that are your arms and legs on the terminal. In case of a problem you can do trouble shooting remotely either from an office building at the terminal or from a “home office” location of your drivers. But also, more clever automated trouble shooting needs to be in place to keep a steady flow without human intervention. Next step is to automate your eyes and ears on the terminal. Subsequently, implementing sensors, cameras and OCR to gather the information needed without manually reading and typing them on-site, is another part of the solution. Collecting more information and gathering data from all places in the process by camera or the equipment itself (always know what your arms and legs are doing and how good they work). There are probably different possibilities enabling a terminal to do so. Now connect your “arms and legs” with the information from your eyes and ears and make the right decision on it. On a terminal, this usually means having a smart TOS system allowing you to inject the information and have – probably AI supported – automated decisions to be executed by the “arms and legs”. So also go forward to make automated decision taking to a level that is not yet here. If now this central system is also available from anywhere without problems, this would enable you to have your planning and dispatching staff anywhere – maybe even at home during a lockdown.
Last but not least this setup would not only need a very robust (setup) configuration to trust in it, but also a high grade of visibility of all the automated working to create transparency for the terminal staff from execution level to management. So, feeding all this into a platform collecting all necessary data and preparing it for a human eye to digest it, would be a key-element. This enables terminal staff to be remote but still feel the operation by immersing into the real terminal by means of the digital representation – maybe by VR or AR. It should be a combination of giving control and creating transparency on the automated flow by visualisation.
Staying within the picture of arms and legs but also in the no-single-point of failure picture, such a setup in terminals would enable all parties to eliminate one more possible interruption in the chain. For terminals this could mean to supply more robust services to customers being one important piece in the puzzle. Hopefully this will help e.g. the manufacturing industry to build a strengthened supply chain towards their plants from local and global sources.
By Norbert Klettner, managing director akquinet port consulting