Peel your oranges before you eat

Ship spares procurement by segmented supply chain(Video)

Ship spares procurement by segmented supply chain

Cheapest traffic means

Plays important role in international trade.

Possesses high load carrying capacity.

Requires cheap motor powers than for airplanes.

Does not require any special infrastructure like roads, and airports.

Ship spares procurement by segmented supply chain

Availability of excess capacity and slow growth in international trade is dragging the industry, and putting downward pressure on the charter rates.

Reduced cash flow ,and issues of dept servicing on loans taken for assets in the 08-09 when assets prices were high will continue to hurt the industry

Dry Bulker market will be badly hit on account of new builds joining the fleet, and bunker prices are likely to stay firm

Container and tanker segment will some resilience ,however it is unlikely to hold its turf through the year.

Bottom line will be under severe pressure ,and some segments may also report net loss

Ship spares procurement by segmented supply chain

% Rate of discharge of cargo from the vessel at the port

% Non stop destinations operated

% on time delivery

Fuel Consumption /hour

Incident free Voyage

Sustainability

Y:Process Output X:Drivers which lead to the outcome

S.No Y (X)

1 Rate of discharge of cargo from the vessel at the port

Condition of cranes,portcongestion

2 Non stop destinations operated

Condition on Main Engines, Auxiliary Engines, Propulsion Systems

3 %on time delivery, incident free voyage

Do

4 Fuel Consumption /hour

Do

Three of the four KPI of sea transportation business depends upon the maintenance of the vesselShip

maintenance is the life line of this industry

Ship spares procurement by segmented supply chainPEEL YOUR ORNAGE EFFECT

MONTHLY REVIEW WITH SHIPS CRITICAL(CLOUD BASED MONITRING)

ENGAGE 1 OR 2 SUPPLIERS GO FOR ANNUAL CONTRACTS

VENDOR MANAGED INVENTORY

Rapid Response Inventory

management module

Low HighOperational Impact

High

Lead

Time

“Treat them all the same by treating them differently.” This quote comes from The 7 Habits of Highly Effective People by Stephen Covey.

Ship spares procurement by segmented supply chain

BEFORE AFTER

NON STRATEGIC SPARES WERE PROCURED ON SPOT BUY BASIS

THESE ITEMS WERE PUT ON ANNUAL CONTRACT

LOW IMPACT LONG LEAD ITEMS WERE IGNORED

THESE WERE NOW REVIEWED ON MONTLY BASIS

HIGH IMPACT LOW LEAD TIME ITEMS WERE ALWAYS ON HOT LIST(80% OF THE TIME)

VENDOR MANAGED INVENTORY INSURED 100% COMPLIANCE

ASSET OPERATIONAL DEFICIENCIES DUE TO SHORTAGE OF HIGH IMPACT ,HIGH LEAD TIME ITEMS

AFTER INTRODUCING RAPID RESPONSE INVENTORY MANAGEMENT MODEL ,ASSET UPTIME CAME CLOSE TO 99% AGAINST 75% IN THE PREVIOUS SET UP

Information silo’s in the older system: Poor visibility in the supply chain

Ship StaffTech Dep't: Ch Engineers

Supply Chain & Procurement Dep’t

Ship safety dep’t

Shows distorted flow of information;use of excel sheets or verbal requests

Information Flow in the Rapid Response inventory management modelspares procurement by segmented supply chain

Ship StaffTech Dep't: Ch Engineers

Supply Chain & Procurement Dep’t

Ship safety dep’t

Shows designed flow of information

Supply Chain Technologies used in RRIMD

Close loop flow of information for enhanced supply chain visibility

SAP MM

VIMS

CLOUD

CONCEPT:VIRTUAL STORE

SO HOW WAS IT ALL CONFIGURED ?

Close loop flow of information for enhanced supply chain visibility

MARINE ENGINEERS

SHIP(CUSTOMER)

SUPPLY CHAIN AND

PROCUREMENT DEPTT

SUPPLIERS ON ANNUAL CONTRACTS

SUPPLIERS ON VMI ERP

VIMSCloud

MONTHLY REVIEW

RRIMD

Virtual stores

BUSINESS RESULTS

Close loop flow of information for enhanced supply chain visibility

The procurement process became visible

After putting low impact items on contract the daily transaction s reduced by

50%

Putting high impact short lead items(lubricants) on vmi ensured complete visibility

in the supply chain

Material planning and on time deliveries, came up to 95% from earlier score of

70%

Avoiding spot buying helped us get better prices due to economies of scale

Suppliers were connected to cloud ,so that they were able track their payments

and also ensure on-time deliveries

BUSINESS RESULTS

Close loop flow of information for enhanced supply chain visibility

ERP, cloud and VIMS were completely integrated through web interface

The no of RFQ/RFI came down by 60%

VMI ensured a buffer and delayed supplies were completely eliminated

VMI helped suppliers plan their raw material procurement

Office got visibility of inventory on board ,eliminating sourcing of duplicate spares

IT PUT SIMLES ON THE FACE OF THE CUSTOMERS

Ship spares procurement by segmented supply chain

BEFORE AFTER

S0 Peel your oranges before you eat

This case study has been prepared from an live supply chain transformation project

Romesh Gupta CSCPFor comments you may write to me on romeshguptaCSCP@gmail.com