Is there a secret recipe to optimise Port and Terminal operations?
Port and terminal business is a fixed asset business using well defined resources to provide service to customers. Resources can be categorised as shown in the picture:
Staff drive and operate the equipment on the yard to transport, stack and handle the containers, general cargo, dry bulk or any other commodity. The yard is a scarce and crucial asset in this equation, since the yard capacity, together with the dwell time determines the annual throughput of the facility.
For any of the resources mentioned, it is obvious that these are limited, once implemented. Resources need to be available in sufficient “quantity” to handle the workload at any given point, also during peak moments. At the same time, resource numbers should be balanced to prevent costs from being too high during calmer periods.
The calculation of the required resources is a very important topic during the feasibility study, the master planning and the actual design of a terminal or logistics facility.
Looking at the lifecycle of a port, terminal or logistics facility, there are clear phases to be distinguished: a feasibility study, the actual design, construction and implementation, the operational phase, and finally the optimisation. During an optimisation study, it may be evaluated if the design needs to be adapted, resulting again in a feasibility study… and thus the cycle continues. Master planning is an element of the design. After a feasibility study, various master plans are assessed on a number of parameters.
Master planning and detailed design fixes the constraints
Master planning is much more than developing a functional diagram of a facility. Master planning looks at the C’s of port and terminal design. Marketing has it’s P’s (Price, Product, Place and Promotion). In our opinion, Ports and Terminals design is characterised by the C’s: Cargo, Connections, Climate, Concept, Community, Communication and of course Cash!
We will get into more details on the C’s in a next edition of the newsletter. When designing a facility, developing a master plan and a resulting detailed design, the concept (one of the C’s) and thus the Constraints (yes, again a C) are being fixed!
Once the constraints are fixed, it is very difficult to change, modify or adapt these constraints.
Constraints often mean civil works, concrete, steel, equipment etc.
Correcting design errors is expensive
Whenever civil works are involved, whenever equipment is involved, you immediately know that a significant amount of money will be involved to adapt, correct or improve a design. As long as nothing has been built, it is still relatively easy to make modifications and corrections. When we talk about an operating facility, it will be much more difficult!
For every detailed design, an operational expert should check it to detect mistakes, omissions or potential bottle necks at an early stage. Think about the import and export process, the civil needs to implement technology etc.
What is preventing Ports and Terminals from optimising operations?
We launched a survey to get the opinion of industry experts to identify the bottle necks and issues when optimising Port and terminal operations.
The main reason identified by the respondents, show that the skills of the staff, both blue and white collar, prevents terminals and ports from optimising operations and delivering service to their customers.
People are key.
People are a key asset for any port or terminal. No matter what kind of equipment, technology or systems are implemented, people are key to make systems work and deliver according to customer expectations.
A good ending requires a good beginning!
The second element identified is the fact that technology does not deliver as expected. There may be a number of reasons for this. From our own experience, we found, that in the majority of cases, this is due to poor definition of objectives and expectations. In the majority of cases, hick-ups in technology projects are due to either a poor scope definition, scope drift or communication issues. A good, solid and fixed scope definition is the prerequisite for a successful technology implementation project.
When selecting technologies, the starting point should always be the process and not the technology itself.
Processes determine what technology is needed, not the other way around. Implementing technology to optimise a subprocess may in fact lead to bottle necks in the next steps of the process. The processes on terminals are sequential. A holistic approach is needed when optimising processes and selecting technology to manage processes.
Physical constraints prevent terminals from delivering optimal service to their customers.
Hard constraints put hard limits on operational processes. This may sound quite trivial, but it is actually often overlooked. The expert opinion of an operational expert can prevent bottle necks from being built.
Accurate and available information is the basis for any logistic process: customer and suppliers are co-producers of services
Ports and terminals produce services based on information. It is crucial that information is AA, Available and Accurate. Without information, terminals cannot plan, cannot schedule. Imagine an export container arriving at the gate. Without knowing on which vessel the container will leave the terminal will generate with almost 100% probability a shifting – and thus unproductive (not paid for) move – at the time of loading the container. Without information, efficient planning is just not possible. Receiving information on time requires that the business partner provides the information. It also means that the terminal or the port should have systems and processes installed to receive this information, register is and use it!
Information exchange means as well that the terminal provides real-time information and reports to the business partners.
Business partners produce a service together!
Making the right choice, at the right price
Budget limitations limit in 11% of the cases the optimisation of processes and procedures. There is a relationship with the argument that technology not always delivers up to expectations. A first step in optimising processes is evaluating and tuning the process itself. A next step is the selection, purchasing and implementation of supporting technology.
What can you expect from PORTSandTERMINALS?
Together wit our team of operational experts, you get from us:
- Expert guidance and advice when developing new facilities or optimising existing terminals
- Operational review of master plans, functional diagrams, detailed designs to eliminate bottle necks and constraints
- Optimisation of operational procedures
- Active assistance; guidance and advice when selecting and implementing technology to manage operations
- Active, on-site training for blue collar staff
- Dedicated training for terminal and port management
- RBS Terminal Operating Systems to efficiently and effectively manage your container operations
The best service for your customers is our objective! Excited to learn about the newest developments to optimise port and terminal operations, technology and training for port and terminal staff? Contact us today to discover how you can benefit from our knowledge and expertise.