2012-11-13 editing 3rd iberoamerican syposium of marine insurance dh
TRANSCRIPT
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OUTLINE
2
IntroductionThe Causes of Supply Chain Disruptions
The Vulnerabilities in Maritime Transport Chains
The Impacts of Supply Chain Disruptions
Chinese Shippers’ Perceptions for Maritime Related SCDs
Mitigation Strategies for Supply Chain Disruptions
China’s Logistics Industry
uantifying Supply Chain Disruptions Costs
Conclusions
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The Causes of Supply Chain Disruptions
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Supply chains !SCs" are comple# systems of net$or%s&lobal SCs could be further subdi'ided into three layers( o'ersight layer)
transaction layer and logistics layer !*illis and +rti,) -../"
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The Causes of Supply Chain Disruptions
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The Vulnerabilities in Maritime Transport Chains
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Sources of Maritime Transportation Related SCDs
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The Impacts of Supply Chain Disruptions
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The cost impact $ould be bet$een 0SD 12. million and 0SD 13..
million for each day a supply net$or% is disrupted4
Shareholder 'alue $ould decrease by 3.5-674 The a'erage abnormalstoc% returns of the firms sampled $as about 8/.7 o'er a time periodthat begins one year before and e#tends to t$o years after the
disruption announcement date49 port closure could cause a loss ranging from millions to trillions ofdollars for shippers) carriers) and consignees) and e'en damage anation’s economy4
Schedule unreliability in liner shipping operations affects se'eralactors $ithin the maritime transport chain(
The threat of piracy is multifaceted4
The conse:uences of terrorist attac%s on maritime transport chain
systems include human) economic) and intangible conse:uences5
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Chinese Shippers& 'er!eptions for %aritimeRelated SCDs
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Sur'ey Screen
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Chinese Shippers& 'er!eptions for %aritimeRelated SCDs
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Sample Description
Chinese Respondents Shen*hen Shanghai
Sample Si*e /; -2
Importers-;7 /67
+,porters<37 2-7
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Chinese Shippers& 'er!eptions for %aritimeRelated SCDs
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Chinese shippers’ contingency plans for maritime related SCDsDetail of !ontingen!y plans Sum !7"
-perational le#el
Change shipping schedule>route ?253/
Communication to all parties to reschedule deli'ery time -65?69lternati'e sourcing>substitute product 3<52<
Aegotiate price discount>rebate to customers>apply penalty to suppliers 6533
Strategi! le#el
Lengthen estimated lead time 35?2Increase safety stoc% 35?2
Di'ersify carriers>suppliers base 3.563
Build ris% management team 3?523
In'est on IT system impro'e trac%ing>de'elop ne$ product
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Mitigation Strategies for SCDs
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Getting it Right from the Start
•Proacti'e strategy !eg5 selecting safe locations) robust suppliers"
$uilding a Se!ure and .le,ible Company Culture
Collaboration
•Collaborati'e Transportation Management !CTM"
$uilding Redundan!ies
•9 short=term SCD and In'entory carrying>managing costs are lo$
oEolding safety stoc%
oStrategic stoc%•9 longer period of time SCD) and in'entory managing costs>theris%s of product obsolescence are high
oRedundant capacities
oFeeping a redundant IT system
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Mitigation Strategies for SCDs
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!Continuing"$uilding .le,ibilities
•Standardi,ation
•Postponement
•9 fle#ible supply base strategy
•Gle#ible transportation strategy
•Dynamic pricing>promotion>substitutable products strategies
!Dell successfully na'igated a SCD caused by the 3;;; Tai$an earth:ua%e by steering its
customers to buy particular products"
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China’s Logistics Industry
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China&s ogisti!s Industry atest De#elopment•9n a'erage annual gro$th rate of -?74
•In -.33) China’s e#ternal logistic cost totalled RMB65/ trillion)
accounting for 3<567 of the &DP4
•The structure of China logistics costs (
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China’s Logistics Industry
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China ogisti!s Infrastru!ture De#elopment
• Road transport
o9ccounting for <@527 of the total freight carried internally in -..;4
o
To$ns $ith high$ays account for ;;5-/7 of all to$ns) and ;-56@7of total 'illages country$ide ha'e access to high$ays5
• Rail transport
oRail freight only accounts for 335;7 of the total freight shipped4
oThe third largest rail net$or% in the $orld $ith ;;)...%m of trac%4
o9 proHect is under$ay to connect containeri,ed bo# shipments from
China to urope 'ia rail5
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China’s Logistics Industry
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!Continuing"• Inland waterway
o9ccounts for 33527 of the total freight in -..;4
oChina’s 33.)... %m of na'igable distances pro'ides the $orld’s
largest inland $ater$ay net$or%4
o Ae$ Jangt,e Ri'er Port utilisation ma%es it an economically and
en'ironmentally sound alternati'e to road haulage5
• Maritime
oBy the end of -..6) there $ere /3? ports in China) ?@ of $hich
ha'e an annual handling capacity of or abo'e3. million tons4
oThe port of Shanghai became the largest container port in the
$orld in terms of its throughput in -.3.5
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China’s Logistics Industry
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!Continuing"• Air freight
o9ccounts for only a small proportion of China’s freight
transport mi#4
oChina has 2.- airports of $hich 667 ha'e pa'ed run$ays5
•China’s forwarding, brokerage and warehousing services
oIncreasing $arehouse efficiencies and capacities in China are
strongly needed4
oLo$ efficiency of $arehousing operations is a maHor
$ea%ness in Chinese SC systems5
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China’s Logistics Industry
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China ogisti!s Industry Challenges•Lo$ efficiency and higher logistics costs4
•Lac% of national integrated transportation net$or%4
•Poor IT infrastructure and inability to use ad'ance technology4
•0nderde'eloped $arehousing ser'ice4
•Local protectionism4
•9 scarcity of :ualified logistics personnel4
•Inconsistency in policies and regulations4 and
•Gragmented domestic freight5
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China’s Logistics Industry
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Eigh$ays became par%ing lots in -.3- China’s national dayholidays
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China’s Logistics Industry
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R%$/01/ billion sales and more than 23 million pa!kages on //4//453/56 7single day8
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China’s Logistics Industry
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Re!ommendations for Colombian Importers•Choose robust suppliers4
•Choose robust ?PLs in China4
!better $ith lobbying and bargaining po$er $ith local go'ernment)eg5 G+KC+AA5 &uan#i is indispensable in China"
•9d'anced $arning strategies4
!lengthen lead=time) particularly) Labour day) Aational day) festi'als) etc5
+r bring for$ard to a'oid the Chinese festi'als"
•nhance information 'isibility4 and
•nhance collaboration $ith SC parties5
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uantifying Supply Chain Disruptions Costs
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Methodology
•The Latent Class Models !LCM"= a probabilistic modelling
•Seemingly 0nrelated Regression Models !S0R"
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uantifying Supply Chain Disruptions Costs
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.indings•The LCMs re'ealed that respondents’ latent preference heterogeneity
created t$o segments !lo$ and high" under normal operation and three
segments !lo$) medium) and high" $ith a disruption 5
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uantifying Supply Chain Disruptions Costs
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!Continuing"
•Shippers’ *TP are different under normal and disruption operations4•Shippers’ VTTS could increase more than / times if there is a disruption5
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uantifying Supply Chain Disruptions Costs
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!Continuing"
•The S0R model results re'eal that production) company>supply chaincharacteristics) and shipment specific characteristics ha'e significantinfluence on shippers’ preference for maritime ser'ice attributes $ith and$ithout a disruption5
oGor e#ample( geographical locations
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uantifying Supply Chain Disruptions Costs
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!Continuing"
oGor e#ample( geographical locations
iq i Shenzhen iq Sydney iq k k k U Shenzhen Sydney xα β β β = + + + ∑
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Conclusions
The findings !ould be helpful for industry stakeholders(•Shippers
•Ser'ice pro'iders
•Insurers
•&o'ernments and policy ma%ers