carrier performance management and reliability advisory services … · 2021. 2. 22. · carrier...
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W drewry.co.uk/supply-chain-advisors
Carrier performance management and
reliability advisory services
(for shippers/BCOs)
Select the right vendors and ensure they
are delivering value for your organisation
2 [email protected] – Drewry Supply Chain Advisors –
Carrier performance and reliability management
A new suite of advisory services, built on best-in-class ocean shipment data analytics, that helps
shippers/BCOs improve their supply chain outcomes in terms of:
1. Allocation Decisions 2. Vendor Management 3. Logistics Planning
• Reveal the importance carriers
attribute to deploying reliable and
punctual loops
• Quantify the cost of delays and
include it in your allocation
decisions Use that reliability
performance to
• Optimise your position on the Cost
against Service trade-off using
factual performance metrics
instead of subjective opinions
• Measure the performance of your
Carrier and NVO vendors. Be
certain you are getting what you
paid for
• Improve the service delivery from
your Carrier and NVO vendors by
implementing a robust Quarterly
Business Review (QBR) and Key
Performance Indicators (KPI)
policy
• Increase the accuracy of your
inventory levels and/or customer
promises by using realistic and up-
to-date Drewry Lead Times that
can be scoped to your needs
• Awareness - Receive alerts when
Drewry Lead Times are
jeopardised by unforeseen events
or market conditions
Maximise the value from your maritime supply chains
OCEAN SHIPMENT DATA
3 [email protected] – Drewry Supply Chain Advisors –
Allocation Decisions
• Using blank sailings and vessel tracking data, Drewry independently assesses the reliability of the
different vendors and loops that are available for your shipping routes
• The calculations can be tailored to your needs in terms of :
‒ Base line for compliance: using pro-forma schedules, operational schedules or tendered transit times
‒ Departure and arrival points (e.g. port-to-port, gate in-to-gate out)
‒ Required reliability levels (e.g. 90%, 95%, 98% reliability)
• Using these bespoke “Drewry shipment lead times”, we can benchmark the reliability performance
of the different vendors and service options and rank them to easily identify the most reliable
routing options
• We can translate unreliability into cost, enabling you to optimise your position on the ‘Cost against
Service’ trade-off and allocate your shipment volumes based on the true cost to your organisation
rather than the tendered out-of-pocket cost.
• Drewry can then monitor the “true cost” of your ocean shipments throughout your contract period
to continually assess whether you continue to receive competitive service levels, and alert you of
cost savings opportunities that can be achieved by reconsidering your volume allocations towards
different vendors with a lower true cost.
Boost the value of your maritime supply chain by minimising shipment delays by including the cost
of non-conformance in your vendor selection and volume allocation decisions
1
Maximise the value contributed by your maritime supply chain
4 [email protected] – Drewry Supply Chain Advisors –
Allocation Decisions – support from Drewry1
Are the differences in reliability between
different providers and routes relevant?
Am I using the most reliable providers
wherever possible?
Am I receiving a competitive service
level?
Q… A…Yes. Vessel delays may account for more than 70%
of your total shipment delays, and the worse
providers on a route may incur average delays of
more than 7 days longer than the best performers.
Drewry can rank all providers by port pair, so you
can easily allocate your volumes to the most
reliable vendors, or benchmark the performance of
your providers against the wider market.
Drewry can calculate bespoke shipment lead times to
match the needs of your organisation, and include
the cost of unreliability into your allocation decisions.
We monitor the performance of your ocean providers
shipments during the contract period to assess
whether you continue to receive competitive service
levels, and alert you to cost savings opportunities.
Maximise the value contributed by your maritime supply chain
5 [email protected] – Drewry Supply Chain Advisors –
Vendor Performance Management: QBR & KPI Programme
• We provide a framework for measuring the performance of your Service Provider:
– Measure the right things, that impact your business / bottom line (pick from around 25 KPIs)– Across all supply chain elements (booking / shipping / invoicing / etc.)
– Guidance on which targets to set
– Guidance on where to get the data
– Share Best Practice processes
• Guidance on how to run your QBR
– Agenda topics
– Standardised LSP Management
– Best Practice processes
• Improve your LSP relationship by regular measuring and connection
– Receive better service / reduce costs
– Improve / resolve bottle necks in operations, reducing cost
– Smoother operation
– Longer term relationship / partnership
– Future Ready
Measure and review your Logistics Provider performance: Ensure you are getting the service you
are paying for and that the basis of your allocation is sound
2
Ensure you ‘get what you pay for’ and have clarity across your supply chain
6 [email protected] – Drewry Supply Chain Advisors –
Vendor Performance Management - support from Drewry2
Which key measures and KPIs should we
use and how should we use them?
What targets should we set?
How best to collect the data?
Q… A…Drewry can recommend standard KPI’s and
Measures to use, as well as those that are relative
specifically to your Business, Operations &
Strategy. Advise on how to use these to effectively
manage your service providers
Drewry advises the level of targets to set, based on
common market practice and customized to our
business to improve service and minimize spend
Best approach to internal stakeholders and with
your vendors to ensure timely and accurate data
provision supporting your Measures & KPIs
Ensure you ‘get what you pay for’ and have clarity across your supply chain
7 [email protected] – Drewry Supply Chain Advisors –
Logistics Planning
• Using actual vessel and terminal tracking data (incl. Blank Sailings), Drewry independently
calculates accurate and up-to-date “Drewry average shipment lead times” to improve the accuracy
of your supply chain planning activities
• These lead time calculations can be tailored to fit your requirements:
– Departure and arrival points (e.g. port-to-port, gate in-to-gate out)
– Required reliability levels (e.g. 90%, 95%, 98%)
– Granularity: by loop, vendor or alliance
• Drewry monitors the evolution of the lead time lead time components on a monthly basis, and
alerts you of increased risk of service level disruption when it occurs.
Improve the robustness of your maritime logistics planning using accurate and up-to-date
performance metrics of the ocean liner networks instead of ‘promised’ transit times and suggested
ETA’s, to optimise your supply fulfilment planning and make more reliable customer promises
3
Using actual tracking data instead of ‘promised’ transit times & suggested ETAs
8 [email protected] – Drewry Supply Chain Advisors –
Logistics Planning - support from Drewry3
Am I using reliable and up-to-date lead
times to plan my shipments and make
customer promises?
What are the patterns in liner network
reliability? What is normal seasonality and
how do different vendors perform?
What are the effects of different liner
network disruptions on my ability to meet
my customers’ expectations?
Q… A…
Using actual tracking data instead of ‘promised’ transit times and ‘suggested’ ETAs
Using actual vessel tracking data to establish real
port-to-port transit times
Using actual terminal tracking data to calculate
Gate In-to-Gate Out lead times
Visualising the monthly evolution of blank sailings
and vessel delay metrics
Benchmarking of the differences by loops and
providers
Blank Sailing trigger alerts up to 12 weeks in
advance, accompanied by bespoke impact
calculations on lead times and safety stock levels
“Drewry’s thorough analysis and
practical recommendations enabled
us to adjust our internal organisation
to the ‘new normal’ in liner shipping.
Our international supply chain has
become more resilient and we have
improved the accuracy of our
customer promises in a context of
reducing liner shipping network
performance.”
10 [email protected] – Drewry Supply Chain Advisors –
Case study: Assisting with identifying Carrier KPI’s and target setting
Client situation
Following a deterioration in the performance of Transpacific ocean liner
networks, a large USA exporter found itself struggling to meet commercial
commitments to its customers in Asia.
Objectives and Expectations
• The client contacted Drewry for advice regarding which KPIs and target
values to set their shipping line providers as part of the RFP process that
would enable them to retain their reputation for reliable and timely supply.
• The KPI rationale and independently assessed metrics needed to be
presented to and agreed by key internal stakeholders and form the basis
for a more resilient supply chain network serving key growth markets.
Drewry Approach
• Drewry developed a ‘Shipping Line Reliability’ framework with four
components. For each component, the formal report detailed the main
drivers and quantified their benchmark values, recent market trends and/or
best practices using our proprietary databases as well as vessel and
terminal tracking data, industry surveys and primary research with key
market players
• Drewry then calculated realistic lead times, by loop and portpair, for
different levels of confidence and showing the impact of each reliability
component in the overall shipment delays.
• These quantitative analyses enabled Drewry to prioritise its
recommendations which were delivered to the customer in a 7-step plan to
• improve the customer’s relationships with its vendors including
the implementation of a KPI program with 5 KPI’s.
Results Achieved
• Drewry recommended a set of 5 KPI’s along with their precise
definitions, measurement methods and target values. As part
of the solution, Drewry also provided best practice advice and
actionable insights which assisted the client with their
implementation.
• With the insight and technical evaluation provided, the
customer’s logistics team had the independent validation
required to recalibrate expectations with internal leadership
teams as well as customers and shipping lines. Several
metrics, including safety stock levels, were re-adjusted to cater
for the ‘new normal’ in liner shipping.
Testimonial
• “Drewry’s thorough analysis and practical recommendations enabled us to adjust our internal organisation to the ‘new normal’ in liner
shipping. Our international supply chain has become more resilient and we have improved the accuracy of our customer promises in a
context of reducing liner shipping network performance”
• Senior Director Global Logistics – Multinational US exporter
11 [email protected] – Drewry Supply Chain Advisors –
Case study: Standardised KPI / QBR program implementation
Client situation
Global Food Manufacturer operating in most countries in the world.
Producing, procuring and selling food products to the Global Market.
Localised, mostly ‘stand alone’ business units.
Objectives and Expectations
• To create a central contract management business unit, and standardise
the logistics contracts and logistic service provider management (LSP) in
Northern Europe, across initially 8 LPS.
• To integrate the logistics aspects of several acquisitions
Drewry Approach
• Interviewed the local logistics staff and determined current way of working
with the LSP
• General Management (mostly day to day, issues exception management,
fire fighting
• Clear and concise Pricing Structure removing ambiguity and double
charging / non-agreed charges
• Introduced standard Contracts (those in place mostly referring to the rates)
• Discover pain points among local logistics staff
• Created a number of KPIs that would enable Manufacturer to:
‒ Measure the current performance of their LSPs
‒ Set realistic stretch targets
‒ Implement standard contract language regarding LSP service expectations
• Implemented and standardized:
‒ Regular Review Meetings
‒ Regular interaction at senior level
‒ Clarity on expectations
‒ Objective service measuring
• Identify and create focus on target improvement areas
Results Achieved
• Improved relationships (at day-to-day operational level and
senior management level)
• More influence with the LSP due to regular interaction with
senior management
• Improvement in service levels to the manufacturer, which in-
turn resulted in improved service levels to their end customers
• Cost saving initiatives identified and implemented, directly
affecting the bottom line of the manufacturer
• Longer term initiatives discussed and implemented
• Clearer pricing structure and rate review guidelines
• Paved the way to more easily integrate the logistics aspects of
acquisitions / merging with other companies
• Created pro-active, positive culture
• Both sides clear on what is expected and needed so that the
other party could fulfil their obligations in the best way
• Easier day-to-day running of the business, creating a happier
and more productive workforce
5
900+
15,000
100+
14m teu
$27bn
We work with 5 of the top 10 global retailers*, who trust us to
support their procurement and cost benchmarking needs
Global ports coverage
Global port pairs
Multinational retailer and manufacturer members of our
exclusive ocean freight cost Benchmarking Club
Benchmarking Club comparing costs on over 14m teu of
freight (Dec ‘20)
Benchmarking Club comparing costs on over
US$27bn of freight spend (Dec ‘20)
* National Retail Federation 2020
Fact-based solutions to optimise
ocean freight procurement
UK
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