TRANSPORT COMMUNICATIONS: Understanding Global Networks enabling transport services

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1 TRANSPORT COMMUNICATIONS: Understanding Global Networks enabling transport services PROFESSOR CHRISTOPHER KISSLING LINCOLN UNIVERSITY, NEW ZEALAND ASEAN- AUSTRALIA NEW ZEALAND FREE TRADE AREA (AANZFTA) ECONOMIC COOPERATION WORK PROGRAMME (ECWP)

2 TRANSPORT COMMUNICATIONS Published by Kogan Page Ltd. London and Philadelphia U.K. 10 September 2007 USA. 1 November

3 Supply Chains (1) There are many competing supply chains. They are associated with the inputs needed for the production of food and manufacture of all manner of goods. They are associated with outputs of product whether as components or in final form. The outputs from one participant in the supply chain are the inputs to another. The waste from one process can be recycled as feedstock in another process. For every transition, energy is consumed.

4 Supply Chains (2) Supply and demand are linked not just by physical shipments but also by information flows that underpin those shipments. There has to be the means to transport goods. That capacity can only be applied to bring about trade if allowed and enabled by prevailing rules and regulations. A transport service provider is reliant on others to provide auxiliary services such as fuel supplies, law enforcement, security, and emergency response.

5 Supply Chains (3) Many skills are required by many people to make a supply chain function. At every node in the following diagram for supply chains, infrastructural investments will have been made, operational decisions and actions taken, and competitive situations analyzed.

6 Anatomy of a Supply Chain Site Urban National National Urban Site Global/Continental Export Activity Import Activity Transshipment Possibly through an Intermediate Export Processing Zone Upstream Procurement & Tracing Downstream Distribution & Tracking THE FRACTAL LEVELS OF A SUPPLY CHAIN

7 NETS There are six interacting networks that are essential prerequisites for the smooth functioning of global supply chains Infrastructure Traffic Regulations Auxiliary Services Communications Skills

8 The Six Networks Enabling Transport Services (NETS) They are Fractal Skills Auxiliary Services Infrastructure Communications Regulations Transport - Traffic They are Interconnected

9 Infrastructure Networks Fixed Facilities Infrastructure networks comprise the fixed facilities. Their condition is important. Lack of storage infrastructure can impede system performance just as much as lack of road space, or inadequate quayside berths at a seaport or poorly maintained container handling equipment that breaks down frequently.

10 Traffic Transport Networks Transport networks comprise the vehicles/ vessels/aircraft or floating nodes whose movements in relation to each other constitute the dynamic network we call traffic. Traffic may be sparse or congested and will vary according to time and place Traffic is a response to economic and social activity

11 Regulatory Networks Regulatory networks comprise the rules, regulations and schedules that specify how traffic should use an infrastructure and relate to other traffic. Operational restrictions like airport curfews are a hindrance. There are rules for driving on roads, flying aircraft, piloting vessels even for conducting sporting events.

12 Communications Networks (1) Communications networks inform transporters as to where opportunities are to be found, what regulations are in force, how they should interact with the infrastructure and what dangers or special conditions apply.

13 Communications Networks (2) No purposive system can function without communications systems that allow the flow of cybernetic and control information between and within its subsystems and with its environment.

14 Communications Networks (3) No purposive system can function without communications systems that allow the flow of cybernetic and control information between and within its subsystems and with its environment.

15 Auxiliary services networks These comprise the auxiliary services needed to ensure and maintain the efficient and correct use of the other basic networks (e.g. petrol stations, police, ambulance, lifeboat and meteorological services).

16 Skills networks These comprise the skills needed to operate vehicles safely in traffic, On infrastructure according to regulations and to understand and act on transport communications to ensure security. e For example, the skill to drive a forklift truck or fly an aircraft half way round the globe subject to air traffic control, or navigate a vessel in congested inland or coastal waters or on the high seas.

17 The Pivotal Role of Transport Communications (1) Good communication within the management of supply chains involves the integration of technology, carriers, shippers, receivers and third parties. There are language translation issues to be overcome. Internal business communications often need improvement.

18 The Pivotal Role of Transport Communications (2) Ways of communicating are evolving, bringing greater visibility and efficiencies into supply chains through, for instance, applications of: Track and Trace technology, Data warehousing, Automated warehouse management, Internet based electronic commerce, and Advanced Customs clearance procedures.

19 Information Phases in Transport Communications PreTransport Phase Evaluation of alternatives for procuring wanted items and consideration of the costs and competencies of alternative transport service providers using alternative combinations of transport modes over variable routes. Tradeoffs between speed, reliability, security and cost. Transported items that can gain in value at their destination, offsetting friction costs of supply and provide profit for the seller, may go ahead if alternative suppliers don t offer better value.

20 Information Phases in Transport Communications In Transit Phase Feedback from navigation systems Monitoring condition of cargo Track progress of vessel/vehicle/plane Pre-arrival Customs formalities On-board entertainment systems

21 Information Phases in Transport Communications Post Transit Phase Billing processes Data warehouses mined for performance evaluation and future planning purposes

22 Who is Boss? Information communications systems may be obligatory, or voluntary National authorities security & data Big players exert pressure on suppliers to conform - coercive influence

23 Other Factors Geography isolation - monopolies Ownership of facilities Growth of economies like China, India Miss-match of shipping space and balance of trade Role of Third Party Logistics (3PL)

24 The Supply Chain Matrix Find the best trajectory through the cube THE SUPPLY CHAIN MATRIX Global National Urban Site Room Surface Land Water Air Skills Auxiliary Services Communications Rules Traffic Infrastructure Looking for smooth trajectory and transition

25 What Lessons? The NETS framework allows supply chains serving any country or business to be examined forensically at every fractal level, from end to end, regardless of what combination of transport modes are engaged in the process. Each node and link can be evaluated to determine what factors are contributing to suboptimal solutions.

26 Skills Deployment of people with the right skills. The sector needs to be filled with people with skills from many disciplines. There is shortage in supply for some job specifications with firms and government looking internationally to recruit these key personnel in the face of stiff competition from other countries facing the same shortages.

27 Key Performance Indicators To make the NETS framework a valuable tool for analysis of supply chains, each entity in the supply chain should draw up what they regard as key performance indicators for each NET using parameters that can be measured relatively easily. This can be done at different fractal levels and repeated to obtain longitudinal views over specific time intervals such as five or ten yearly or more frequently if survival is critical.

28 Thank you ASEAN- AUSTRALIA NEW ZEALAND FREE TRADE AREA (AANZFTA) ECONOMIC COOPERATION WORK PROGRAMME (ECWP)

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