carrier performance management and reliability advisory services … · 2021. 2. 22. · carrier...

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

E [email protected]

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


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


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


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


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


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


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.”


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


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

15-17 Christopher Street

London

EC2A 2BS

United Kingdom

T +44 20 7538 0191

INDIA

4th Floor, Tower C

Urban Square

Sector 62, Gurugram

122 098 India

T +91 124 497 4979

SINGAPORE

#13-02 Tower Fifteen

15 Hoe Chiang Road

Singapore 089316

T +65 6220 9890

CHINA

Unit D01, Level 10,

Shinmay Union Square

Tower 2, 506 Shangcheng Road

Pudong, Shanghai 200120

T +86 21 5081 0508

www.drewry.co.uk

[email protected]

For more information on our range of fuel advisory and carrier

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carrier performance management and reliability advisory services … · 2021. 2. 22. · carrier...

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