melbourne sydney brisbane wellington johannesburg cape town windhoek australia’s supply chains –...

Melbourne Sydney Brisbane Wellington Johannesburg Cape Town Windhoek

Australia’s Supply Chains– Innovate or Fail!18 June 2008

Liesbet SpanjaardDirector, SAHA International Limited

8th BITRE Transport Colloquium

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Innovate or fail!

• Background and policy environment• Key characteristics of the transport & logistics industry• Challenges for industry• Innovation drivers• Barriers to innovation• Opportunities to innovate

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Why is innovation important?

• Innovation is a key driver of economic growth• Innovation is important for sustaining growth at a time

of:– increasing costs– increased demand for resources– infrastructure constraints, and– pressures to reduce carbon footprints

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The policy environment

• The Dept. of Innovation, Industry, Science & Research established 2007, ordered review of Australia’s innovation system

• In 2005, the Smart State strategy launched in Queensland outlining an investments in several areas including innovation

• In 2006, NSW Premier launched innovation statement to:– Develop an innovation strategy to support economic growth in NSW– Focus on industries with strategic importance with the greatest potential

for innovation• In 2007, Victoria released a proposal for a National Innovation

Agenda to develop coordinated approach to policy

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Transport and logistics – the invisible driver

• Freight and logistics represents around 12% of NSW’s GDP

• The industry employs more than 500,000 people in NSW

• It connects and supports every community across the country

• It touches every product before (and after) it is consumed

• The sector has a direct impact on the cost of living

Top 10 Industries by GDP

14.50%

10.30% 9.90%

6.00% 5.60% 5.20% 5.10% 4.70%4.10% 3.80%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

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Transport and logistics – the invisible driverHowever, the industry is:• Highly fragmented• Diverse and incorporates many varied activities • Highly competitive• Structured around markets and corridors not political boundaries • About supply chains not modes• Reliant on a relatively small number of major infrastructure gateways• Typified by low level of publicly available data

Therefore:• Large sections of the industry do not invest in innovation• The cost of regulatory burden is especially important• Planning for freight is difficult

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Supply chains are complex….

The movement of imported components at Electrolux

The complex nature of the Electrolux supply chain is typical of many,

and illustrates the need for

collaboration and information sharing

to maximise efficiency

Cost

Tra

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hys

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ove

ment

Ma

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Freight Forwarder (Linfox)Maersk Logistics

Shipper:40 shipping Line and consortia

Stevedore:Patrick TerminalsDP World

Customer Clearanceand AQIS container

inspection

Port Botany

Blayney Intermodal Terminal

DriverDocumentation


Electrolux orders refrigerator and

freezer componentry from

overseas

Containerised componentary transport

by sea

Stevedore and custom clearance at Port Botany

Container transport by (Linfox)

Container is collected by

Linfox

Components transported to Toyota Tsusho Site

Container is unpacked by Linfox

Empty container

transported back to Blayney

Empty containerpark

Vehicle is discharged at

factory

Empty container is either Dehired at Blayney or railed to

nominated empty container park

Delivery Order from Shipping Company

Componentary is discharged at

factory

Toyota Tsusho(Orange)

Electrolux(Orange)

Componentary transferred to

factory (Linfox)

Shipping cost$3,000 – 40ft

container

Road and Rail Cost$850 – 40ft container

$700 – 20 ft

Intermodal Terminal Operator:Linfox

Cost

Tra

nsa

ctio

nP

hys

ical M

ove

ment

Ma

na

ge

me

nt

Pla

yers

Cost

Tra

nsa

ctio

nP

hys

ical M

ove

ment

Ma

na

ge

me

nt

Pla

yers

Ph

ysic

al M

ove

ment

Ma

na

ge

me

nt

Pla

yers

Freight Forwarder (Linfox)Maersk Logistics

Shipper:40 shipping Line and consortia

Stevedore:Patrick TerminalsDP World


inspection


inspection

Port BotanyPort Botany



DriverDocumentation

DriverDocumentation



Electrolux orders refrigerator and

freezer componentry from

overseas

Containerised componentary transport

by sea

Stevedore and custom clearance at Port Botany

Container transport by (Linfox)

Container is collected by

Linfox

Components transported to Toyota Tsusho Site

Container is unpacked by Linfox

Empty container

transported back to Blayney

Empty containerpark

Empty containerpark

Vehicle is discharged at

factory

Empty container is either Dehired at Blayney or railed to

nominated empty container park



Componentary is discharged at

factory



Electrolux(Orange)Electrolux(Orange)

Componentary transferred to

factory (Linfox)

Shipping cost$3,000 – 40ft

container

Road and Rail Cost$850 – 40ft container

$700 – 20 ft

Intermodal Terminal Operator:Linfox

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Challenges for the industry• Changing world economic geography

• Supply chains are becoming longer

• Increasing pressure from customers

• New distribution models are emerging

• Increasing energy costs

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Challenges for the industry• Labour and skill shortages

• Increasing compliance requirements

• Growing urban populations

• Increasing environmental awareness

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Key drivers of innovation• Price driven nature of operations

• Infrastructure capacity issues

• Cost of transport relative to product price

• Labour supply issues

• Service delivery constraints

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Barriers to innovation• Limited ‘co-opetition’

• Limited interfacing

• Domination of incumbent organisations……..

• Certain supply chains in NSW have adopted innovative approaches to overcoming these barriers

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Opportunities to innovate - information• Successful collaboration in NSW export coal and export

grain supply chains

• Both have infrastructure capacity constraints

• Both have shared sensitive information to achieve industry-wide benefits

• Both required ACCC approval to share information and collaborate

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Opportunities to innovate - technology• New technologies are emerging as a result of market

pressures and are being implemented to improve productivity

• Change has been exponential in the development of information and communications technology (ICT)

• Costs of systems have reduced

• Web based freight matching systems represent a good example of innovation

• The rate of technology evolution is rapid - investment decisions can be challenging

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What role can government play?

• Increasing efficiency of transport system though better infrastructure planning and provision

• Improving competitiveness and productivity through better regulations

• Helping industry make informed decisions• Improving industry data to assist policy making

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What do you think?

• What do you think are going to be the most revolutionary innovations in the future of transport and logistics?

• What do you think are going to be the most important innovations for the future?

• Who should have responsibility for making sure it happens?

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