Hi-tech advances ensure the heavy stuff is moving safely
Container transport might look like the ultimate hardware business, given that it involves massive ships, port infrastructure, gantry cranes, warehouses and trucks. But without the technology and software that control the flow of information and drive today's international supply chain, everything else would soon grind to a halt.
'Our direction in IT is standardisation, simplification and automation,' said Stanley Shen, who oversees investor relations for Orient Overseas (International). By focusing on the in-house development of leading-edge proprietary systems, the company had cut costs, streamlined operations, achieved tighter control of the business, and made it possible for customers to manage their own cargo movements, he said.
Illustrating the immense impact of the latest advances, Mr Shen said that, measured by shipment volume, OOCL had doubled its business in the past four years, while increasing headcount by only 5 per cent.
The company's aim of creating its real-time access system for offices around the world could be traced back to the early 1990s. At that point, costs were rising inexorably and, although all sorts of management information was available, the right people didn't always have it early enough. Therefore, vessels might sail under capacity, it was unclear how many empties were lying where, and customers didn't necessarily know which consignments were ready for shipment.
'We needed a real-time system, so if anyone made a change, others had equal access to the same information without having to batch process [the data],' Mr Shen said.
The latest version 'IRIS 2' system does far more than that. It integrates business processes, financial data and individual customer requirements. Interlinked modules allow staff to calculate the projected profitability of every shipment before loading. As a byproduct of these changes, the corporate culture has also been transformed.
'A person in Xian can access information about a customer in Arkansas,' Mr Shen said. 'When you have the logistics portion of the system to capture the status of the cargo - labelling, boxing, pallet and truck - and the movement milestones, we can save the customer money and save ourselves costs.'
Jeffrey Lau, managing director of OOCL Logistics (Asia Pacific), said the company's 'podium concept' achieved all these objectives by offering a single platform connecting multiple service providers. It took account of the unique needs of different parties involved in the full supply chain such as manufacturers, buyers and importers. Not only that, it recognised that companies operating different sectors, handling perhaps footwear, chemicals or refrigerated cargo, would have different requirements in terms of milestones and data.
'We wanted customers to 'own' the system, and the program is enhanced continuously,' Mr Lau said. 'The latest version was built 100 per cent in-house using the know-how and expertise of our own people.' At present, OOCL has an IT team of about 800 mainly working in Hong Kong, Zhuhai, Shanghai, San Jose and the Philippines.
When a customer signs up to use the 'podium' system, the whole process begins with an 'e-SOP', or electronic standard operating procedure. With this, customers can specify the range of data and milestones required. Those could be anything from 'work in progress' updates to on-board confirmation.
Once the parameters are agreed, there is an auto-generated shipment task plan for every purchase order. Usually, the relevant parties - perhaps the factory, logistics provider, warehouse or trucking company - start to input updated information and status changes from 14 to 21 days before the intended date of export shipment.
'The whole plan is created in the system like an electronic diary,' said Stanley Loo, manager of the customer process and information services department for OOCL Logistics. 'Along the shipment cycle, some tasks are done by ourselves, some by outside parties.'
As a safeguard, there is also an auto-triggering mechanism which sends a pre-advice or instruction in line with the conditions established in the e-SOP, alerting the appropriate party to take action in good time. Besides that, exceptions are automatically highlighted, and historical data can be reconfigured as a tool for later management analysis.
'Most important from the customer's point of view is that they can focus on one SKU [stock-keeping unit], a purchase order, or a container item,' Mr Loo said. This allowed a high degree of visibility with a uniquely flexible format.
'You can change the layout and content of the screen to fit the needs of different users so, for example, a buyer can select only the necessary information,' he said.
Meanwhile, Modern Terminals (MTL) has boosted capacity and productivity at its existing terminals and helped to create a seamless exchange of electronic information as part of a HK$1 billion-plus investment programme.
Key to it is 'OnePort', a neutral one-stop platform co-founded with other Hong Kong terminal operators in 2003. According to Joel Cheung, MTL's corporate affairs manager, it provides an open yet secure link with cargo owners, logistics companies, truckers and shipping lines, giving access to real-time information on status and transactions.
MTL has implemented other sophisticated systems for vessel and yard planning, as well as an automated gatehouse procedure for truckers. This includes a tractor identity card system based on smart cards and bar codes and a 24-hour voice appointment system for container collection. There is also a web and phone-based export pre-advice system, which speeds up turnaround times by allowing truckers to submit container information in advance.
The company also has hi-tech solutions to tighten supply chain security. This integrated container inspection system involves optical character recognition technology, radiographic imaging and radiation scanning of containers on moving trucks. Ms Cheung said the objective was to know 'what's inside the box' for any units moved through the terminal.
