Value of information in port logistics

1. Technology & Operations Management Value of information in port logistics Rob zuidwijk rzuidwijk@rsm.nl

2. Erasmus Smart port: port professors Academic Agenda Operational Excellence in Ports and Networks generate Drivers for Green Port Related Operations Research Governance for a Sustainable Port Rob Zuidwijk Academic Director Ports as Nodes in Global Supply Chains knowledge Visibility for a Connected Port Valorization Education apply Hein Klemann Professor in Social and Economic History, Erasmus School of History, Culture and Communication share

3. Agenda • Introduction • Quality and Value of Information: Container Transport • Inter-Organizational Systems: Port Community Systems • Conclusions

4. reflection Quality and value of information

5. Quality of information: multiple dimensions Source: Diane M. Strong, Yang W. Lee, and Richard Y. Wang (1997). Data Quality in Context. Communications of the ACM 40(5): 103-110.

6. believability CERTIFICATION • A container contains of a number of consignments; • Integrity of all consignments has been certified; • The loading of the container with the consignments has been monitored by a certified third party; • The container has been sealed with an electronic seal that reports tampering etc. • Do you believe that the container is secure? • What is the role of believability of information here? DEFINITION • Irrespective of the information provided, do you believe that the information is accurate, considering the person or organization you got it from? • Reputation of the information source

7. timeliness DISCUSSION • It has been agreed earlier that a shipment needs to arrive at 12 PM; • It actually arrives at 13 PM; • What is the value of advance information? FORECASTING • Expected Time of Arrival (ETA) of a sea vessel at the Port of Destination should “converge” to the Actual Time of Arrival (ATA) as time progresses; • What is the benefit of fast convergence? ETA ATA time ATA

8. Benefits of better Forecasts Early arrival Cost of re-planning or in-transit inventory cost Late arrival Cost of re-planning and in-transit inventory cost Benefit Opportunity of alignment Alignment of arrival distribution and planning time window creates opportunity to reduce expected costs.

9. Value of information Value of information = the benefit of having information of a higher level of quality at your disposal; Value of information is reaped when higher level of quality is used to make better decisions; Value of information: • cost reduction • revenue enhancement • less emissions • more reliable service • less accidents • ...

10. reflection Inter-organizational systems

11. IOS = Inter Organizational SystemS PORT COMMUNITY SYSTEM SUPPLY CHAIN MANAGEMENT SYSTEM Information sharing between organizations in a port cluster Information sharing between organizations in a supply chain

12. Ports in Global Networks Producer/Shipper Wholesaler Receiver Port of Origin Community Port of Destination Community Inland Post-carriage Inland Pre-carriage Retailers Suppliers Sea Terminal Sea Terminal Wholesaler Receiver Producer/Shipper Shipping Line Retailers Suppliers Global Supply Chain Port Authority Customs Port Authority Customs Wholesaler Receiver Producer/Shipper Retailers Suppliers Consigners/Consignees Logistic Service Providers Transshipment and Storage Forwarders and Agents Authorities

13. Ports in Global Networks Producer/Shipper Wholesaler Receiver Port of Origin Community Port of Destination Community Inland Post-carriage Inland Pre-carriage Retailers Suppliers Sea Terminal Sea Terminal Wholesaler Receiver Producer/Shipper Shipping Line Retailers Suppliers Port Authority Customs Port Authority Customs Wholesaler Receiver Producer/Shipper Retailers Port Community Suppliers Consigners/Consignees Logistic Service Providers Transshipment and Storage Forwarders and Agents Authorities

14. Two types of Inter Organizational Systems • Supply Chain Systems • SAP, Oracle, …, GT Nexus, Tradebeam, etc. • Port Community Systems • Portbase (Rotterdam and Amsterdam) • Dakosy (Hamburg) • PortNet (Singapore) • etc. • A Landscape of Inter-Organizational Systems!

15. IOS: Port Community System

16. Port Community Services Rail planning The service Rail planning ensures optimal exchange of information surrounding the processing of trains and their cargo in the ports. Rail operators, traction suppliers, rail terminals, sea terminals and rail infrastructure operators stand to benefit. The information exchange in the service allows them to work more efficiently. It allows the processing of trains to become considerably more streamlined, saving the sector around 50,000 phone calls a year. On average it takes 1 1/4 hours less to process the administration associated with a train.

17. What Business Model?

18. Pricing of services on a platform User 1 User 3 User 2 • Users are both producers of data and consumers of services • The platform provides an infrastructure • The services provide value to the users • The platform provides value to the services • What prices should the users pay and how should these revenues be distributed among services and platform? Factors • Structure of interdependent services • Service value dependent on adoption rate of users Service 1 Service 2 Service 3 Platform price/fee value data/infrastructure

19. Conclusions SUMMARY • Quality of information and value of information are both multi-dimensional • Landscape of inter-organizational systems • Pricing of services on information service platforms CONCLUSIONS • There are methods to compute the value of information • Value of information in logistics requires further research

20. discussion