INDUSTRY TRANSFORMATION NEEDED TO MEET SUPPLY CHAIN CHALLENGES SAYS NOL

Neptune Orient Lines' President and CEO David Lim said today that the transportation and logistics industry must be transformed from a series of disparate, component parts to a seamless supply chain in order to address the increasing challenges to moving cargo smoothly.

Mr Lim was addressing students at the Erasmus Centre for Maritime Economics & Logistics (MEL), Rotterdam, as part of the University's Distinguished Lecture series.

He told them customers require solutions that give them speed, flexibility and control across the supply chain. "To achieve this, we need to change the way the supply chain industry is organised - from standalone operations to integrated services; and from piecemeal improvements, to end-to-end solutions," Mr Lim said. "We need to go beyond a collation of services, to a reconfiguration of networks; we need to build new processes for decision making, and systems to support these processes."

Mr Lim suggested that this would bring about fundamental changes to the industry.
"For companies that only provide shipping services, their role may be relegated over time to that of a sub-contractor - providing services not to cargo owners, but to other global transport and logistics companies that add on additional services," Mr Lim said.

"But for those that expand their capabilities, their competitors will no longer just be other shipping companies, but also contract logistics providers, forwarders, integrators, and everyone else in the global transport and logistics industry."

Mr Lim said the development of transport infrastructure would be better coordinated if future forecasts were based on global transport throughput rather than looking piecemeal at ships, terminals, trucks or rail as done in the past. "Likewise," he said, "the nature of competition will be vastly different, when we sell and price shipping services as one part of a global transport solution, rather than as a service offering on its own."

Mr Lim said in the past few years, various mergers and acquisitions had taken place as companies sought to expand their supply chain capabilities but this alone would not bring new solutions. "The different components of the supply chain have to be aligned and melded to form a seamless service before the benefits of speed, flexibility and control can be obtained," Mr Lim said.

He highlighted that new skillsets and mindsets were needed to drive research, innovation and investment "so that we better understand what, where and how we must make adjustments to the current way of doing business."
 

Source: The NOL Group