Yantian-Felixstowe demonstration by BAP Logistics

Living Lab White Paper / May 2014
Yantian-Felixstowe demonstration by BAP Logistics
“Participation in the CASSANDRA project meant for BAP that, we were able to identify ways of improving quality compliance measures and reducing costs for our customers” (Robin Smith, BAP Logistics)
BAP Logistics is one of four industry partners in the Cassandra project and is the leading participant of the
Yantian-Felixstowe trade lane. BAP offers value added logistics in the port of Felixstowe. For their customers, BAP plays a vital role in the supply chain by offering quality control and reliability in the consolidation and deconsolidation of shipments that are shipped around the globe. Improving their customer’s
supply chain is the key ambition for BAP and for this they are continually looking for innovative solutions.
In the Cassandra project, BAP’s ambition was to increase service levels to customers, in partnership with
partners in the UK and in China. The focus was on delivering visibility of shipments and thereby reliability
and trust in container content. With this, the ambition was to improve, reduce or even remove the warehousing function on both ends of the supply chain. Visibility was also deemed particularly valuable for
seasonal products or promotions. It has happened that a container with promotional goods was not delivered on time, without special reasons for delay, thereby directly affecting the success of the promotion
and also pushing shipments directly into long term inventory. Alerting could be a means to assess the risk
at an earlier stage enabling to prepare mitigation actions.
The Cassandra solutions for BAP Logistics were tested and evaluated in a demonstration trade lane between Yantian (China) to Felixstowe (UK). The consolidator and freight forwarder on the Chinese side of
the chain was also involved. Several overseas trips were made to understand the Chinese operations and
discuss with Chinese partners the possible benefits of creating full visibility of their operations for the
joint customer.
www.cassandra-project.eu
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Living Lab White Paper / May 2014
Yantian-Felixstowe demonstration by BAP Logistics
Visibility: delivered!
To deliver the visibility that would be valuable to BAP’s customer, a combination of purchase order visibility, shipment tracking and transport milestones was needed. Normally, this kind of information is available in various systems - like ERP, warehouse and transport management systems - and in different
documents along the chain. The challenge in this trade lane was to combine this information in one data
model and then link the various events in real-time. The challenge was especially large because purchase
orders and shipments from multiple shippers were consolidated in a container.
Figure 1 shows how multiple purchase order lines can be combined in three containers. These three containers were combined in one carrier booking and on one master bill of lading. The purchase orders are
linked to a specific container during container stuffing. The visibility solution should enable users to drill
down from one instance to another, for example starting with a purchase order line, then zoom in on the
booking for ocean transport and the container manifest of a specific container.
Figure 1: Complexity in an Less-than-Container Load (LCL) trade lane
The crucial part of the supply chain information that was needed to deliver the desired benefits for BAP’s
customer was the data from the so-called Consignment Completion Point (CCP). The CCP in this trade lane
is the moment of stuffing in which the actual container content is confirmed by the tally man who oversees the loading operation. Knowing this is a controlled process in Yantian, and thus increasing the reliability of the data, makes the information in the visibility solution even more valuable.
www.cassandra-project.eu
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Living Lab White Paper / May 2014
Yantian-Felixstowe demonstration by BAP Logistics
The visibility solution was developed by Cassandra partner Descartes (figure 2). It includes various views
on shipment, container, purchase order, transport means (e.g. ocean vessel) and bookings. Interfaces
with the BAP Logistics system, the purchase order tracking system, the systems of the forwarder and consolidator in Yantian, data from the customs agent in the UK, the ocean carriers and an AIS provider were
used to create full visibility. The information in the solution is updated daily and thus provides a reliable
overview of supply chain activities. Alerting is also included in the functionality and the following alerts
are examples of what was implemented:
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Quantity discrepancies between purchase order and container manifest;
Alert specific containers containing promotional/seasonal products as these are top priority;
Alert containers that have missed the vessel they were due to depart on;
Vessel delays or early arrival;
Unexpected transhipments;
Customs Release in the UK.
Figure 2: Result: Complete visibility in the Descartes solution (www.descartes.com)
From warehousing to stacking and promotions picked in China
BAP Logistics aimed to offer their customers better visibility to improve reliability and trust in container
content. The developed visibility solution enabled this, meaning BAP was able to optimise warehousing
for its customer in this trade lane. Around 140 loaded containers per month could be kept in a dedicated
BAP stacking area, thus freeing up valuable warehousing space for BAP Logistics and lowering the warehousing rates for the customers. This would not have been possible without full visibility and trust on
what products and quantities were in each of these containers. The costs saving for both BAP and their
customer was around 80% of the original rate for warehousing.
www.cassandra-project.eu
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Living Lab White Paper / May 2014
Yantian-Felixstowe demonstration by BAP Logistics
The improved reliability and trust also allowed targeted stuffing of containers with promotional products
by the Chinese consolidator for specific stores. These are called Origin Pick promotions, and allow BAP
Logistics to provide a Just in Time style service to their customer in the UK. The alerting functionality
made it possible for BAP Logistics to actively monitor the containers, their contents and the time lines for
final delivery to stores. Preparation for several promotions, like Valentine’s day and Easter could be supported during the trial period. This was done using the alerts for containers containing Origin Pick promotions and for expected container delay. Overall, the visibility and alerting has led to reduced (long term)
storage in Felixstowe. Also the Origin Pick promotions in general allowed for reduced storage at the
freight forwarder in China.
In addition to this, BAP Logistics saw a clear benefit for improved warehouse planning based on better
visibility of the container content combined with the vessel tracking. Especially the number of cardboard
boxes and cargo type was important for the de-stuffing operation. In addition to this, the solution included volumetric data which allowed BAP Logistics to derive the pallet configuration prior to operation
thus providing warehouse staff with better information upfront. Overall, BAP Logistics estimates a cost
saving in warehousing of around 25% for more efficient operations, both administrative and warehousing. Also a revenue increase of around 10% is expected as a result of improved packaging and use of
warehouse space.
Having more detailed packaging information also brought to light issues with inefficient goods consolidation. BAP’s customer has detailed requirements for when a container is allowed to be shipped as a full
container load directly from the factory instead of via the consolidation centre. Some boxes turned out to
be over-dimensioned, thus consuming more container volume than strictly needed and in some cases this
resulted in box and product damage. Visibility thus resulted in new regulations and fining of suppliers by
the buyer in order to reduce packaging issues.
Looking ahead
Early in the demonstrations in the Cassandra project, it was clear that the BAP Logistics demonstration
holds a strong case for visibility solutions. BAP therefore decided to join the consortium for the FP7 Core
project. In the Core project, the visibility solution will be further improved and linked to UK Customs to
enable piggy-backing by UK customs on the supply chain data. Expected results are more cooperation
between BAP and UK Customs, increased security and perhaps even better facilitated trade. The visibility
solution will be applied to other trade lanes to show its transferability.
Contact details
Robin Smith, BAP, Email: [email protected]
John Prop, BAP, Email: [email protected]
Inge Lucassen, TNO, Email: [email protected]
Further information
www.cassandra-project.eu
www.bapgroup.ltd.uk
www.cassandra-project.eu
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