{"id":1192,"date":"2016-08-26T23:38:07","date_gmt":"2016-08-26T13:38:07","guid":{"rendered":"http:\/\/casestudyhelp.com\/sample-questions\/?p=1192"},"modified":"2018-01-23T16:26:10","modified_gmt":"2018-01-23T05:26:10","slug":"psa-operation-management-assignment-help","status":"publish","type":"post","link":"https:\/\/casestudyhelp.com\/sample-questions\/psa-operation-management-assignment-help\/","title":{"rendered":"PSA Operation Management Assignment Help"},"content":{"rendered":"

Introduction\u00a0\u00a0\u00a0\u00a0<\/strong><\/p>\n

PSA was previously called Port of Singapore Authority. Its mission and values statement is shown in Table cs4.1. Starting in 1964, PSA has now become much more than a giant Singapore-based shipping hub entity. In 2007, PSA handled tens of millions of TEUs,1<\/sup> with volumes growing some 15 per cent from the previous year2<\/sup>.<\/p>\n

The signing of the contract to build and operate a major container por t at the Panama Canal i n March 2007 marked another milestone for PSA Inter\u00ad national (PSA) – it extends i ts global\u00a0 reach to yet another continent, the A mericas. The new container port at the Panama Canal, the world’s\u00a0 third busiest waterway, is slated to double Panama’s port capacity and enhances PSA’s position\u00a0 in the fast-growing trade between China and East Coast of America.3<\/p>\n

\"Operation<\/a><\/center><\/p>\n

‘I am pleased that we have taken this important step to develop a major port facility on the Pacific coast, in tandem with the widening and expansion of the Panama Canal, which is currently under way’, said PSA chief executive Eddie Teh.<\/p>\n

Within a few years -of \u00a0its globalization plan, PSA has extended its reach to\u00a0 25\u00a0 ports\u00a0 in\u00a0 14 countries\u00a0\u00a0\u00a0\u00a0 in Asia, Europe and\u00a0 now the\u00a0 Americas. For the first time in the group\u2019s history, its overseas terminals handled more container\u00a0 boxes (27.3 million) than the 24.0 million through-put\u00a0 at Singapore.<\/p>\n

However, not all deals were smooth sailing. In March 2006, PSA bowed out of a bidding war with Dubai’s\u00a0 DP World to acquire Britain’s Peninsular & Oriental Steam Navigation Co (P & 0) after accumulating a 4.1 per cent stake in the British company. In another recent development, the 25-year contract with Brunei’s government in the setup ofMuara Container Terminal (MCT) came to a premature end just six years into its operation. PSA Muara has transferred its port operations knowledge and trained MCT’s port managers in the state-of-the-art equipment.<\/p>\n

5<\/p>\n

History<\/strong><\/p>\n

PSA was formerly the Port of Singapore Authority, a governmental\u00a0 body responsible for regu lating, developing, operating and promoting the port of Singapore’s terminals. In 1996, the Singapore government passed a bill to set up a new stat utory board called the Maritime and Port Authority of Singa\u00ad pore (MPA) to take over the port development and regulatory functions. PSA Corporation Limited was incorporated in 1997 to concentrate on container terminal operations.<\/p>\n

\"Operations<\/a><\/center><\/p>\n

As container volumes grew in the 1970s and 1980s, PSA Singapore Ter\u00ad minals had handled more than five million TEUs, making Singapore one of the world’s largest container ports. At present, PSA Singapore Terminals is<\/p>\n

the world’s\u00a0 largest container transshipment hub,\u00a0 handling about one-fifth of the world’s\u00a0 total container transshipment throughput, and 6 per cent of the global container throughput.<\/p>\n

With an established brand\u00a0 name in the provision of highly efficient and reliable container handling services, PSA expanded its global reach by setting up its first\u00a0 overseas venture\u00a0 in\u00a0 Dalian, China.\u00a0 Today, PSA participates\u00a0 in<\/p>\n

25 port\u00a0 projects in 14 countries, and\u00a0 handled\u00a0 a total of 51.3 million TEUs globally in 2006. PSA currently has a network\u00a0 of 200 shipping\u00a0 lines with connections to 600 ports\u00a0 in 123 countries, spanning\u00a0 half the globe across Asia and Europe.6<\/p>\n

PSA was also perceived to be a ‘neutral’ operator that enjoys good relations with many countries, including United States, India and China. In 2006, Pak\u00ad istan announced that it had picked PSA to run its deep-water portofGwadar. The port was constructed with aid from China, and tagged by Western and Indian analysts as an attempt by Beijing to tap on the alliance to extend its reach to the Arabian Sea? With its neutrality and expertise in port manage\u00ad ment, PSA was seen as a perfect fit for the contract.<\/p>\n

PSA’s success is demonstrated in yet another year of record gain:\u00a0 PSA<\/p>\n

posted a 14.3 per cent rise, or $1.21 billion, in profit for the year 2006, beat\u00ad ing the records for the previous two years. Besides strong\u00a0 world economic growth\u00a0 which fuelled robust\u00a0 global\u00a0 trade expansion,\u00a0 PSA has continually strengthened its leadership\u00a0 in 2006. This is achieved through\u00a0 both capacity expansion of existing terminals and investments in new port projects around the world.8\u00a0 Over the years, PSA has won many internationally acclaimed awards both in operation\u00a0 excellence and IT innovation\u00a0 (see Figure cs4.1 for the list of awards).<\/p>\n

\u00a0\"Order<\/a> \"Chat<\/a><\/p>\n

As a reflection of its international orientation, PSA adopted a new corpo\u00ad rate structure in December 2003, changing its name from PSA Corporation Ltd to PSA International Pte Ltd and became the main holding company for the PSA Group of companies, including PSA Singapore.<\/p>\n

Operational excellence and capabilities<\/p>\n

The bulk of the containers that flows through PSA Singapore are transshipment cargo. Transshipment refers to the situation where containers are trans\u00ad ported by a vessel \u2022to an intermediate port, and then sorted and transferred to other ships according to their final destination.<\/p>\n

At the\u00a0 container\u00a0 terminal\u00a0 in Singapore,\u00a0 the\u00a0 containers\u00a0 from\u00a0 arriving vessels are offloaded\u00a0 to prime movers by cranes and\u00a0 transported to other berthed\u00a0 ships\u00a0 or\u00a0 to\u00a0 the yard\u00a0 for storage\u00a0 according\u00a0 to\u00a0 their size, weight, category\u00a0 and\u00a0 destination. This way, the containers from different ports bound for the same destination can be loaded onto one ship, reducing the number of trips the vessel needs to make. Similarly, goods from one pore bound for multiple different ports can be sorted and transshipped from Singapore.<\/p>\n

Due to the high fixed cost of infrastructure and equipment, the volume handled is crucial to achieve economies of scale and profitability. This is where the operational efficiency and high connectivity of PSA comes in as a key competitive element. Due to Singapore’s strategic geographical location, \u2022 PSA provides about 200 shipping lines with connections to 600 ports in 123 .\u2022\u2022\u2022 countries. This means that shippers will easily find a ‘connecting’ service to a destination port from Singapore rather than to locate a direct service from the port of loading.<\/p>\n

Since 1999, the container throughput in Singapore grew steadily from 15.9 million TEUs to 24.8 million TEUs in 2006 (see Figure cs4.2), making Singapore one of the busiest ports in the world in 2005 (see Figure cs4.3). Equally impressive is the overseas operations of PSA in Europe, China and other parts of Asia. Their combined throughput of27.3 million TEUs in 2006 is a year-on-year increase of 30.2 per cent.<\/p>\n

\u00a0\"Order<\/a> \"Chat<\/a><\/p>\n

Technology and systems<\/strong><\/p>\n

PSA is known for its operational excellence. To stay competitive and trans\u00ad ship goods in the shortest time possible, PSA continuously upgrades its tech\u00ad nology and container-handling infrastructure\u00a0 to ensure the highest quality of services are provided to its customers. In-house software was developed to manage and\u00a0 track more than 60000 TEUs per day and ensure that all aspects of its operations run efficiently and reliably, 24 hours a day, 365 days a year.<\/p>\n

At\u00a0 the\u00a0 heart\u00a0 of\u00a0 PSA’s\u00a0 operations\u00a0 is\u00a0 two\u00a0 real-time e-commerce and computer-integrated terminal operations systems: PORTNET\u00ae and CITOS\u00ae (Computer Integrated Terminal Operations Systems).<\/p>\n

PORTNET\u00ae system<\/strong><\/p>\n

Developed in 1984, PORTNET\u00ae is a port community system that integrates services to shipping lines, hauliers, freight forwarders, shippers and local government agencies. The web-based system enables 100 per cent end-to\u00ad end information workflow and enables the customers to book berths, order marine services, transact bills and receive alerts, and track their vessels and cargo on a real time basis. Its 8000 users generate 90 million transactions on average annually.9 To serve its various customers better, Portnet.com Pty Ltd was created\u00a0 as a subsidiary company to PSA in 2000.<\/p>\n

Other solutions are offered by Portnet.com are outlined below.<\/p>\n

EZShip<\/strong><\/p>\n

This is a transshipment facilitation system for both main line operators (MLOs) and feeders. It is an Internet-based system that provides a synergistic linkage with the PORTNET system and is customisable to shipping lines’ in-house systems, thus eliminating the need for data re-keying and maintain\u00ad ing data integrity and timeliness. Using a personal computer, customers can log in to EZShip and view details like containers assignment to vessels, vessel space management, receive automated event alerts,\u00a0 process inter-ship in line billing and customize\u00a0 their reports.<\/p>\n

\"Order<\/a> \"Chat<\/a><\/p>\n

Global equipment management system (GEMS)<\/strong><\/p>\n

This is an e-business solution for container owners. It maintains information of a shipping line’s container stock at container terminals, on-dock depots, external depots, inland depots and offshore sites, providing real time tracking of container or equipment stock and movement globally to the shipping lines, allowing them to plan ahead and assist in reducing repositioning of the containers. The system provides online submission of repair estimates by depots and online approval of repair. It also manages contracts with leasing companies and shipping lines, and gene rates overdue and overstaying reports for containers in depots, transit, port, and shippers or consignees premises.<\/p>\n

Throughput analysis and vessel information system (TRAVIS)<\/strong><\/p>\n

This is a web-enabled management reporting tool to help shipping lines and shipping agents to track their throughput, transshipment volume, dwell time and vessel performance .The system automates the tedious datacollection and entry and generates reports that can be used to analyse transshipment of vessel voyage and connection patterns. Dwell time and vessel performance reports can also be generated for shipping lines to check the container dwell times and connection rebates, vessel rates and crane intensity rates. Throughput reports can also be customised to provide customers with throughput information of their containers, slots and vessels.<\/p>\n

ALLIES<\/strong><\/p>\n

This\u00a0 is a suite\u00a0 of modules\u00a0 that\u00a0 facilitate\u00a0 co-ordination and\u00a0 collaboration among\u00a0 shipping\u00a0 alliance partners. ALLIES include modules for load\u00a0 track\u00ad ing\u00a0 and\u00a0 reporting, re-selling and\u00a0 sublefting of slots, online\u00a0 approval\u00a0 for loading\u00a0 of special containers and online exchanges of slots and containers. This value added ser vice enhances the shipping\u00a0 network, which in turns pro\u00ad vides added incentives for the shippers to transship their cargo through\u00a0 PSA Singapore.<\/p>\n

CargoD2D 10<\/strong><\/p>\n

This is a one-stop In ternet-based\u00a0 global freigh t reservations system for the shipping community. It facilitates\u00a0 the matching\u00a0 of shippers’ cargo trans\u00ad portation req uirements\u00a0 to offers from various logistics players in the entire end-to-end supply chain such as wa ehouse operators, trucking companies, inter-modal operators, shipping lines and terminal handling agents.<\/p>\n

CITOS\u00ae System<\/strong><\/p>\n

With about 60 vessels of different sizes calling on any given day and 90 per cent of them arriving out of schedule due to weather conditions or delays from other port operations, PSA is able to ensure ‘berth on arrival’ with its CITOS\u00ae (Computer Integrated Terminal Operations) System. This is an Enterprise Resource Planning (ERP) system that manages container handling during loading, unloading and storage.<\/p>\n

Besides optimising the allocation of resources,CITOS\u00ae alsogeneratesship stowage plans and yard layout plans for container stacking based on factors such as ship stability, weight and destination of container and other special requirements such as refrigeration and handling of flammable or danger\u00ad ous goods. The system tracks the location of each container-.and facilitates efficient retrieval. The CITOS\u00ae System helped PSA Singapore handle some 24 million TEUs of containers in 2006.<\/p>\n

\u00a0\u00a0 \"Order<\/a> \"Chat<\/a><\/p>\n

Flow-through gate system<\/strong><\/p>\n

The paperless Flow-Through Gate system processes a haulier in 25 seconds, which is the world’s fastest time. This is done through Container Number Recognition System and Auto-Paging.The Flow-Through Gate system han\u00ad dles an average traffic flow of 700 prime movers per peak hour, and 8000 prime movers per day.<\/p>\n

The fully automated\u00a0 and paperless process clears prime movers going into the port within 25 seconds through the use of highly automated and streamlined processes. When a truck arrives at the gate, the system auto\u00ad matically picks up the signal from the transponder on the truck’s cabin. The container number is captured by the Container Number Recognition System via the CCTVs at the gate. The weight of the truck (taken at the weighbridge), driver’s identity, truck’s identity and the container number are verified against the system and cleared. The automatic paging system then informs the driver the exact position in the yard where the container will be stacked.<\/p>\n

Moving forward<\/strong><\/p>\n

Leveraging its expertise in terminal operations, PSA has successfully emerged as one of the busiest ports in the world and the world’s port of call. However, competition in port operations has heated up over the years, notably from neighboring Malaysia’s Port of Tanjung \u00a0Pelepas (PTP) and the threat from Hong Kong and Shanghai ports. PTP, being in close proximity to Singapore, had in particular diverted some cargo volume when PSA’s major customers Maersk Sealand and Evergreen Marine Corporation\u00a0 moved their operations there. As an indication of its success, PTP posted a record throughput of 2.24 million TEUs in the first six months of 2006. In addition, Malaysia is also promoting\u00a0 PTP as the preferred port for customers by integrating PTP to the Port Free Zone which houses logistics and manufacturing\u00a0 industrial centers.<\/p>\n

Besides competition in the area of lower costs, more and more shippers are also working on vertically integrating their operations by requesting for a stake in the port and operating their own terminals. PSA had been reluctant to negotiate as this directly impacts its core business of terminal operation.<\/p>\n

Yet another challenge lies in the ever increasing vessel capacity. While normal Panamax vessels carry between 3000 and 5000 TEUs, bigger post- Panamax vessels (named as they can no longer pass through the Panama Canal) carry between 4500 and 9800 TEUs. Super post-Panamax vessels like Emma Maersk, which at 397m length and 56 m width, can carry 11000 standard containers or 15 per cent more than its closest rival, China Shipping Container Lines’ Xin Los Angeles. With such big capacities, these ships can potentially bypass transshipment hubs like PSA and ship the cargoes directly to the destinations.<\/p>\n

\u00a0\"Order<\/a> \"Chat<\/a><\/p>\n

The global shipping landscape has changed significantly with the increasing privatization of ports by many countries. While PSA has performed well thus far, aided in part by the booming China trade, the task of managing a global corporation\u00a0 amid growing competition\u00a0 becomes more and\u00a0 more challenging and complex.<\/p>\n

Looking ahead, how can PSA further leverage on its operation expertise and technology to compete in the competitive and volatile global sea trade business? Is PSA helping to turn its partners into formidable competitors? Can suitable and qualified\u00a0 managers be recruited fast enough\u00a0 to run\u00a0 its rapidly expanding global operations, and what can be done to retain human talent within PSA? Can PSA sustain long-term growth and perhaps launch an IPO?<\/p>\n

Note:<\/strong> DWT- Deadweight Ton is the displacement at any loaded condition minus the lightship weight. It includes the crew, passengers, cargo, fuel, water, and stores.<\/p>\n

Source:<\/strong>\u00a0 US Department of Transportation Maritime Administration,<\/p>\n

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