The Internal Logistics of Port Enterprises and ItsRationalizationPrinciplesZHENHong(Transportation Management College, Shanghai Maritime University, Shanghai 200135, China)1 Concepts governing the internal logistics of port enterprisesSince its introduction, "Logistics" has been attracting attention for its increasing influences on themanufacturing, currency, consumption and service of merchandise.“Logistics", a borrowed word, describes the physical movement of an entity from supplier toreceiver."logisticsconsistsofaseries ofeconomicactivitieswhich can createtimeand spaceefficiencies; it integrates transportation, storage, packaging, stevedoring, circulation, andmanufacturing,as wellas informationprocessing and otherbasicactivities.In "logistics, the“goods"to be transported means, in a broad sense, all entities with economicvalue, that is, the objects of manufacturing, distribution and consumption. It includes tangible andintangible objects, and also includes those objects involved in the manufacturing process; rawmaterials, accessories, semi-finished and finished products, as well as those products in circulation,andtheby-productsofconsumption.However,inpractice,weusegoods"tomeanthecompleterange of objects in logistics."Interflow"means the directional movement of the entity. It includesspatial displacement and temporal continuance.Interflow,ortransference,is a kind ofeconomicactivity.According to the physical movement of the objects, logistics can be divided into social logisticsand enterprise internal logistics. Optimizing the internal logistics of an enterprise will be moreimportant if the range of spatial logistics in its internal manufacturing process is broader. Logistics inthis paper refers to the enterprise's internal logistics. A port, which is a site for haulage, stevedoring,storage and processing of goods, has the advantage of more space for manufacturing. This advantageencourages the development of a comprehensivelogistics system for theport.The rationality ofthissystem directly influences both the production costs and the service quality of port enterprisesGenerally, the internal logistics of port enterprises should contain three basic factors; the entity orcargo for interflow, the carrier, and the direction of inter flow.The “entity" for interflow means the cargo through the port. The purpose of internal logistics is tofulfill the interflow from the supplier (such as the ship) to the receiver(such as the railway).In the
The Internal Logistics of Port Enterprises and Its Rationalization Principles ZHEN Hong (Transportation Management College, Shanghai Maritime University, Shanghai 200135, China) 1 Concepts governing the internal logistics of port enterprises Since its introduction, “Logistics” has been attracting attention for its increasing influences on the manufacturing, currency, consumption and service of merchandise. “Logistics”, a borrowed word, describes the physical movement of an entity from supplier to receiver. “logistics” consists of a series of economic activities which can create time and space efficiencies; it integrates transportation, storage, packaging, stevedoring, circulation, and manufacturing, as well as information processing and other basic activities. In “logistics”, the “goods” to be transported means, in a broad sense, all entities with economic value, that is, the objects of manufacturing, distribution and consumption. It includes tangible and intangible objects, and also includes those objects involved in the manufacturing process; raw materials, accessories, semi-finished and finished products, as well as those products in circulation, and the by-products of consumption. However, in practice, we use “goods” to mean the complete range of objects in logistics. “Interflow” means the directional movement of the entity. It includes spatial displacement and temporal continuance. “Interflow”, or transference, is a kind of economic activity. According to the physical movement of the objects, logistics can be divided into social logistics and enterprise internal logistics. Optimizing the internal logistics of an enterprise will be more important if the range of spatial logistics in its internal manufacturing process is broader. Logistics in this paper refers to the enterprise's internal logistics. A port, which is a site for haulage, stevedoring, storage and processing of goods, has the advantage of more space for manufacturing. This advantage encourages the development of a comprehensive logistics system for the port. The rationality of this system directly influences both the production costs and the service quality of port enterprises. Generally, the internal logistics of port enterprises should contain three basic factors; the entity or cargo for interflow, the carrier, and the direction of inter flow. The “entity” for interflow means the cargo through the port. The purpose of internal logistics is to fulfill the interflow from the supplier (such as the ship) to the receiver(such as the railway).In the
process of interflow, parts of the cargo should be stored in the port storage, which is a prerequisite ofthe effective interflow. On the other hand, all the cargo in the port should go through the process ofhaulage and stevedoring. Therefore, in a word, the cargoes in the port are in constant movement. Inlight of an entity's natural properties and social properties,we can figure out the value ofthe entity onthe basis of the value of per-unit cargo. The value of the entity, which can reflect the value of thecargoes, provides an important reference for the port to plan its production. The cargo with highervalue deserves more attention in the port's internal logistics, including cargo insurance, stevedoringstorage, packing and haulage. For the classification of the entity according to its value, we can adoptthewell-knownABCtaxonomy.The “carrier"means the facilities and equipment for the entity to interflow. It can be divided intotwo kinds: one is the fundamental facility such as sea-routes, docks internal port roads, port pools, etcThe other is the equipment for directly carrying the entity ; the machines for haulage, stevedoring andso on. The state of the carrier in the internal logistics of port enterprises, especially the state of thefundamental logistics facilities, has a crucial influence on the quality,efficiency and benefit of theinternal logistics of the port enterprises.The“direction"means the direction of the inter-flow from the beginning point to the end point.Logistics has four directions: First, the natural direction, which is the result of natural selection. Itmeans the direction of the cargoes in haulage and stevedoring, and the cargoes are decided by thedifference of import and export and by a reasonable arrangement of routes.The second is theappointed direction; for example, for the balanced arrangement oftasks in all the ports, the directionof the logistics is assigned artificiallyby the supervisors of theport.The third is the market direction.whichmeansthedirection ofthe internal logisticsdecidedbytheowners andthecarriers ofthecargoes; For example, the owner can decide the berth for stevedoring. The forth is the actual directionwhich means the direction of the internal logistics in actual work.The internal logistics of the port enterprises, which is similar to the social logistics in many ways.mainly performs fourfunctions, storage,haulage and stevedoring,distribution and informationprocessing.The function of storage is the static link in the internal logistics system of the port enterprises. Theman-agers of the port improve efficiency when they iron out the contradictions of time in the processof import and export. As a result, they create more value in the adjustment of time imbalance in
process of interflow, parts of the cargo should be stored in the port storage, which is a prerequisite of the effective interflow. On the other hand, all the cargo in the port should go through the process of haulage and stevedoring. Therefore, in a word, the cargoes in the port are in constant movement. In light of an entity's natural properties and social properties, we can figure out the value of the entity on the basis of the value of per-unit cargo. The value of the entity, which can reflect the value of the cargoes, provides an important reference for the port to plan its production. The cargo with higher value deserves more attention in the port's internal logistics, including cargo insurance, stevedoring, storage, packing and haulage. For the classification of the entity according to its value, we can adopt the well-known ABC taxonomy. The “carrier” means the facilities and equipment for the entity to interflow. It can be divided into two kinds: one is the fundamental facility such as sea-routes, docks internal port roads, port pools, etc. The other is the equipment for directly carrying the entity ; the machines for haulage, stevedoring and so on. The state of the carrier in the internal logistics of port enterprises, especially the state of the fundamental logistics facilities, has a crucial influence on the quality, efficiency and benefit of the internal logistics of the port enterprises. The “direction” means the direction of the inter-flow from the beginning point to the end point. Logistics has four directions: First, the natural direction, which is the result of natural selection. It means the direction of the cargoes in haulage and stevedoring, and the cargoes are decided by the difference of import and export and by a reasonable arrangement of routes. The second is the appointed direction; for example, for the balanced arrangement of tasks in all the ports, the direction of the logistics is assigned artificially by the supervisors of the port. The third is the market direction, which means the direction of the internal logistics decided by the owners and the carriers of the cargoes; For example, the owner can decide the berth for stevedoring. The forth is the actual direction, which means the direction of the internal logistics in actual work. The internal logistics of the port enterprises, which is similar to the social logistics in many ways, mainly performs four functions; storage, haulage and stevedoring, distribution and information processing. The function of storage is the static link in the internal logistics system of the port enterprises. The man-agers of the port improve efficiency when they iron out the contradictions of time in the process of import and export. As a result, they create more value in the adjustment of time imbalance in
different carriers.Therefore,thestoragefunctioncontributestoaDeviation and modulationas well asmore value and benefits for the whole internal logistics system.Haulage and stevedoring control the movement of cargoes from the time of entering the port toleaving it. The function is a real value - added link in the internal logistics of port enterprises.Distribution is a function derived from the internal logistics of port enterprises whose purpose is totransport the cargos to the clients. For example, the internal logistics of port enterprises shouldcalculate, pack, distribute and transport the cargoes in the port. The distribution, which occurs at theintersection of transportation and consumption, is the stretching end of the internal logistics of portenterprises.Information processing accompanies internal logistics. All cargoes making the spatial movementare bound to be accompanied with the movement of their related information; therefore, the port mustmanagemassesof informationeffectivelywiththeinterflowofthecargoes.Ahigherdegreeoftheinformation management leads to the greater efficiency of internal logistics.2 The importance of rationalizing the internal logistics of port enterprisesAs the distribution center for cargoes and the transfer center for all kinds of carriers, ports mustalways contend with the busy circulation of cargoes in their limited space. However, up to now, wehave never fully studied the rationalization of the internal logistics of port enterprises.As a result,port development has lagged. Thus, studies of the rationalization of the internal logistics of portenterprises are very importantfor these reasonsRationalization can reduce time for anchoring, making the port operation of cargoes more orderedand providing these benefits:1) Reducing the cost of stevedoring. The optimal method for the internal logistics of portenterprises can reduce the energy consumption to a minimum, which can reduce the cost ofstevedoring.2) Rational arranging of the flow of port operations. The choice of the method for the internallogistics of port enterprises directly influences the flow of the operation in the port, and influences onworking arrangements. Rational arrangements can reduce the investment in construction at the port,and enable full utilization of port land.3 Optimizing the internal logistics of port enterprises
different carriers. Therefore, the storage function contributes to a Deviation and modulation as well as more value and benefits for the whole internal logistics system. Haulage and stevedoring control the movement of cargoes from the time of entering the port to leaving it. The function is a real value - added link in the internal logistics of port enterprises. Distribution is a function derived from the internal logistics of port enterprises whose purpose is to transport the cargos to the clients. For example, the internal logistics of port enterprises should calculate, pack, distribute and transport the cargoes in the port. The distribution, which occurs at the intersection of transportation and consumption, is the stretching end of the internal logistics of port enterprises. Information processing accompanies internal logistics. All cargoes making the spatial movement are bound to be accompanied with the movement of their related information; therefore, the port must manage masses of information effectively with the interflow of the cargoes. A higher degree of the information management leads to the greater efficiency of internal logistics. 2 The importance of rationalizing the internal logistics of port enterprises As the distribution center for cargoes and the transfer center for all kinds of carriers, ports must always contend with the busy circulation of cargoes in their limited space. However, up to now, we have never fully studied the rationalization of the internal logistics of port enterprises. As a result, port development has lagged. Thus, studies of the rationalization of the internal logistics of port enterprises are very important for these reasons Rationalization can reduce time for anchoring, making the port operation of cargoes more ordered and providing these benefits: 1) Reducing the cost of stevedoring. The optimal method for the internal logistics of port enterprises can reduce the energy consumption to a minimum, which can reduce the cost of stevedoring. 2) Rational arranging of the flow of port operations. The choice of the method for the internal logistics of port enterprises directly influences the flow of the operation in the port, and influences on working arrangements. Rational arrangements can reduce the investment in construction at the port, and enable full utilization of port land. 3 Optimizing the internal logistics of port enterprises
In themanagement of portenterprises,in ordertopromotework efficiency,reduce operating costs,improve service and increase economic efficiency, the method of achieving therationalization of theinternal logistics is an issue that deserves better studyThe rationalization of the internal logistics of port enterprises is a complicated and systematic task.However, with improved study,we can abstract some principles that we can employ to optimize theinternal logistics of port enterprises.1)ImprovingthestandardofmechanizationEffective methods of mechanization should be adopted as much as possiblefor those situationswhich are labor intensive, require frequent haulage and stevedoring, contain difficult workingconditions and repetition.For example, in some modern ports, when the level ofmechanization andautomation is much improved, the need for manpower is reduced to a minimum. Another example isintheautomation-oriented systemforhaulageonthefullyautomaticcontainerdocks,whichcanfinish allthework withoutmanpower.2) Making full use of spaceWith the development of the economy, the value of land, especially land in cities, becomes higherand higher.Therefore, it is uneconomical for a port to depend only on the expansion of land to acquiremore space.Furthermore, expansion does not comply with the idea of sustainable development. Onthe other hand, if the port extends the plane areas, the distance of the interflow will be lengthened andaccordingly needless haulage will become a non-value-added activity.3)Theprincipleof safetyIn the internal logistics of port enterprises, because of the high traffic volumes, the port shouldplace more stress on safety problems. Therefore, machines for haulage, stevedoring and stacking andstorage should be equipped with safeguards, and the port should do its best to separate the passengersfrom the interflow of logistics.4) Arrange the routes of logisticsIf the situation permits, all the routes of the internal logistics of port enterprises should be arrangedin straight line, reducing of unnecessary turnarounds. For example, when the port arranges the routesfor stacking in large areas, a route can be cut through the middle in order to avoid the detours in thelogistics on the port.5) Increasing the units of haulage and stevedoring
In the management of port enterprises, in order to promote work efficiency, reduce operating costs, improve service and increase economic efficiency, the method of achieving the rationalization of the internal logistics is an issue that deserves better study. The rationalization of the internal logistics of port enterprises is a complicated and systematic task. However, with improved study, we can abstract some principles that we can employ to optimize the internal logistics of port enterprises. 1) Improving the standard of mechanization Effective methods of mechanization should be adopted as much as possible for those situations which are labor intensive, require frequent haulage and stevedoring, contain difficult working conditions and repetition. For example, in some modern ports, when the level of mechanization and automation is much improved, the need for manpower is reduced to a minimum. Another example is in the automation – oriented system for haulage on the fully automatic container docks, which can finish all the work without manpower. 2) Making full use of space With the development of the economy, the value of land, especially land in cities, becomes higher and higher. Therefore, it is uneconomical for a port to depend only on the expansion of land to acquire more space. Furthermore, expansion does not comply with the idea of sustainable development. On the other hand, if the port extends the plane areas, the distance of the interflow will be lengthened and accordingly needless haulage will become a non-value-added activity. 3) The principle of safety In the internal logistics of port enterprises, because of the high traffic volumes, the port should place more stress on safety problems. Therefore, machines for haulage, stevedoring and stacking and storage should be equipped with safeguards, and the port should do its best to separate the passengers from the interflow of logistics. 4) Arrange the routes of logistics If the situation permits, all the routes of the internal logistics of port enterprises should be arranged in straight line, reducing of unnecessary turnarounds. For example, when the port arranges the routes for stacking in large areas, a route can be cut through the middle in order to avoid the detours in the logistics on the port. 5) Increasing the units of haulage and stevedoring
In order to improve the efficiency of haulage, stevedoring and stacking as well as to promote thelevel of mechanization and automation, the units of haulage and stevedoring should be increased asmuch as possible,accordingtothecapacity oftheequipment.The stock,truck and containerbag,forexample,can beused asunits.Nowadays, containers areamain trend inlogistics,moreover,there isincreased interest in hanging equipment with double trucks.6) Improving mobilityThe magnitude of motility in moving cargoes reflects the degree of logistics'rationalization. Wecanadoptthemethod of“motilityindex(O--4)toevaluatethemotilityof logistics,whichisshowedon Form I .For the rationalization of the internal logistics of port enterprises, we should providecargoeswithahighmotilityindexForml (therelationship ofmotility and indexfor the internal logistics of port enterprises)Cargoes motility inMotility indexCargoes support statemovementManpower haulage one by0Direct stackingoneManpower haulage,1Stacking on containersmachines are inconvenientHaulage by machines is2Stacking on stocksconvenient3Stacking on trucksNo need for other machinesCargoes are in a state of4Stacking on Transport machinesmovement7)The ABC taxonomyfor arranging cargoes in the warehouseThe ABC taxonomy classifies the cargoes according to their frequency,quantity and weight. In thisarrangement, those “A"” cargoes, which are in and out of the warehouses frequently and, in largequantity and with heavy weight, should have convenient access. This kind of arrangement caneffectivelyreducetheaveragehaulage8)Usinggravitytoreduceextraweight
In order to improve the efficiency of haulage, stevedoring and stacking as well as to promote the level of mechanization and automation, the units of haulage and stevedoring should be increased as much as possible, according to the capacity of the equipment. The stock, truck and container bag, for example, can be used as units. Nowadays, containers are a main trend in logistics; moreover, there is increased interest in hanging equipment with double trucks. 6) Improving mobility The magnitude of motility in moving cargoes reflects the degree of logistics' rationalization. We can adopt the method of “motility index” (0-4)to evaluate the motility of logistics, which is showed on Form I .For the rationalization of the internal logistics of port enterprises, we should provide cargoes with a high motility index. Form1 (the relationship of motility and index for the internal logistics of port enterprises) Cargoes support state Motility index Cargoes motility in movement Direct stacking 0 Manpower haulage one by one Stacking on containers 1 Manpower haulage, machines are inconvenient Stacking on stocks 2 Haulage by machines is convenient Stacking on trucks 3 No need for other machines Stacking on Transport machines 4 Cargoes are in a state of movement 7) The ABC taxonomy for arranging cargoes in the warehouse The ABC taxonomy classifies the cargoes according to their frequency, quantity and weight. In this arrangement, those “A” cargoes, which are in and out of the warehouses frequently and, in large quantity and with heavy weight, should have convenient access. This kind of arrangement can effectively reduce the average haulage. 8) Using gravity to reduce extra weight
In hauling, stevedoring and stacking the cargoes, we should try our best to make use of the cargoes'own weight to save energy and investment.For example, we can load by taking advantages of suchfactors as location and gravity. First considering the issue of safety in hauling, stevedoring andstacking, we should endeavor to reduce the weight of extra equipment and the weight of packing9) Balancing and harmonizing all the linksIn the internal logistics of port enterprises, we should harmonize all the movements of cargoes.Therefore, we should examine weak links to strengthen the logistics system.10)Reducing connectingtimesIn the process of the internal logistics of port enterprises, we should reduce connecting times butincrease continuous work.Fork-lift trucks, for example, can reduce the primary connecting process inhaulage and stacking.11) Supplying the right logistics serviceThe ideal logistics service should met the six Rs: right quality, right quantity ,right time, rightplace,right impression and right price. Service standards include, service reliability, waiting time fortransportation, immediate port services, and for haulage, stevedoring and stacking, extending servicesand free services, etc.12) Reducing logistic coatsAccording to the range of logistics, the costs can be divided into the costs of transportation by theport instead of the client, the costs of inner-port logistics, the costs of distribution logistics, and thecosts of garbage logistics, etc. According to the payment form of logistics, the costs can be dividedinto the coats for cargo circulation (including packing, haulage, storing, stevedoring and distribution,etc),the costs for information circulation and the costs for logistic management. Reduction of thelogistic costs and improvesthe economic capacities if logistics byvalue analysis13) Automation and Strategy in logisticsAutomation and strategy are important in the advanced stages of the technological development oflogistics. The process of logistics involves many issues in planning and decision-making. Forexample, the solution to problems of storage levels, the selection of transportation(haulage)routes, thecontrol of themovementtrack and operation of self-directedtracks,themovement of self-selectedmachines and the management of logistic distribution should employ the technology for automationand strategic planning. The Container Dock of the Singapore harbor has achieved auto-oration andstrategy in the logistic system , and serves a good example for other ports
In hauling, stevedoring and stacking the cargoes, we should try our best to make use of the cargoes' own weight to save energy and investment. For example, we can load by taking advantages of such factors as location and gravity. First considering the issue of safety in hauling, stevedoring and stacking, we should endeavor to reduce the weight of extra equipment and the weight of packing. 9) Balancing and harmonizing all the links In the internal logistics of port enterprises, we should harmonize all the movements of cargoes. Therefore, we should examine weak links to strengthen the logistics system. 10) Reducing connecting times In the process of the internal logistics of port enterprises, we should reduce connecting times but increase continuous work. Fork-lift trucks, for example, can reduce the primary connecting process in haulage and stacking. 11) Supplying the right logistics service The ideal logistics service should met the six Rs: right quality, right quantity , right time , right place , right impression and right price. Service standards include; service reliability, waiting time for transportation, immediate port services, and for haulage, stevedoring and stacking, extending services and free services, etc. 12) Reducing logistic coats According to the range of logistics, the costs can be divided into the costs of transportation by the port instead of the client, the costs of inner-port logistics, the costs of distribution logistics, and the costs of garbage logistics, etc. According to the payment form of logistics, the costs can be divided into the coats for cargo circulation (including packing, haulage, storing, stevedoring and distribution, etc), the costs for information circulation and the costs for logistic management. Reduction of the logistic costs and improves the economic capacities if logistics by value analysis. 13) Automation and Strategy in logistics Automation and strategy are important in the advanced stages of the technological development of logistics. The process of logistics involves many issues in planning and decision-making. For example，the solution to problems of storage levels, the selection of transportation(haulage)routes, the control of the movement track and operation of self-directed tracks, the movement of self-selected machines and the management of logistic distribution should employ the technology for automation and strategic planning. The Container Dock of the Singapore harbor has achieved auto-oration and strategy in the logistic system , and serves a good example for other ports
14) Flexibility for the internal logistics of port enterprisesThe principleofflexibility comes from production, wheredifferent products are made to meetdifferent needs. The flexible principle for the internal logistics of port enterprises is effectivemanagement ofthelogistics,whichhasvariouscargoes,smallbatch,manytickets and short periodsof time,according tothe requirements of cargoes owners and the carriers.However,theeffectivefulfillment of these requirements is a hard knot in the optimization ofthe internal logistics of portenterprises.15)Management of the supply chainThe apply chain means the full range of activities and processes in supplying products or servicesto the final consumer. In the light of this definition, the supply chain of the internal logistics of portenterprises should be the interdependent relationship in all the logistical links. However, the logisticallinks are often broken by man-made factors, resulting in unsuccessful cooperation. At the port, thesupply chain has two meanings; first, an effective supply chain should be built between all the relatedorganizations(such as every company of the harbor bureau, one custom and three safety checks, theship company and the owner of the cargo) in the internal logistics of port enterprises; Second, theeffective cooperation between the inner-departments which are related to logistics.4ConclusionSystematic studies on theinternal logisticsofportenterprisesare still not enough.However,withthe rapid development of social logistics in our country,the partial rationalization of the port logisticswhich is an important link in the social logistics, will attract more and more attention. I expect moreexchangesandcommunicationonthis subject,hopingtopromotefurtherstudyandpracticeontheinternal logistics of enterprises.References:(1) Richard B. Chase, Production and Operation Management-Manufacturing and ServiceMcGraw-Hill, 1998.(2) Zhen Hong, Storage Operation and Management. NanHai Publishing Company, 1996(3) Zhen Hong, Port Management. China Communications Press, 2003.(4) Ding Lixin, The Pmject of logistic System, Tsinghua University Press, 2000
14) Flexibility for the internal logistics of port enterprises The principle of flexibility comes from production，where different products are made to meet different needs. The flexible principle for the internal logistics of port enterprises is effective management of the logistics, which has various cargoes，small batch, many tickets and short periods of time， according to the requirements of cargoes owners and the carriers. However, the effective fulfillment of these requirements is a hard knot in the optimization of the internal logistics of port enterprises. 15) Management of the supply chain The apply chain means the full range of activities and processes in supplying products or services to the final consumer. In the light of this definition，the supply chain of the internal logistics of port enterprises should be the interdependent relationship in all the logistical links. However, the logistical links are often broken by man-made factors, resulting in unsuccessful cooperation. At the port, the supply chain has two meanings; first, an effective supply chain should be built between all the related organizations(such as every company of the harbor bureau，one custom and three safety checks, the ship company and the owner of the cargo) in the internal logistics of port enterprises; Second, the effective cooperation between the inner-departments which are related to logistics. 4 Conclusion Systematic studies on the internal logistics of port enterprises are still not enough. However, with the rapid development of social logistics in our country, the partial rationalization of the port logistics, which is an important link in the social logistics, will attract more and more attention. I expect more exchanges and communication on this subject, hoping to promote further study and practice on the internal logistics of enterprises. References: (1) Richard B. Chase, Production and Operation Management-Manufacturing and Service. McGraw-Hill, 1998. (2) Zhen Hong, Storage Operation and Management. NanHai Publishing Company, 1996. ( 3 ) Zhen Hong, Port Management. China Communications Press, 2003. (4) Ding Lixin, The Pmject of logistic System, Tsinghua University Press, 2000