Variability and unpredictability of arrival time of cargo during shipments can cause substantial economic losses for manufacturing companies in terms of brand image and unmet customer demand, especially during peak seasons or in correspondence of marketing campaigns. While these companies have learned to address risks that cause delays by inflating safety stocks and pipeline inventories, it still leads to increased capital tied up and storage costs for firms. Furthermore, uncertain arrival times makes operations for scheduling transport difficult to perform, hence increasing administrative processes and costs.
BSH Electrodomésticos España, S.A. is integrated in the international group BSH Hausgeräte GmbH; the third-largest household appliance manufacturer in the world and number one in Europe. BSH operates with numerous complex supply chains, and this Living Lab focuses on cargo made of households appliances manufactured at their own fabrics in China that is to be imported and distributed to BSH’s customers in Spain. The main objective of the BSH Living Lab is to improve the overall time-to-deliver reliability of cargo shipped from China (through the Port of Yantian) to Spain (through the Port of Barcelona). Part of the household appliances of BSH are packed into containers in China, transported by road to Yantian port and loaded on ships. The cargo arrives to the port of Barcelona where a T1 customs transit procedure is submitted, and thereafter, the cargo is moved by railway to the BSH warehouse in Zaragoza. Customs inspections, if deemed necessary, may take place directly at the BSH premises in Zaragoza.
We aim at developing a system for improved monitoring and traceability of BSH’s cargo through enhanced information exchange. The specific functionalities that are planned to be developed to accomplish this goal ensure a better visibility in the complex tracking operations and a mitigation of risks that affect the unexpected variability of the delivery time of their cargo:
Automated submission of customs documentation that will ensure prompt notifications of the customs inspections.
Monitoring of risks en-route that will inform on possible changes of route or unexpected stops caused by incidences such as extreme weather conditions or vessels’ breakdowns.
Monitoring and exchange of information related to Containers’ Estimated Time of Arrival (ETA) at port of destination and Intermediate Time of Arrival (ITA). The system will provide ETAs forecasting and automatic alerts in case of deviations to avoid manual checks.
Alerts about transshipment operations that improve a lack of communication between stakeholders and notifies BSH in case of delays caused by unavailability of personnel or handling machines in ports (e.g. strikes or breakdown of cranes).
Benefits can be seen both in operational and strategic terms. Operationally, it is expected that BSH’s situational awareness will be improved and thereby reduce costs and avoid redundant paperwork. Coordination of activities for controlling and planning between production, distribution, marketing and sales will be enhanced and with that the overall resilience capabilities of the company will improve. Strategically, enhanced resilience can make a difference in gaining market shares as the company will be able to offer a better service to its clients in terms of offering more precise information on availability of their products and providing more exact delivery times. The market of household appliances is expected to grow at a moderate rate within the next five years. Therefore, added value services will play a key role for keeping current customers satisfied and attracting new clients.
