What is involved in port quality management?
There are still many ports, in many diverse locations, where incoming goods are subject to highly uncertain handling schedules by the different stakeholders involved in operations, making it difficult to foresee when such goods will be ultimately delivered. Today’s supply chains are increasingly complex, production requires a higher number of intermediate product exchanges on a global scale, and industrial and delivery companies require lower inventory levels due to the difficulties in securing working capital to support sale stocks. This has started a growing trend for companies to improve the service quality of their supply chains. Numerous recent studies have shown that importers, exporters and global logistics operators place a greater value on logistics reliability than on cost to serve or on total transit time.
Ports have therefore become the unquestioned hot spots in logistics and international cargo transport. The impact of their logistics competitiveness on the companies they serve within their hinterland is high, and therefore, it is increasingly essential that they can secure the necessary tools to monitor and improve competitiveness and efficiency. In many new port developments, it has become clear that infrastructure capacity expansions and the introduction of higher automation must go hand-in-hand with the correct tools allowing significant process improvement in order to fully contribute to the port’s service quality improvement.
The maritime business consultancy team at ALG is very familiar with the challenges that Port Authorities are increasingly facing in such developments. For this reason, our professionals do not hesitate to place reliability and trust as the top priorities when supporting our clients in port quality management undertakings.
The answer: the Port Quality Label
The Quality Label is a Port Authority-led programme through which service Quality Commitments or “quality guarantees” are offered, based on the fulfilment of quality standards: time to serve, operational reliability, safety, awareness, etc. These commitments are aimed at the port’s end-users (importers, exporters and shipping lines) and constitute a piece of added value in its product and service portfolio towards these end-users. Moreover, it makes the port more attractive and contributes to its ability to attract both traffic and company bases in its hinterland, which can leverage the port’s logistics assets.
To do so, mechanisms shall be created in the port in order to enable monitoring of the compliance with the quality standards, optimisation, streamlining of the processes and continuous improvement. Likewise, a Quality Committee shall be created in order to manage the involvement of the Port Community in the Quality Management System and the improvements to be implemented. This committee supports reviewing the state of the port’s processes and services, discussing areas for improvement, assessing possible solutions and defining and ultimately supervising the key improvement actions, whose completion is carried out and managed by the Port Authority.
The Quality Label, besides being a programme focused on ports’ service improvement, is also a marketing tool. It also stands as a meeting point for debate in the Port Community, in which to look for and analyse solutions, process improvement opportunities and information management systems bringing together different stakeholders in the port logistics value chain (customs, logistics operators, port terminals, shipping lines, etc.). On many occasions, the label’s real value does not necessarily reside in the service quality commitments, as it does in the improvements of processes and of the information systems they rely on. These are responsible for a significant boost in logistics and port service effectiveness and efficiency, and are achieved with the agreement of the port community, united under the brand’s umbrella.
¿How does a quality management programme really work?
In order to meet the Quality Commitments for the port users, internal procedures of the process/service need to achieve some adequate time and compliance levels. These levels are defined by the Quality Standards Commitments. These commitments are defined by agent type within the port community. On the other hand, Quality Commitments incorporate a system of Quality Indicators. These indicators are split into two categories:
- Service Quality Indicators which measure levels of compliance with Quality Commitments or global processes
- Process or Activity indicators, which measure sub-processes or specific activities, and impact Quality service indicators.
IT systems and CRMs have helped considerably to solve many relevant issues in facilities that follow best practice procedures. However, the key to success for performance improvement models is getting both blue and white collar workers involved by informing them face to face as soon as these changes are implemented. Moreover, both public and private stakeholders need to be engaged and aware of their performance standards, in order to meet the end consumer’s expectations.
ALG is currently exploring the underpinnings of this transformational value proposition through its support to Port Authorities in designing and implementing processes to monitor cargo handling and management in ports, and in producing and implementing indicators to measure service quality.