FMC Supply Chain Innovation Teams Interim Status Report

Executive Summary
December 6, 2016

The Teamwork and Process Innovation Approach

On February 1, 2016, The Federal Maritime Commission (Commission) issued an Order directing Commissioner Rebecca Dye to engage leaders from commercial sectors of the U.S. international supply chain in discussions to identify commercial solutions to U.S. supply chain operational challenges. The Supply Chain Innovation Teams initiative initially focused on the import leg of international trade, through the largest U.S. ports of Los Angeles, Long Beach, and New York/New Jersey.

Under the Commission Order, Commissioner Dye convened three teams of industry leaders to develop process innovations that would enhance supply chain reliability and resilience. Each of the three teams was composed of roughly 12 members and included representative supply chain actors, including public port authorities, marine terminal operators, beneficial cargo owners, ocean transportation intermediaries, liner shipping companies, drayage trucking companies, longshore labor representatives, rail officials and chassis providers.

The Supply Chain Teams approach is built on two fundamental concepts: innovation and teamwork. Innovation springs from creative engagement among committed individuals. Teams provide the opportunity for this interaction, in candid give-and-take sessions.

During the project design phase and continuing over the course of the project, Commissioner Dye consulted a variety of academic and business experts in supply chain management, process innovation, transportation research and the use of business teams.

By April, the Commission had assigned 34 industry leaders to three teams. The teams began meeting at the initiative launch on May 3rd and 4th in Washington, D.C. The Supply Chain Teams were encouraged to “step out of their silos” and consider the international supply chain from an overall “systemic” perspective.

At the May meeting, the Supply Chain Teams were directed to identify one innovative supply chain process improvement and develop a plan to implement that improvement. In response, all three teams determined that improved supply chain visibilitywould be their central focus.

National Information Portal to Integrate the Supply Chain

The Supply Chain Teams agreed that the availability of timely and accurate critical information is needed to achieve enhanced visibility and promote supply chain systems efficiency. For that reason, identifying each supply chain actor’s unmet “critical information” needs became the primary focus of their discussions.

Similarly, each Supply Chain Team determined that timely access by all supply chain actors to relevant critical information via a national portal would be their overall goal. They referred to information technology as “the new infrastructure.” The teams deliberated on how to provide the right information, to the right person, at the right time, in order to more fully integrate and harmonize the supply chain system.

The Teams used “critical information grids” to structure their discussions. Later discussions occurred in sub-groups of supply chain actors to resolve particular operational challenges that interfered with effective communication of the right information at the right time.

Based upon those discussions and negotiations, by mid-October, the teams had developed lists of: (a) the critical information/data needs of the various actors; (b) likely sources of that information; (c) timing requirements; and (d) the expected operational improvements that likely would result from access to that critical information.

The teams’ consensus tentatively concluded Phase One of the Supply Chain Initiative, and provided a basis for Phase Two of the Supply Chain Innovation Project.

So, to date, Supply Chain Team members have produced detailed lists of the high-priority information needs of key supply chain actors – mainly dealing with port/marine terminal operations, such as container availability, chassis availability, and more efficient drayage trucking operations.

The availability of this critical information, developed in collaboration with other supply chain actors, would guide each supply chain actor to act in harmony with others. In this way, greater supply chain visibility would change behavior in ways that integrate the supply chain and produce improved reliability and resilience across the entire system.

As a collateral benefit from the Supply Chain Team work, but separate from the issue of developing a national information portal, certain team members continue to discuss ways to implement local supply chain improvements that were the subject of “critical information needs” discussions.

Phase Two of Supply Chain Innovation Initiative

During Phase Two of the Supply Chain Innovation Teams initiative:

Commissioner Dye will organize three “export” Supply Chain Innovation Teams, to begin meeting in early 2017;
Commissioner Dye will integrate warehouse executives into the initiative to provide supply chain visibility into warehouse operations;
Commissioner Dye continues to pursue options for the development of a robust conceptual model of a national portal for key supply chain information; and
Commissioner Dye will explore a maritime international supply chain Internship Program for the Federal Maritime Commission.

Select Bibliography

The books listed below were consulted in the preparation stage of what became the Supply Chain Innovation Teams initiative. They address maritime supply chain challenges and change leadership issues from a variety of perspectives. A full bibliography of articles on topics related to the project is provided at the end of this interim report.