MIS 524 Winter 2005

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MIS 524 / Winter 2005
PSA The Worlds Port of Call
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Team Members
Jonathan Drew Kenny Dusseau Michelle
Pomeroy Chris Sprow Tim Taylor
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Agenda

• PSA Introduction Tim Taylor
• Operations and IT systems Kenny Dusseau
• Porters Five Forces Analysis Michelle Pomeroy
• Value Chain Analysis Jonathan Drew

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Company Description
What is PSA?.
Port of Singapore Authority
The Port of Singapore Authority was founded 1964
to

• administer the Port of Singapore
• provide port services and facilities
• regulate and control navigation of port waters
• promote the use of port by all members of the
  shipping community

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PSA Owners and Structure
1964 - 1974 Owned by the Singapore
Government - Ran as a statutory board of
Singapore government 1974 - 1997 Owned by
Temasek Holdings Ltd. - Temasek Holding is
wholly owned by Singapore 1997 - 2000 PSA
Corporation created as a private entity. -
Owned by Temasek Holdings Ltd.. 2000 Portnet.co
m was formed as a wholly owned subsidiary of
PSA - Temasek Holding began preparations for
IPO
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Location Benefits
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Transshipment Port
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Transshipment Port
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Singapore Today
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The Role of Singapore

• Limited land, sea space and people
• Focus on becoming a developed country
• Infrastructure improvement
• Tax incentives, low-cost labor to draw MNCs
• Entrepreneurial spirit style
• Venture capitalist (Temasek Holdings)
• Manufacturing - Financial services
• Transportation - Trading
• Banking - Shipbuilding

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Singapores Restrictions

• Singapore doesnt have a lot of land to store
  cargo
• Containers must be stacked up to 9 high (no
  other port does this)
• Full-employment economy with limited labor
  market

Due in 3 days
Due Tomorrow
Due in 2 days
Due Today
Due NOW!!
Due Today
Due Today
Due Today
Due Tomorrow
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The PSA System
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PSA Improvements

• Faster, wider, larger cranes
• Remote control operators for yard cranes
• CITOS container management system
• Pre-arrival (guaranteed berth),
  loading/unloading/storage, Flow-Through Gate
• PORTNET

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The Portnet System
Terminal Operating Systems
Port Authority
Shipping Lines
Shippers
TradeNet
PortNet
Haulers / Truckers
Customs
Trade Board
Marine Service Providers
Freight Forwarders
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People Development

• Significant investment in personnel development
• 5 of payroll spent on training on technical
  business skills
• Multiple training programs to instill core values
• Customer focus Teamwork
• Innovation Communication
• Major productivity improvements

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PSA Results
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PSA International Ports
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Porters Five Economic Forces
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Competitive Rivalry Port

• There are 5 major port operators that manage 25
  of the container handling market
• Scale of container traffic worldwide focused in
  East Asia and Europe

• PSAs major rivals have some advantages in scope
• PO has a 50 JV with a major container vessel
  company
• Hutchison works outside container ports
• Increasing competition from regional operations

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Competitive Rivalry Software

• Internet Portals
• Allows for B2B communications currently available
  from Gtnexus and INTTRA.
• Internet Logistics Companies
• All encompassing software packages that provide
  cargo management similar to eMart by PSA

• Software ASP Providers
• Competition currently offers good packages in
  either software or ASP
• Terminal Operators
• Similar products are currently available in the
  marketplace by companies such as Cosmos.

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Threats
New Entrants

• Other transshipment hubs / terminal operators
• Software ASP providers
• Logistics companies
• Port Care Services
• Internet Portals

Substitutes

• Currently, PSA offers a package solution through
  their PORTNET software which other companies in
  the shipping industry have not yet been able to
  offer.

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Bargaining Power
Customers

• High volume from major customers
• Risk of customers integrating backwards and
  pulling volumes from PSA

Suppliers

• PSA is a service based organization where the
  only input they deal with is the shipping
  containers.

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Value Chain
Firm Infrastructure
Information Infrastructure
Technology Development
Human Resource Management
Operating Managing Ports
Core Operating Activities
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Value Chain
Firm Infrastructure
Information Infrastructure
Technology Development
Human Resource Management
Core Operating Activities
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Value Chain Analysis

• PORTNET
• 12 hour advanced notice on arriving ships
  (relevant information) via PORTNET
• Sailing schedule
• Cargo
• Special Requirements

• CITOS
• Container management system
• Minimized waiting time
• Optimized container storage
• Managed container handling during loading,
  unloading and storage

FLOW-THROUGH GATE PROCESS
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Strategic Direction
Extend Enter new line of business and / or add
new business models.
Enhance Add functionality or features to current
product / service offerings or improve
performance of existing business.
Expand Add new product / service offerings or
enter new geographic markets.
Exit Exit a business or market or drop a
product/ service offering.
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Value Chain
Firm Infrastructure
Information Infrastructure
Technology Development
Human Resource Management
Operating Managing Ports
Core Operating Activities
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Value Chain
Firm Infrastructure
Information Infrastructure
Technology Development
Human Resource Management
Operating Managing Ports
Core Operating Activities

• Economies of Scope

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Value Chain
Firm Infrastructure
Information Infrastructure
Technology Development
Human Resource Management
Operating Managing Ports
Core Operating Activities

• Partner with shipping / trucking lines

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Value Chain
Firm Infrastructure
Information Infrastructure
Technology Development
Human Resource Management
Operating Managing Ports
Core Operating Activities
Port Operations Solutions
e-Business Solutions
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Value Chain
Port Operations Solutions

• Consulting Services
• PSA Port Care Service
• Keppel Distripark
• PSA BoxCare
• PSA ReeferCare
• PSA ProCare
• PSA ChemCare

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Value Chain
e-Business Solutions

• Portnet.com
• P-Commerce
• eMart
• eSolutions
• CITOS
• GEMS
• Infohub

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Analysis Summary

• Strong competition from other ports and software
  providers.
• Relatively easy entry into market.
• Value chain was expanded from infrastructure
  provider only to include other products and
  services.
• PSA is in a good position but needs to be
  flexible and aggressive to maintain market share.

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IPO challenges and Benefits
The Singapore Government has a privatization
strategy where companies will pursue an IPO as
soon as it was deemed that they could attract
shareholders and raise capital to support a
growth strategy.
Advantages
Disadvantages
1. Easy to raise capital and expand. 2. More
flexibility to meet customers needs. 3. Less
restrictions and tax benefits.
1. Hostile Take-over are possible. 2. Less
Flexibility. 3. Slower decisions (more
Red-tape).
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Team Recommendations

• Aggressively pursue port management, software
  contracts, and consulting agreements.
• Fits in with PSA core values and Mission
  statement.
• Corporate structure recommendations
• Stronger corporate and financial oversight.
• Enhance the networked organization.
• Fund RD projects for further software and IT
  advancements.
• Maintain a technology advantage over competitors.

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Questions?