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    THẠC SĨ Governing Logistics Information Platforms

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  6. Governing Logistics Information Platforms

    LUẬN VĂN THẠC SỸ
    NĂM 2014


    3

    Summary

    The Extended Single Window (ESW) project aims to support goods flows by Information and
    Communication Technology (ICT). Specifically, the project takes the concept of Single Windows (often
    used in the sense that governments offer a single portal or interface to which businesses can submit
    information, supporting re-ruse by multiple agencies and coordination of government activities) and includes
    the business side; creating an Extended Single Window. An Extended Single Window includes business
    information systems and platforms and supports the re-use of business data, both for supporting new
    business applications and for making it easier to connect to government single windows.

    The project is not alone in this ambition. For example, in the FP7 project CASSANDRA, funded by
    the European Commission, the concept of a data pipeline was developed and put to practice in various
    international trade lanes comprising four continents in total. Within the Netherlands, the national initiative to
    support innovations in logistics (Topsector Logistics) yielded the development of a Neutral Logistics
    Information Platform (NLIP, see www.nlip.org). This platform aimed to support information exchange in
    international supply chains. Similar to ESW, the starting point in the NLIP were the Port Community
    Systems (PCSs) in main ports in the Netherlands, and build from there. Given the similarities, ESW has been
    heavily impacted by the development of NLIP and much of the material in this report is in the context of the
    NLIP concept and programme.

    However, be it a data pipeline, an Extended single window, or a logistics information platform, one
    of the pressing issues of these ICTs for information exchange in the international supply chain is the issue of
    governance. Governance primarily concerns what kind of decision structures are needed, for example on the
    process of agreeing on data ownership, the selection of standards, and the funding structures. What
    incentives can be created to have parties adopt it, and who should provide these incentives? Is value added
    functionality an option? If so, what kind of functionality; only for parties that agree to it and have a role in it,
    or can it actually be part of the funding structure? That makes the question for data ownership, and cost- and
    benefit distribution even greater. There are several configuration options for global information sharing
    ’system-of-systems’. For example, commercial platform providers could each offer commercial solutions,
    the adoption of which would benefit the supply chains using it because all of the platforms adhere to a
    similar standard for supporting compliance (Bharosa, Klievink, Janssen, & Tan, n.d.).

    Apart from the commercial platforms of global IT solution providers, one of the most realistic
    developments paths is to have national platforms as main hubs, or ‘landing places’, connecting the complex
    4

    logistical processes and stakeholder setting of port environments to the international trade flows,
    information-wise that is. In this report, we analyse the route towards a national information platform. To
    ensure our analysis is rooted in empirical material, as a case study we picked a specific Port Community
    System (PCS) as one of the building blocks of the national information platform.
    The case study comprises three parts, of which the key findings are:
     As the NLIP/ESW is all about value-added functionalities for the sector as a whole by making
    smart combinations of data, we study three value-added services of the PCS. These three services (cargo
    information, inland manifest and discrepancy list) illustrate the role of a community system in bringing
    together a multitude of parties that are all independent but come together in specific trade lanes where the
    actions and information of one affect those of others.
     We analyse the role of the system in an export process. We find that this is largely community
    functionality that is needed for (the parties in) a port to efficiently operate in a competitive international
    environment. Our analysis shows how this kind of core functionality generates a steady stream of key
    data, both public and private, that is necessary to make the above-mentioned value-added service
    possible. These are often public-private combinations, with often one of more stakeholders that (more)
    directly benefit from these functionalities, but do require others to contribute (that benefit less or not). A
    major area for decision making that follows from this analysis is that for a NLIP/ESW, decisions need to
    be made on which functionalities are permissible and which data may be used for them (i.e. can data that
    have been provided for community functionality be re-used for value-added services?). This is also
    related to the issue of data ownership and any rights or permissions a custodian of data may have.
     Third, we analyse the role of the system in an import process. Again, this is core
    functionality, needed by parties involved in importing goods, whether they are involved in the logistics
    (handling in the port and hinterland transport), the trade lane (e.g. as a buyer or re-seller of the goods), or
    as an inspection agency (e.g. Customs, food and product safety). In this situation, the ‘cargo information’
    service (described as part of step one) offers functionality for various parties involved. However, our
    analysis shows that this also yields a debate on the pricing of such a service, as well as the cost
    distribution. A major area for decision making that follows from this, is that of decisions on the finance
    structure of the system as a whole (e.g. which services are considered community functionality and how
    to fund that) and of individual services that need to be decided on at the community-level (e.g. how are
    costs and/or benefits distributed among parties that are involved in the service).

    From the interviews we learn that stakeholders have multiple perspectives regarding the decisions at
    the community system level. Though NLIP/ESW is basically a federated system, the abovementioned
    aspects and areas for decision making transcend the level that individual actors can make decisions on. As
    5

    NLIP/ESW brings multiple communities (e.g. the community in a specific port or in a specific sector)
    together, these areas also transcend the level of communities that have existing collaborations at the
    community level. Dealing with these aspects requires processes or structures for collaboration among
    stakeholders for agenda setting and decision-making. We argue that this situation can be dealt with by
    developing a structure (e.g. an institutionalised process, potentially with stakeholder participation) for
    deciding on these issues in a way that makes the decisions and the process transparent to the stakeholders.
    Also, the structure needs to accommodate that stakeholders can raise issues, are heard, and committed to the
    outcomes. This actor-related complexity is the area of governance of NLIP/ESW, the topic of work package
    3 in the ESW project, of which this is the final report.

    When assessing the current governance related to NLIP/ESW, it becomes clear that currently much
    of the actor-complexity is funnelled on the technical complexity. In other words; the technical arrangement
    have to accommodate not only the technical complexity but also the positions and interests of the
    stakeholders that were involved in the development phase. Further adding to the complexity is that the types
    of operations and information exchanges that the NLIP/ESW should support are highly diverse, if it were to
    act as a national platform and pipeline ‘landing place’. This complexity cannot only be dealt with by
    technical solutions, further emphasising the need for solutions in the area of governance. Currently, many
    governance-related issues are discussed and decided on in a temporary collaboration structure (ESW is a
    project and NLIP could also be considered a project, or a programme covering multiple projects). Some
    issues that stakeholders encounter may seem operational or technical problems, but at the core these revolve
    around deciding what NLIP/ESW may do, aims to do, how it does that, and who pays for what.

    Our study finds that for the next step in the development of NLIP/ESW, a long-term basis for proper
    decision-making needs to be developed, also internationally. This basis entails that there be a structure and
    decision making processes that are able to ensure effective and efficient decision making regarding those
    aspects that transcend the level of individual actors (Veeneman, Ten Heuvelhof, De Bruijn, & Saanen,
    2011). Parts of this structure are already in place in the existing NLIP/ESW programme, but its temporary
    ‘project’ basis is likely to be too permissive to be able to make decisions without risking a long, dragging
    process of strategic behaviour and negotiations. Also, the governance structures of the existing NLIP/ESW
    components (i.e. the PCSs) do work with representation of various stakeholder communities, but our
    research suggests that parties that are not involved directly (including parties that have representation) do not
    have a clear understanding of how decisions were made.

    6

    Contents


    1. Introduction 7

    2. Background 10
    2.1. Information infrastructures for trade 10
    2.2. The governance challenge 12
    2.3. The Role of Port Community Systems 13

    3. Approach 16

    4. Cases 18
    4.1. Data combinations for value-added services 18
    4.2. Role of PCS in export processes 22
    4.3. Role of PCS in import processes (Frugiventa Case) 24

    5. Findings from the cases 35

    6. Governance of ESW 39
    6.1. The NLIP governance design 39
    6.2. Analysis of the NLIP governance design 41

    7. Conclusion 46

    Acknowledgements 48
    References 49


    7

    1
    Introduction


    Developments like outsourcing, consolidation, and fragmented transport chains have complicated the
    organisation, control and supervision of trade flows (Hesketh, 2010). Furthermore, managing information
    and data in these logistics chains has become a huge challenge. The best (because original and correct)
    information on international goods flows is present in the information systems of the various actors involved
    in international trade. ICT innovations enable electronic connections and information exchange between
    these systems and thereby access and re-use of these original trade data by other actors in the supply chain
    (Tan, Bjørn-Andersen, Klein, & Rukanova, 2011). The systems of supply chain partners can be



    interconnected in inter-organisational systems and jointly form international information platforms for
    international trade. Through these platforms, data can be shared among supply chain partners and with
    government. These platforms can greatly enhance the visibility on and control over the supply chain,
    specifically for the parties with an interest in the goods themselves: buyers, sellers and government
    inspection agencies (e.g. customs, food- and product safety) (Klievink et al., 2012). This type of innovation
    is key to making today’s international trade more efficient and secure.

    These developments can be considered as a re-arrangement of the information infrastructure in
    international trade. Information infrastructures are heterogeneous sociotechnical systems: systems that
    involve both complex (physical) technical systems and networks of interdependent actors (Hanseth &
    Lyytinen, 2010; Tilson, Lyytinen, & Sørensen, 2010). Information infrastructures in international trade thus
    comprises the evolution and dynamics of existing information systems of supply chain actors, existing
    processes and procedures, and all the diversity in systems and relationships present therein (Hanseth &
    Lyytinen, 2010; Hanseth, Monteiro, & Hatling, 1996; Henningsson & Henriksen, 2011; Tilson et al., 2010).
    Over the past few years, multiple initiatives have been undertaken to connect systems from all over the globe
    to each other in a standardized way, to capture data from their original source and to facilitate the exchange
    of data. Two notable developments in this regard are:
     The concept of international data pipelines, linking buyers and sellers at either end of a supply
    chain through a series of integrated commercial and logistics systems (Klievink et al., 2012), and;
    8

     The development of so-called extended single-windows and national information platforms,
    in which the hinterland and other trade-related sources are connected to (port-oriented) information
    platforms for international trade. In the domain of international trade, a Single Window refers to a
    “collaborative platform where trade-related information and documents need only be submitted once at
    a single entry point to fulfil all import, export, and transit-related regulatory requirements” (Keretho &
    Pikart, 2013).

    The Extended Single Window (ESW) project aims to support goods flows by taking the concept of
    Single Windows (often used in the sense that governments offer a single portal or interface to which
    businesses can submit information, supporting re-ruse by multiple agencies and coordination of government
    activities) and includes the business side; creating an Extended Single Window. An Extended Single
    Window includes business information systems and platforms and supports the re-use of business data, both
    for supporting new business applications and for making it easier to connect to government single windows.
    This is a key element as international trade has substantive risks involved due to which border management
    and safety inspections have increased in complexity, and can cause time delays, cost increases, and
    negatively impact the competitiveness of supply chains (Holloway, 2010).

    The information provisioning by the trade community towards government agencies has been a focal
    point for port communities for some decades. In many ports, port community systems (PCSs) exist. A PCS is
    an inter-organisational information system to improve the quality of information exchange within a
    (geographically concentrated) community, often in order to improve the community’s competitive position
    (Romochkina, 2011; van Baalen, Zuidwijk, & van Nunen, 2009). Government organisations were often
    consulted or even involved in initiating these port community systems, as making combinations of data from
    multiple parties is vital for creating information that is valuable in the interactions between businesses and
    government (Romochkina, 2011). These PCSs form the basic building block for both international data
    pipelines and for extended single windows (or localised logistics information platforms, therefore from now
    on we also use the term NLIP/ESW). For pipelines, PCSs can serve as the ‘landing place’ where various data
    pipelines rejoin the physical goods flows. For NLIP/ESW, the data, functionality and user base already
    presented by the PCS offers a promising route for developing such a new system-of-systems.

    Within a port environment these PCSs are central information hubs that offer complementary
    services to a port community as a whole, which are their main differentiator from the information systems of
    large businesses in the same community, such as terminal operators (Romochkina, 2011). Hence, apart from
    the system itself, the governance, shareholder structure and financing are key elements defining a PCS
    9

    (EPCSA, 2011). However, these governance structures cannot be transferred to the level of NLIP/ESW
    without question. Different communities are included, the public/private balance differs, and decision and
    funding structures are lacking. Therefore, in this report, we study a PCS in order to explore the topics that
    are or should be the locus of governance for NLIP/ESW and other new ICTs that aim to combine a public
    role, a community function and business value.

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