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Application of Lean Enterprise to Improve Seaport Operations

Nicholas Loyd, Lauren C. Jennings, Jeff Siniard, Michael L. Spayd, Anthony Holden, and George Rittenhouse
This paper discusses the implementation of Lean Enterprise management, principles, and tools in seaport operations. The paper begins with an overview of the necessary management training, strategy, and structure necessary for the successful implementation of Lean Enterprise. An analysis of the appropriate Lean Enterprise tools to be applied in seaport operations is provided, and specic examples of the implementation of those tools at the Port of Mobile in Mobile, Alabama, are cited. The paper also investigates the importance of integrating Lean Enterprise concepts into support functions such as accounting, maintenance, and human resources to enhance overall port operations in a holistic manner. The paper concludes with a discussion of the keys to the successful implementation of Lean Enterprise and the issues relative to sustaining improvement efforts as well as suggestions for additional focuses of improvement for implementing Lean Enterprise in port operations.

issues, coupled with the signicant costs, lengthy timetables, and stakeholder groups with different or even competing objectives, are significant obstacles to providing additional port capacity in an expedient manner. Because of these constraints, methods that can be used to increase port capacity without a signicant investment in new resources are needed.

OVERVIEW OF LEAN ENTERPRISE AS AN IMPROVEMENT METHODOLOGY Lean Enterprise is a systematic approach to identifying and eliminating waste through the integration of technical tools and a continuous improvement culture (3). The concepts of Lean Enterprise were derived from the Toyota Production System (TPS), pioneered by Taichii Ohno and Shigeo Shingo. The objective of TPS is to reduce the time between the time when a customer places an order and the time when the company is paid by removing non-value-added activities or waste (4). Waste is any activity that does not add value to the product or service expected by the customer. Toyota identified seven categories of deadly waste that prevent the ability to add value (4): Defects, Overproduction, Waiting, Transportation, Inventory, Motion, and Excess processing.

Marine commerce plays a vital role in supporting economic development. The increase in the world population, the industrialization of nations, and a heavier reliance on world trade have accelerated the need for the efficient travel and transfer of goods between ships from overseas and domestic trucks, trains, and barges. In the United States, foreign trade accounted for about 22% of the gross domestic product in 2006, and approximately 95% of that foreign trade was moved by ship (1). This reliance on trade has increased port volumes by an average of 7% per year since 1990, and in 2003 an estimated $1 trillion worth of goods carried in more than 39 million 20-ft equivalent units (TEUs) moved through North American ports (2). Most major North American ports have not been able to increase their capacity as the demand for their services has risen; thus, it is estimated that most of these ports are operating near capacity and will start to show signicant capacity decits by 2010 (2). With some reports predicting that port volumes will double by 2020, the lack of port capacity will pose serious problems for maintaining the efficient movement of goods and facilitating a competitive economy. Increasing port capacity is a complex issue. Even if a sufficient dock capacity to load and unload ships exists, an efficient port relies on trucks navigating congested roadway networks, rail lines with limited capacity and expansion issues, and intricate logistics systems requiring the coordination of goods for global dispersion. These

Waste elimination is guided by ve basic principles set forth in the book Lean Thinking, by Womack and Jones (5): Specify value: identify what activities add value, Map the value stream: create a visual representation of all activities to identify wastes easily, Flow: products and services should move immediately between value-adding activities, Pull: customer demand should dictate the rate of ow, and Perfection: improvement should be continuous. To promote continuous improvement, Lean Enterprise uses several tools for training and implementation, many of which are applicable to seaports and are discussed in this paper. These tools are dened in more detail in Table 1 (311).
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University of Alabama in Huntsville, Shelby Center 134, 301 Sparkman Drive, Huntsville, AL 35899. Corresponding author: N. Loyd, Nicholas.Loyd@uah.edu. Transportation Research Record: Journal of the Transportation Research Board, No. 2100, Transportation Research Board of the National Academies, Washington, D.C., 2009, pp. 2937. DOI: 10.3141/2100-04