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The People Element: Striking the Right Balance of Human Capital and Automation

By: / Thu Nov 14 20:32:36 GMT 2019

It is well-known that automation offers multiple benefits to container terminals. In recent years, there has been a gradual shift, with terminals around the world choosing to explore some level of automation in order to reduce labor cost, achieve a more consistent and reliable performance or increase safety – or a combination thereof. 

However, despite ports being an ideal place to automate, the reality is that automation adoption is moving slower than expected and the ROI is not yet living up to expectations. The cost reduction needed to justify the investment is roughly 10 to 25% depending on how much productivity improvement is achieved. While we see some relevant cost reduction, productivity at these facilities averages a decline of seven to 15%, according to a McKinsey survey. There is clearly a mismatch between expectations and results when comparing fully automated greenfield container terminals with conventional terminals. 

This discrepancy can be explained by a variety of industry-wide problems. Many different surveys have collected data on the challenges associated with automation and some of the top reasons identified by industry experts include:
  • Capability shortage – Finding and acquiring the needed capabilities is difficult and our recent Automation survey found that 52% of respondents rank the lack of skills and resources to implement and manage automation among the top challenges at their terminal. Furthermore, the McKinsey survey found that it could take as long as five years to train even experienced engineers to fill specialized technical positions required for automation.
  • Poor data quality and lack of data standards – Poor data quality reduces predictability and the information currently available at most locations is not strong enough to support operations at automated ports. According to the Navis Working As One survey, 97% of respondents agree that it is important for stakeholders across the ecosystem to operate with a common set of data and over half of respondents expect gains in operational performance of at least 50% once real-time collaboration is achieved.
  • Siloed operations – One of the biggest challenges to automation is often breaking down the silos between functions. End-to-end integration and coordination of processes is critical for automated terminals to ensure any potential breakdowns are contained and managed.
  • Exception handling – For ports aiming to increase productivity, exception handling continues to be extremely cumbersome. More than 60% of operators in the McKinsey survey agree that when ports have large numbers of exceptions, the likely culprit is a mistaken approach to automating manual processes.
While all of these reasons seem to be valid, one could argue that conventional container terminals suffer from the exact same problems to a certain extent. Data quality is also poor at conventional terminals, and they suffer from as many silos as automated facilities. The adoption of technologies in conventional terminals is also high and there are always exceptions to be dealt with, although at a lower level and volume. While all of these challenges have an impact, they do not fully explain the slow time to value behind the implementation of automated container terminals.

Pulling back the lens and looking at my own experience throughout the years, I can see another factor that seems to have a significant impact on operational performance. This factor might help explain why, even within the same container terminal, during certain shifts, operations seem to run smoothly and performance is on track, while other shifts seem to fall into total chaos – even though the workload and the operation is relatively equal in terms of challenge level. This factor has nothing to do with systems, technology or equipment, but rather the mindset of the people leading operations in the control room. Although it may seem counter-intuitive, the main differentiator to achieving higher levels of productivity in an automated terminal, are people.

The kinds of people who have been most successful at automated terminals have a particular mentality and way of approaching operations. First of all, they have deep knowledge of the scope of the different systems and how they interact with each other. Second of all, they tend to be extremely proactive and look at potential problems in different timeframes – looking at data to predict problems and prioritize those most likely to occur. The combination of these two qualities is the key to delivering a positive outcome and higher levels of productivity.

However, finding these types of people has proven to be extremely challenging and scaling people resources as volumes increase is even more difficult. More container moves lead to more exceptions, more complexity and ultimately require more people – a challenge, as noted above, that terminals are struggling to address. This problem raises several questions and ultimately it challenges the way we design solutions for automated terminals:
  • Do we really understand where people fit in automation?
  • Are we creating solutions that promote holistic and proactive thinking?
  • How can we use technology to augment people’s skills instead of diminishing them? 
  • Are we designing for adoption? 
People as a key asset

Even in automated terminals, people and talent are the single most important asset. Creating jobs that are exciting, where creativity is empowered, will attract and retain the best people. But are we creating environments that attract creative people? Employees spend most of their time looking at decentralized data, spread over multiple screens, trying to find patterns that might lead to problems. Human brains don’t excel at this type of task and it is no wonder that these people are not operating at peak efficiency. We need to build and apply technology to automate this “pattern recognition” problem in order to free up people to be more strategic and creative. 

Today, systems have been designed to replace people instead of being inclusive to help them take operations to the next level. This generates a significant amount of friction between users and technologies and ultimately it is not effective. Processes and interactions need to be redesigned to take advantage of the tremendous computational power that technology offers today, while augmenting the unique skill, abilities and expertise of the human brain, so people can be proactive, strategic and have a holistic vision of how the terminal needs to operate. 


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