System Availability Management for Small to Medium Sized Marine Shipping Companies in Hong Kong
Introduction
Today’s era is characterized as he information age in which people depend greatly on the faculty of information management technologies in order o perform duties and responsibilities as well as communicate with each other beyond the boundaries of time and geographic locations. Information technology systems improved the functionality of organizations in order to efficiently deliver products as well as services to the people thus, resulting to the progressive development of daily operations through the more productive input of staff and employees. Information technology has been recognized as the major catalyst of change and innovation and served as the vital connection between the digital electronics systems and the communication technologies. Electronic transformation initiatives have been also acknowledged as the foundation of information technology systems as it connects data, users, software, organizations and the environment where they exist.
The advances in technology and the fast modernization has enable commercial industries in the private sector to keep up with the inevitable changes that has been revolutionizing the way people do things. Organizations in the public sector have been likewise initiating change in delivering services to the people as new management approaches were utilized to reform the traditional civil service practices. Change in both the private and public sectors made it possible to meet the expectations of end-users as well as clients of different organizations. At present, most commercial firms and companies have been long using information technology systems while a number of government organizations and public agencies are beginning to initiate similar electronic transformation through the implementation and use of the Internet and the computerization of transactions and other organizational operations.
The Reasons for Change
Organizations operate in environments that are directly and indirectly influenced by conflicting demands from all the parties they are involved in such as the customers, the suppliers, the forms of authorities and the members of the personnel within the organization. Contradictory forces and competing demands highlights the initiatives of organizations to implement change and innovation along with the set performance goals envisioned by the organization. Conner (1994) emphasized that the reasons behind most organizations’ initiative towards change include factors and considerations brought about by trends of globalization and the performance evaluation of the innovative capacity of organizations. Change in this regard was made evident through structural reforms among organizations, business transformation plans for sustainable long-term success, implementation of technological systems and infrastructures, and new customer and employee management approaches (Conner, 1994).
Meanwhile, other experts believe that it is expected among organizations to continuously reform is business practices as well as management approaches to reflect the organizational setting and culture that characterize its surroundings. Since bench marking processes are continuously presented to set standards, organizations are usually confronted with decisions to innovate. In this regard, change serves as a major determinant of the success and failure among organizations (Hardy & Clegg, 19996). As a result, organizations expand in terms of depth and scope, job descriptions are more defined, measure and systems of standards improve, and professional functions become highly distinguished. However, integration and transition states are unfortunately never simple procedures particularly when it involves intensive reforms and restructuring and when it involves a large organization.
The drive towards gaining competitive advantage among business organizations at present is mostly grounded on issues and concerns regarding customer satisfaction. Businesses at present are finding means of creating added value to products and services that are being delivered to the consumers. Management executives carefully plan strategies that will increase the loyalty of consumers along with business reengineering processes within the company to enhance the efficiency of operations. Companies likewise continue to extend and widen the reach marketing and sales plans in order to increase the market base within local as well as international markets. With the trends towards globalization and outsourcing practices, management and business communication approaches of business organizations underwent complete reformulation and restructuring to meet the current market demands. As barriers of entry continued to be crossed by new and aspiring business firms offering innovative business processes, competition becomes increasingly aggressive.
According to Karp and Schlesinger (2002), effective execution of business plans and strategies is only possible if the management is aware of the available resources of the company. By familiarizing with the strengths of the company, formulation of strategic plans is realizable since assessment and evaluation of the capabilities of the entire company is taken into account. Examining the extensive ways of utilizing the available resources of the company will enable decision-makers to construct profitable business ventures that will contribute to the success of the business organization. Such business practice will also clearly define the characteristics of the business and the market environment that surrounds it thereby opening opportunities to assess and evaluate the inherent risks and issues that are challenging the competitiveness of the business organization ( 2002). All these enable the management to take full control of the existence of the business organization.
The Shipping Industry
According to Brooks (1996) the restructuring of the ocean transportation of general cargo began the advent of containerization. This led to the formation of container shipping lines and ocean carriers specializing in the transport of containers. Twenty-six percent of the world transporting capacity was recorded to be controlled by the twenty largest container shipping lines as ranked by ship twenty-foot equivalent unit (TEE). Fifteen years later in 1995, fifty percent of the world transporting capacity was already in the control of the largest shipping lines. Among the leading shipping lines are the Asian operators which compose 49 percent followed by the European operators at 33 percent, the United States with 14 percent and the remaining shipping line operators accounting for 4 percent.
Dow (1998) indicated that two years later in 1997, the twenty largest shipping lines ranked by Teas transported recorded 78.2 percent of the hundred largest shipping lines. The top three shipping lines were the Sea-Land, the Evergreen, and the Mares which accounted for 33.2 percent of the Teas transported. The other ten top-ranked lines serve the transpacific trades while the Sea-Land, Evergreen, and Mares serve global networks, including the transpacific, transatlantic, and Mediterranean and Middle East trades. However, financial issues challenged the industry as one of the implications of the increase in the concentration in the container shipping line industry. In 1996, approximately 1 million was the collective loses among container shipping lines with business operation and transactions in the transpacific, transatlantic, and Europe/Far Asia trades (Porter, 1996). This is reflective of imbalance between market supply and demand as exhibited by the surplus ship capacity among the members of the industry as well as the decreasing rates in the transportation.
Since it was difficult for the container shipping lines to increase their service rates, cost-reducing means of operating the business were opted by the owners. This was realized by forming alliances along with mergers and acquisitions between and among the members of the industry and investing in more cost-efficient ships. New formed alliances decided to share the resources and assets of the company to their operation partners including the vessels and terminals in order to reduce operational expenditures. By sharing these resources, container shipping lines, operators, and owners were able to retain and sustain the demands of the services without sacrificing their independence. Reducing the number of port calls made it possible to save ship capacity and improve the transit lines and schedules (Talley, 2000).
According to Waster (1997) the new found alliances predicted and expected a yearly cost savings ranging from 0 million to 0 million. However, the years that followed proved that such savings can only be realized in a long-term business partnership condition and interdependence between and among companies. This resulted to mergers among container shipping lines. In 1997, P&O (a British carrier) and Nedlloyd (a Dutch carrier) decided merged creating the world’s largest container shipping line in the maritime industry projecting an annual cost savings of 0 million. Such savings was anticipated to be composed of eliminating duplicated overhead accounting for a total percentage of 65 percent (Waster, 1997; Trischwell, 1997).
Pace of Technological Change
The best suppliers continuously update and upgrade their service deliveries in order to answer the demands of their customers. Customers have the ever-increasing demand on getting their hands into the products which can lead to change in supplier if expectations are not met. This is the reason why suppliers who are also industry leaders trend toward more reliable delivery services across their customers (Cohen & Moore, 2000). Today most companies find that it impossible to create any kind of sustainable competitive advantage based on product alone. It is common knowledge that every one of the successful companies sought and found a precise understanding of how it could create advantage in the operations system and delivery options of the business organization (2001).
Every business person is determined to know what kind of work they would and would not do for their customers and, in turn, they carefully learn how to fulfill the needs of each kind of customer in their target markets (2000). The inception of technological advancements in the production processes and logistics within the recreational mega-yacht industry led to continuous development within its different business sectors. With mega-yachts being transient sea craft that frequently sail from port to port, technological advancement in the industry particularly in the procurement and logistics of efficiently delivering boat parts has been the priority of suppliers to create value and customer satisfaction to the products and services they offer. Strong technological capabilities are paramount to the current pace of modernization and technological adaptation is inevitable among the members and key players of the industry to stay competitive and successful.
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