The efficiency of the country's ports and the sustainability of their operating methods are central to the country's larger economy. Dredging Services (DS) is a business unit of the NPA that carries out maintenance dredging of the South African ports as well as hydrographic surveys. According to Internet source 8, Dredging Services has operated as a separate business unit since 1988, and has been "ring-fenced" since April 1, 1990 by order of the Minister of Trade and Logistics.
Since 1990, Dredging Services has been ring-fenced (this means that Dredging Services was created (by Transnet) to be a business unit completely separate from the various Ports, . with its own Income Statement and Balance Sheet) as an independent business unit of NPA. The main strategic focus from 1990 to 1997 was the rationalization of the dredging fleet and from 1997 onwards the strategic focus has been on improving the efficiency and effectiveness of dredging operations.
National Ports Authority Organogram
PROBLEM STATEMENT AND OBJECTIVES
Another legacy issue is that no capital improvement program/asset replacement plan existed for Dredging Services. The result is an aging dredging fleet with substandard equipment availability and productivity through breakdowns and equipment obsolescence. As a result of the above, the problem for DS is to determine how it can change its current way of working in order to create capacity for additional work needed for it to become sustainable.
Developing a business plan that will enable DS to 'create' capacity to enable remote work, facilitating business sustainability. Develop an asset replacement plan necessary to support the company's external work initiatives.
RESEARCH DESIGN AND METHODOLOGY
- PRESENTATION OF A CASE STUDY
- DATA COLLECTION METHODS AND ANALYSIS
- DATA ANALYSIS TO IDENTIFY FUTURE STRATEGY
STRUCTURE OF THE STUDY
INTRODUCTION
LITERATURE REVIEW
RESEARCH METDOLOGY
PRESENTATION OF RESULTS
DEVELOPMENT OF AN ASSET REPLACEMENT PLAN
DISCUSSION OF RESULTS AND CONCLUSION
- IMPORTANCE OF THE PROPOSED STUDY
- NATURE AND FORM OF RESULTS
- SUMMARY
- The Strategic Planning Process
- VISION, MISSION AND OBJECTIVES
- IMPLEMENTATION OF STRATEGY
- ENVIRONMENTAL SCAN
- FORMULATION OF STRATRttv
- EVALUATION AND CONTROL
- Vision Mission and Objectives
- Environmental Scan
- Strategy Formulation
- Strategy Implementation
- Evaluation & Control
- The Business Vision and Company Mission Statement
- Corporate Level Strategy
- Business Unit Level Strategy
- Departmental/Operational Level Strategy
- The Business Plan
- Strategic tools
- PESTLE Analysis
- SWOT Analysis
- Competitive Advantage
- Porter's Generic Strategies
- Porter's Five Forces
- Ansoff Matrix
- Model development
Implementation includes the organization and optimal use of the company's resources and the motivation of employees to achieve goals. The business vision gives purpose and provides a basis and guide for decision-making and strategic direction. The corporate strategy is designed by Transnet, which is focused on the development of the business strategy of the National Port Authority.
According to Johnson and Scholes:2002, the following can be used as a checklist to consider and expedite an analysis of the various impacts. The market penetration strategy is the least risky (according to http://en.wikipedia.org/wiki/Ansoff_matrix) as it utilizes many of the company's existing resources and capabilities. Diversification is the riskiest (according to http://en.wikipedia.org/wiki/Ansoff matrix) of the four growth strategies as it requires.
The result of the theoretical analysis is the preparation of a strategic analysis model to which the case can be applied.
RESEARCH METHODOLOGY
The case study approach will be adopted along with the use of interviews of executive committee members of Dredging Services. Zonabend (1992) stated that the case study is carried out by placing special emphasis on completeness in observation, reconstruction and analysis of the cases studied. Case studies are conducted in a way that incorporates the views of the "actors" in the case being investigated.
Yin (1989a) stated that the case study method can be seen to fulfill the three principles of qualitative method: description, understanding and explanation. Descriptive theory must therefore cover the depth and breadth of the case study. Some of the criticisms of case studies in this area relate to single case studies.
Yin (1994) presented the protocol as an important component in confirming the reliability of the case study research. Case study questions (specific questions for the researcher to consider while collecting data). The overview should make clear to the reader the general topic of research and the purpose of the case study.
Case study questions are posed to the investigator and should serve to remind that person of the data to be collected and its possible sources. This aspect of case study methodology is the least developed and therefore the most difficult. This quantitative approach would be attractive to some of the critics of the case study methodology.
DATA COLLECTION METHODS AND ANALYSIS
PRESENTATION OF RESULTS 4.1 Strategic Objectives and Initiatives
- Assessment of the External and Internal Business Environment
- Business Analysis
- Business Environment over the next 5 years relative to what the business does As detailed previously Dredging Services offers the following services
- Market Analysis
- Expected changes in technology and best practices
- SWOT Analysis
- Strategic Initiatives and Action Plans
- Objectives Business Objectives
- Marketing Strategies Marketing approach
- Projected Profit and Loss Inclusive of African Markets
- Evaluation and Control Meetings
- Human Capital Development
- Business optimization & productivity
- Capacity development
- Succession and retention
- Culture and environment
- Results from Interviews with DS Executive Committee Members Answers from the questions asked are grouped below;
Dredging services use the harbor engineer's and city council's budget to determine the annual work plan at that time. The African market is still untapped and represents great growth potential for dredging services. Dredging Services is in a position to offer current products to existing and new customers.
Dedging Services is to be positioned as the leading supplier of dredging and hydrographic surveying services in Southern Africa. Cleaning services need to adapt their services to make them more attractive to the African market. Drilling services have the advantage of proximity to African countries, as well as the weak nature of the South African Rand compared to international currencies.
Given the potential location of dredging services outside the NPA, it is vital for the NPA that dredging costs are linked to the market so that unnecessary costs are not incurred in the future. Dredging Services is in a position to retrofit its current equipment to facilitate dredging with minimal modifications. Alternatively, dredging services could help finance a floating pipeline and offset these costs with increased foreign revenue.
A market penetration strategy seeks to acquire a larger share of the market in which Dredging Services currently competes with its existing products. This offers Dredging Services the advantage of no competition, but limits growth potential. Unless proactive growth mechanisms are pursued, Dredging Services will either be scaled back to improve efficiency (growth opportunities are lost) or sold to an international group (reduced to a fraction of its current scale).
ASSET REPLACEMENT PLAN The existing Dredging Services Fleet consists of
- FINANCIAL FEASABILITY OF ATTAINING A NEW TRAILING SUCTION HOPPER DREDGER
- PLAN FOR REPLACEMENT/IMPROVEMENT OF MAJOR EQUIPMENT ON THE EXISTING DREDGERS
- Current maintenance expenditure
- Benchmarking Exercise
The company must be self-sufficient, which necessitates carrying out maintenance/investment dredging works outside local waters. There is therefore a business imperative to develop an asset replacement strategy, not only to ensure the continued availability of existing dredging equipment, but also to meet the need to identify future fleet requirements to achieve the objectives of the company to support. Dredging Services' investment plan provides for the purchase of a new trailing suction hopper dredger in 2009, as well as a cutter suction dredger in 2009.
The insurance rate per year is obtained on the basis of a proportional escalation of existing insurance costs with an inflation correction of 5% per year. The calculation is conservative as overheads are taken at 10% of total costs per year which is more than enough. 33 weeks/52 weeks) is used which is also conservative as benchmarking exercises indicate that this should be in the region of 70%. Considering the NPA discount rate of 13.8% and revenue projections based on 2.5 million m'3 @ €2/mA3 per annum (scaled at 5% per annum), net present values (NRVs) for a 20 years €2.92 million R23.38 million), showing that the project will add value to the business.
An independent technical audit completed (late 2001) on this vessel indicated that the vessel had approximately 8.5 years of operational life remaining (operating 12 hours per day). The skills required to successfully operate Ingwenya are thus more readily available than those required for Piper. The maintenance cost per year of a new excavation is approximately 10% of the cost price of the excavator.
It should be borne in mind that the maintenance strategy employed by Rohder for this vessel is not known and it may be that the maintenance expenditure on this vessel is at a minimum to keep the vessel operational. A mid-term goal should be to improve operations management through working 24-hour shifts to create capacity for new work, while the longer-term strategic direction is for the business to shift from being a pure maintenance dredging provider to a commercial entity. The strategy has outlined that the purchase of a new TSHD is financially feasible as well as the development of capital and operating expenditure plans for the future.
RECOMMENDATIONS AND CONCLUSION
- REPOSITIONING OPPORTUNITIES
- Maintenance dredging in Africa and Internationally
- Capital Dredging
- Consultancy - Africa and internationally, including training
- Depth Management to ports
- Provide Developed Skills - equipment and human resources
- Submerged Foreign Object Recovery
- Dredging and surveying of Dams
- Hydrographic Surveys - Africa and International
- Usability of Dredging Process By-products
- Beach Nourishment
- Analysis of Opportunities
- Recommendations
The cleaning services business unit of the future should be positioned as a global cleaning specialist that offers flexibility in providing expert cleaning solutions. It is recommended that the recommendations contained herein be adopted, subject to timely presentation of relevant business cases. If implemented, then workshops will need to be held to solicit input from all levels of the business unit and gain management support.
In order to determine the viability, timing and sustainability of each of the above options, a more detailed analysis was carried out for each of the options by assessing each according to a set of criteria (as stated in Chapter 2) to determine the demand and attractiveness , the investment impact, the risk as well as the impact on training, resources and systems. Middle-High (linked to the development of African ports). See table indicating potential dredging opportunities in African ports). To provide dredging services where port construction/expansion takes place, differentiated by whether (1) new equipment (ie, a dredging vessel) would be required or (2) whether existing dredging equipment could be utilized).
The above assessment is based on the fact that new ports and port expansions occur on a consistent basis and will create opportunities to engage, but new equipment and resources will need to be provided. Capex: High (requires new equipment) Resources: High . - choice of service providers available and will require potential additional resources). Very high (there are a number of international consulting firms). Low - Reputation can be a barrier as SA dredging is not internationally known as a consulting company) Low - Medium (quality and not price is considered more important).
Recover foreign bodies on the seabed as an alternative to using diving services (divers perform this function annually for the harbor engineer). The frequency of this type of service is very low on an annual basis and revenue potential limited). Low - Medium (Equipment risk will always be an issue, but there is currently sufficient capacity to minimize business continuity risks). The release of resources is a critical factor that will enable Dredging Services to pursue repositioning opportunities (ie new business).
UNIVERSITY OF
KWAZLJLIR^ATAL
