Carnival | Princess | Holland America | Seabourn | Carnival UK | Cunard | Costa | Aida | P & O Cruises Australia | Iberocruceros
Inter-American Supply Chain Forum 2012
John Meszaros
VP, Supply Chain Management
Carnival Corporation & plc.
Carnival | Princess | Holland America | Seabourn | Carnival UK | Cunard | Costa | Aida | P & O Cruises Australia | Iberocruceros
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Carnival Corporation and plc own and operate 10 cruise brands that are
managed by 6 Operating Companies around the world.
2011 revenue: $15.8 billion USD
2011 Net. Income $1.9 billion USD
Employees: 90,000
99 Ships with 10 new ships scheduled for delivery through 2016.
Over 200,000 Guests are at sea on our Fleet at any given time.
Typical Large Cruise Ship - 1500 Guest Rooms / Suites, 3000 guest berths
(beds), 1200 crew, 28 bars and restaurants, main dining room that seats 1500
persons.
Direct Trade Goods spend (F & B, Fuel, Hotel, Logistics) is over
$4 Billion USD.
Carnival | Princess | Holland America | Seabourn | Carnival UK | Cunard | Costa | Aida | P & O Cruises Australia | Iberocruceros
Group Introduction
Brand
Vessels
Main Market
Brand
Vessels
Main Market
23
North America
14
Europe, China
16
North America
7
United Kingdom
15
North America
8
Germany
6
North America
World-Wide
4
Australia and
New Zealand
3
North America
United Kingdom
3
Spain - Europe
Total ships – 99 Ships
3
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SCM Customer-Business Centric
The Supply Chain Teams in the Cruise Industry have many customers.
The “Ultimate Customers” are our Guests on the Ships !!
Our Guests look forward to their hard-earned vacations and expect a
spectacular experience.
If SCM fails for a cruise ship and causes ship delays – the experience will be
terrible and costly for the company.
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Hotel Fun Facts about a Carnival Ship
Each ship must have over 5000 items on contract ready to order each week
from hundreds of vendors in dozens of Ports.
A single 7 Day Cruise consumption facts:
• 30,000 beers
• 22,000 sodas
• 3,000 bottles of wine
• 3,000 liters of Spirits
• 5,000 quarts of juice
• 5 tons of beef
• 3 tons of chicken
• 2,500 lobster tails
• 25 tons of produce
• 18,000 shrimp
• 42,000 eggs
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Technical Fun Facts about our Fleet
We have over a Million parts in our Technical Data Bases.
Each ship has many thousands of replacement parts, consumable items and
services that are needed to keep the ship in excellent running condition.
Facts:
• We purchase just under a BILLION gallons of Fuel per year in 150 Ports.
• The carpet on our ships is over 4,000,000 Sq. Mtrs – enough to cover
about 520 Soccer fields.
• There are over 300,000 life jackets on our ships.
• Adding new flat screen TV’s in all cabins would require over 150,000 units.
• To simply change every light bulb on our fleet would require 3,000,000 bulbs.
• There is enough wire and cable on our fleet to wrap the center of the
earth 4 times.
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Bathroom Amenities
Sheets
Lobster
Stainless Steel
Photo Film
Wash Service
Lube oil
Textiles
Our Supply Chain must deliver….
Pots & Pans
IT Services
LED SCREEN
Ice Cream
Bar Supplies
Beef
Mental Ware
Office Supplies
Engine Parts
Towels
Chemicals
Butter
Pumps
Bath Mats
Art
Cutlery
Beer
Hollowware
Uniforms
Hardware
Carpet
LCD TV
Bearings
Robes
Software
Soda
Mops
Onboard Communications
Brooms
Furnishings
Silver Plate Flatware
Foil & Films
Vacuum Cleaner
Juice
Garbage Bags
Telecom
Service
Wine
Utensils
Table Cloths
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And we must deliver it to a Physical Plant that moves….
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Most companies have a defined physical plant (i.e. the plant doesn’t move)
The Supply Chain for a Cruise Line is much more challenging because every
purchase has one extra dimension – where is the ship ???
Our physical plants are the ships that are continually moving.
– Vendor are dynamically assigned based on the ship’s itinerary and
loading ports. Goods assigned to a vendor in Barcelona are supplied by
a different vendor when the ship is re-supplied in the Caribbean.
– Redelivery past sailing time is not an option. The ship is on its way to
another destination which is often in a different country.
– Because ships are foreign flagged vessels and visit many countries proper customs documentation is necessary.
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The movement of the ship can be easy or very complicated
104-day World Cruise
7-day Repetitive Cruise
9
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For a typical 7-Day repetitive cruise
Ships are in port only 10 hours:
 3000 Passengers disembark
 Ship is cleaned top-to-bottom
 Ship is re-supplied
 3000 Passengers embark
Behind the scenes – Loading Doors are the constraint:
7:00 am
noon
5:00 pm
10 Hours from dock to departure
Customs
6000 Guest Trash
and
bags are off off
Immigration loaded
loaded
clearance
300 pallets of Food,
Beverage, Hotel, Tech
supplies are loaded
1000 Metric Tons of Fuel is loaded
6000 Guest Final check
bags are
and
loaded
departure
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How do we service our Guest’s needs to get such High Approval
and Satisfaction ratings?
•Our itineraries are well planned and scheduled 12 – 18 months in advance.
•We define guest facing needs (items and services that the guests use
directly like food & beverage, linens, furniture) which are critical to be
consistent on every cruise for a specific Cruise Brand.
•We have “behind the scene” needs (items that are necessary to provide
the excellent guest satisfaction that the guest never sees or knows about
like fuel, cleaning supplies, engine parts, galley equipment) that are critical
but our guests hopefully never know about.
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Guest Facing Needs and the Supply Chain
Food and Beverage
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Menus are well defined
Demand is forecasted well and for each itinerary a Loading Port is
identified (multiple loading ports on longer cruises).
Our cabins are essentially 100% filled so we don’t have to forecast number
of guests although sometimes different guest demographics could change
demand for a specific item.
Once Loading Ports are defined then Supply Chain Planners evaluate how
to best supply each item to the ship - selecting from:
1. Local Vendors
2. Supplied via Ocean Container or Trucks from another Source Market
Decisions on whether to buy Local or ship from another Source Market
depends on Total Cost of Ownership, market availability and complexity of
loading.
Changing Menus “on the fly” works at your local restaurant but doesn’t
work when feeding 3000 guest simultaneously over a 4 hour period.
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Guest Facing Needs and the Supply Chain
Hotel Items
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Item Specifications are well defined
Timing of getting items to the ship are more flexible except for direct
consumable items (like cleaning chemicals).
Ordering systems force the ship to only order certain items in certain ports.
Guest facing items like linens have back stock on the ships to ensure guest
quality.
Loading Ports are defined similar to Food and Beverage but do not
necessarily need to be spaced 7 days apart – can be less frequent
deliveries because there are no perishable items.
Hotel Items are purchased in markets all over the world for consolidation
and delivery to the ships.
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“Behind the Scenes” Needs and the Supply Chain
Fuel
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Fuel is lifted every 7-14 days.
Lack of Fuel is the one item that could cause a delay and destroy a well
planned itinerary.
We have a fuel forecasting system that evaluates EVERY stop on a ship’s
itinerary over the entire year and calculates daily fuel needs.
The daily fuel needs are then evaluated against every vendor, in every port
to determine the lowest cost, highest quality fuel options.
Vendors and ports are evaluated for quality of fuel, type of infrastructure
(barge or pipeline deliveries), historical vendor performance, grades of fuel
available, capacity of delivery (how many Gal/hr can be pumped to the
ship) and several other variables.
As a reference – if there was a problem in a port and we needed to get fuel
from a non-preferred port that could only deliver by trucks – we would need
25 tanker trucks to supply a 1000 MT.
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“Behind the Scenes” Needs and the Supply Chain
Technical Items
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Technical items are categorized as consumables (lube oils, paint, light
bulbs), spare parts for major technical components (engines, Propulsion
systems, generators) or services (Life raft safety review and inspection,
equipment Preventative maintenance).
Guest satisfaction is greatly influenced by the success of maintaining the
ship.
The technical teams plan extremely well for guest facing technical services
to keep all ships in excellent shape.
Technical equipment is carefully monitored and preventative maintenance
procedures are well defined and carefully followed.
Like all complicated equipment – failures will happen but because of
redundancy built into the ship’s design – our guests rarely know about any
technical issues.
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Global Purchasing Structure
Purchasing Teams
of Brands
Strategic and
Global Souring
Functions
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There is nothing more important than a satisfied guest
•Cruising has one of the highest satisfaction ratings among vacation venues and is
probably the most complicated industry to deliver such great satisfaction.
•SCM in the Cruise Industry is critical because failures are very noticeable and
expensive.
•Unlike land-based customers – our ships and our Ultimate Customer, our Guests –
are continually moving so Supply Chain planning is more critical than some other
industries.
•The ships are like self-contained miniature cities so the breadth of items and
services that must be supplied to satisfy our guests is huge.
•Through well defined specifications, processes and supporting systems – SCM
delivers in the Cruise Industry.
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Thank You!