Of Cruise Ships and Commodities: What Matters Most When It's Full Steam Ahead

I must admit, we're not big "cruise people" in the Busch/Reisman house. But we're planning on taking our second Disney Cruise with the family this winter (if you're on the fence, I'll go out on a limb to say that Disney does everything right, even if you hate the whole concept of getting on a floating city with thousands of families and screaming kids). Yet of course like many others preparing for a trip in the coming months, the tragedy in the waters on the coast of Italy caught our attention as more than just another sad human-interest story.

Rather, it reminded us that we're putting our own lives at risk by getting on any type of boat without fully explaining to everyone coming with us the importance of both following safety instructions and going with your gut instinct in times of crisis (i.e., not waiting around to be told what to do). Under less moribund circumstances than watching the death toll climb from the Carnival Costa Concordia tragedy, our dinnertime conversation preceding a planned trip would be more inclined to discuss the economics, procurement and supply chain operating procedures of cruise lines rather than their approach to safety.

If you're curious about the unique procurement and supply chain challenges in the cruise industry -- aside from the fact, at least putting a positive spin on the general extremely good safety record of ships, there is probably no UNSPSC classification for cruise ship "salvage" or "scrap" services -- then this article from World Cruise Network last year is a great place to start. The industry presents a fascinating set of unique challenges to procurement and operations team members. Consider that "Carnival's supply chain now covers more than 70 ports, twice as many as five years ago, while the global fleet of cruise ships visits 500 destinations." In other words, supply management activity is always a both a moving and floating target -- literally.

In addition, "Adding to procurement's challenges is the double whammy of far-flung itineraries, which require managers to deal with many more suppliers and port authorities in different currencies, as well as competition with other industries, such as supermarkets, land-based hotels, airlines and rail, for a wide range of increasingly expensive commodities." Here at Spend Matters, we can't begin to think of an industry with a similar set of dynamics that must buy in such quantity where logistical delays even in secondary locations/ports of call could present truly logistical nightmares. Aside from a procurement or supply chain career in the military, the cruise industry could very well be one of the most dynamic environments to work in.

- Jason Busch

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Voices (3)

  1. Bernard Contreras:

    Jason, thank you for posting this interesting perspective. I work for Crowley Maritime and we’re investigating potential use of UNSPSC to assist in our move to strategic category management. By sheer coincidence, it was a Crowley subsidiary/partner that was involved in the Costa Concordia salvage operation.

    Crowley’s procurement challenges and dynamics are very similar to that of the cruise ship industry with the exception that we’re not also feeding and entertaining tens of thousands of passengers every week.

    Thank you.

    1. Nick Heinzmann:

      Thanks for sharing, Bernard. That’s interesting to hear that your organization is looking into UNSPSC — we recently ran a guest contribution about such an effort at another company, eir.

      We’d love to hear more of your thoughts on the matter and how the change goes if you do chose to use UNSPSC. Feel free to reach out to us if you’d like to talk more! (nheinzmann@spendmatters.com)

  2. bitter and twisted:

    Yes, but on the bright side
    – the customers pay in advance
    – cost savings are gravy rather than vital
    – if you can get the passengers there, you can get stuff there

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