MSC Cruises is modernizing its supply chain and turnaround operations by prioritizing digitalization, demand forecasting and vendor integration, according to Paolo Raia, managing director of procurement and logistics.
Highlighting the challenging nature of the turnaround process, he noted that the brand leverages synergies with its broader shipping and cargo divisions to be more effective.
Calling it a critical operation, Raia said that on turnaround days, thousands of products have to be delivered to the company’s ships between 7 a.m. and 4 p.m..
To streamline these tight operational windows, MSC is focusing on two main aspects, including advanced demand planning.
“We need to improve our ability to predict consumption, anticipating the needs from the vessel,” Raia said, adding that the initiative started with food and beverage before expanding to hotel operations and retail.
The second pillar is the digitalization of the receiving process, moving away from traditional manual operations.
“What we are doing is creating more integration with our suppliers. We are now receiving advance data from them,” he explained.
By utilizing barcode scanning alongside the ship, crew members can physically count goods and automatically reconcile them against the data provided by vendors.
Raia said that the new digital process allows MSC to capture critical supply chain information, such as lot numbers, expiration dates and country of origin, which was almost impossible to collect previously during the loading process.
He said that this new process was created after the company benchmarked several industries and noticed room for improvement.
While artificial intelligence presents an opportunity for further supply chain optimization, Raia said that the industry is still learning how to take full advantage of it.
“AI works very well when you provide qualitative data. But at the moment, at least in the cruise industry, it is not quite there yet,” Raia stated.
“It all starts in the loading phase. If we are able to introduce digital tools that can certify the data and track the product consumption onboard, then AI will be a perfect improvement for our operation. But first, we need to build the basics.”
Achieving that data-driven future requires pushing legacy vendors to adopt modern technology and Electronic Data Interchange (EDI) systems, he added.
“The majority of our vendors have worked in the cruise industry for a long time; they have always worked in a very manual way,” Raia noted.
“When you challenge them with EDI and with technology in order to integrate them, it is not easy.”
He noted that even minor packaging changes, such as a box holding 12 cans instead of 10, can disrupt automated systems if vendor data is inconsistent.
“We need the entire ecosystem to focus on the same topics, meaning pushing our partners to work in a certain way, which is a very positive one,” Raia said.
“We started this revolution in Europe, and in the last six months, I have 80 percent of the suppliers fully integrated,” he added.
In the long term, this data-driven foundation will support sustainability goals, including the push for local sourcing, Raia continued.
“We need to buy more locally, but if we start to switch suppliers because we want to buy local, we need to be sure that the new suppliers can provide what we need.”
