Applying System Dynamics Modelling to Building Resilient Logistics: a Case of the Humber Ports Complex

Applying System Dynamics Modelling To Building Resilient Logistics: A Case of the Humber Ports Complex A thesis submitted By John Kwesi Buor MBA (Log.), B.Ed. (Math/Sc), Dip. Math To The Hull University Business School’s Logistics Institute in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Management University of Hull UK 2015 Dedication To my son Robin Yaw Buor Koranteng for the enormous sacrifice he has made. Dedications also to the less privileged of any society in the world, especially to the mustard seeds whom, for the lack of support, the perceived “haves” cite them as accursed. ii The Abstract This research employs system dynamics modelling to analyse the structural behaviour of the interactions between Disaster Preparedness, Environment Instability, and Resilience in maritime logistics chain as a response to policy change, or strategic risk management interventions, at ports on the Humber Estuary. Port authorities, logistics operators, agencies, transporters, and researchers have revealed that disasters lead to interruptions in free flow of supply chains, and has the potential to disrupt the overall performance of a logistics chain. There is strong evidence about the rise in frequency, magnitude, and disruption potentials of catastrophic events in recent times (e.g. 9/11 attack, the Japanese earthquake/Tsunami and the aftermath nuclear disaster, Hurricanes Katrina and Haiyan, Super Storm Sandy, and many more). However, it appears that risk managers are not able to anticipate the outcomes of risk management decisions, and how those strategic interventions can affect the future of the logistics chain. Management appears to misjudge (or miscalculate) risks, perhaps due to the assumed complexity, the unpredictability of associated disruptions, and sometimes due to individual managerial approach to risk management. The uncertainties and states assumed notwithstanding, investors and regulators have become increasingly intolerant for risk mismanagement. Shipowners and port authorities tend to managing cost instead of managing risk. Hence they appear to invest little time and fewer resources in managing disruptions in their logistics chains even though they seem to frequently conduct risk assessments. We suggest that disaster preparedness that leads to resilience in maritime logistics chain is the best alternative to preventing or reducing the impacts of disruptions from catastrophes. iii We aim at improving current level of understanding the sources of disruptions in port/maritime logistics system through analysing the interdependencies between key variables. The dynamic models from this research have revealed that there is strong influence relationships (interdependencies) between Disaster Preparedness, Environment Instability, and Resilience. We found that potential sources of disruptions along the spokes of maritime logistics system can be port physics related, however the subtle triggering factors appear to be port size related. We also found that policy interventions geared towards risk management have the potential to produce unintended consequences basically due to unacknowledged conditions. Thus the relevance of the research and the SD models was to provide strategic policy makers with real-time decision evaluation tool that can provide justification for acceptance or rejection of a risk management intervention prior to decision implementation iv Declaration I hereby declare that I have carried out this research and that this thesis is entirely my work. John Kwesi Buor v Acknowledgement The journey has been long, the road has been narrow and sinuous, the terrain has been dangerously undulating, and very difficult for the “lone-ranger”. However, like a conqueror, I cannot pocket the cake of success alone without acknowledging people, institution, and other stage-setters, but for whose immense contributions and support my journey to the academic world and for that matter, this thesis would have remained a mirage. Firstly I express a measureless gratitude to the HUBS whose scholarship offered me the chance to study in the UK. Next, I would like to thank the committee members for my thesis defence (viva), especially Dr Khalid Bichou and Dr Alessandro Creazza. Your brilliant comments, fair critiques, and pieces of advice during my thesis defence and thereafter, helped me to chisel the rough edges in order to add finesse to this piece of artefact. Above all, your expertise is a wakeup call on me in my early career as a researcher. Professor David B. Grant, I appreciate your role in steering the affairs of the committee and thereafter, the materials you mail to me for review. I share the credit with my supervisor Professor David A. Menachof who keeps his smiles and welcomes my ideas in an experienced, friendly, but critical manner even in the very stressful moments. David, your efforts, coupled with that by the CILT members (especially Geoff Catterick) has been very substantial in making access to people at the top echelon in the industry where I did my interviews possible. In addition to the above, the following academics whose attitude and ingenuity have influenced me positively deserve commendation. I am indebted to Dr Raphael Akamavi for your regular encouragement, general advice, and constant reminder of my responsibilities as PhD student. Your personal experience and influence kept me working even when there seem vi to be no hope in sight. When everyone else seem to have forgotten of my existence as a student, Raphael kept in touch to ask about my weekly and monthly progress as well as to spur me on with word such as “the thesis is your own; work on”. It is also a great pleasure for me to reckon the role of Professor Terry Williams (Dean of HUBS) for breaking his tight schedules to help me reshape my model. Thank you Terry for your arrangement which enabled me to have a face-to-face discussion with one of the originators of the SD modelling tool (Professor Emeritus George Richardson) whom I referenced copiously in my analytic chapter. Collectively, I say thank you to Terry and George. Many thanks to Professor Gerald Midgley and Dr Jennifer Wilby, both of you took personal interest in my research topic and offered me the opportunity to present in my first ever international conference at the ISSS. Gerald, the articles you mailed to me on systems sciences and cybernetics have opened a big widow for me in my research. I cannot overlook the dexterity with which Professor Chee Wong performed the first surgery on my upgrade report. Prof, your critical lens won me a lot of admirations from those present at my upgrade presentation. I appreciate the stage you set for me to really understand my work and to become independent in my research work. I also remember how an interview turned into an interesting 3.5hour lecture on ‘port vs environment relationship’, without both of us knowing that we had spent that much time. Professor Mike Elliott of the Institute of Estuarine and Coastal Studies (Marine biologist), I sincerely appreciate your work which contributed immensely to my research. Mike I have completed this chapter, but I have not ended the challenge to take up research in the field of logistics and environmental science. Furthermore, I must also acknowledge the contributions made by my research colleagues who kept me company even in the cold nights and sometimes, in the hostile conditions at our studies centre. Your academic arguments, the challenging problems you brought forth, and the mutual assistance we shared have broaden my mind, and have even challenged me on vii several occasions to cross novel fields in my quest to understand our world. Special names pop easily in this category: Godfrey Nyamrunda, Daniel Ufua, Abraham Adu-Boateng, Roland Getor, Bola Babajide, Yvonne Ndefo, Xiaolan Chen, Piyya Muhamm, Shehzad Ahmed, and many others. You spurred me on to become a good leader among us. There are some very special personalities who made gold out of the dust in me and deserve my most heartfelt gratitude. A special appreciation goes to my former middle school head teacher, the late Mr GKZ Abrompah, who personally paid for my ‘common entrance examination fee’. Your effort has paid off today and has opened the education gateway for me. I cannot measure the wonderful role that the late Mr SK Appreku also played in my secondary school life. I live to attain heights by your making. May your individual souls rejoice with me whiles your bodies rest in perfect peace. I owe my life and everything I can do or acquire to the one I knew as my Grandmother - the late Madam Rosa Adjontey. Thank you grandma for making me a humble and an appreciative man. To the rest of my family (both nuclear and extended), words cannot express how grateful I am to you. Your prayers and support have propelled me on to this level. You have done an incomparable work and I know more of your prayers is needed even as I expand my horizon. Most especially, and the greatest of all, my deepest gratitude goes to Mr and Mrs Diop Frimpong for being there for me whenever I called. You have been my source of inspiration. Even though I have none of my own, you fit well into the shoes of my parents and you took me as your own. For those who shut their doors at the sight of me, thank you very much for not letting me in and for making life choices look so easy for me. But for your action, I would have gone into sleep thinking that that is the end of my journey. You did not know that your cruel treatment was rather going to open

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