Page 8 - KFTL Report

KFTL DUE DILIGENCE – Kingston, Jamaica
This can easily be achieved, with a prioritised and targeted remedial work program, and is discussed in detail further in this report.
3.4 Inventory
The large part of the current inventory was transferred from the Port Authority at the time of taking over the concession in August 2016. In excess of 3,000-line items, were found to be obsolete and therefore surplus to KFTL requirements.
Another large quantity of high value items, grossly excessive in quantity, forms part of the inventory.
These parts are unlikely to be used in the foreseeable future, with the risk of seeing large scale degradation though corrosion for example, unless the necessary stores management practices are promptly implemented.
Several stores exist on site, including a number of shipping containers, in which it would be difficult to control the quality of the storage, and accounting of the goods.
A large building, in a current poor state of repairs, houses a big percentage of the inventory.
It would be Trent’s recommendation to redesign this building, make the necessary repairs, and convert it to become the main inventory facility.
The smaller store in the new straddle workshop, which is congested, would be streamlined to then become dedicated to the day to day requirements of the straddle carrier’s inventory.
This section is dealt with in detail further in this report.
3.5 Procurement:
The procurement process has been changed from a fully systemised/ automated process managed by the KFTL CHAMPS solution, to a mixture of automated, manual processes. This happened at the time of CMA-CGM takeover of KFTL.
The decision to break the systemised process into a mix of systemised and manual, has had a negative impact on the procurement process, adding days, and in some instances, weeks to the purchasing process.
The documented process was not clear, and there is a lack of visibility now throughout the process, causing unnecessary confusion and frustration.
Levels of authority had been set-up, with control at limited roles within KFTL. This also delays the process when purchasing simple, low cost items, where KFTL’s Technical Director has an approval limit of zero USD.
Cancellation of PO’s has caused some problems. Numerous PO’s reside in the system, and whilst no doubt this issued needed to be reviewed, some PO’s have been inadvertently cancelled, causing further delays to the procurement of much need spare parts, with some having to be re- ordered, leaving certain equipment unnecessarily out of service for weeks, sometimes months.
Payment process to vendors needs to be carefully understood and reviewed. A number of critical suppliers to KFTL have blocked their accounts on more than one occasion and for some significant periods of time. This has only added to the spare parts pain at KFTL today. Payment delays to customs clearance brokers has also led to their withdrawal of services, leaving parts in the terminal unable to be cleared and used to maintain KFTL assets.
TRENT ASSOCIATES 8