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Best-practice-Ship Management PDF
Best-practice-Ship Management PDF
Foreword
Ship managers are under increasing pressure. Overcapacities in the market are driving charter rates down.
Ship owners face higher costs to finance vessels. Ship operators fight for cargo and drive down their main
cost block, which is fuel. Ship managers sit in the middle and have to look after more and more for the
same management fees to gain owners management contracts. At the same time lie the requirements
on availability of the vessels. Quality and safety of operations, management and treatment of crew and
transparency of costs spend are increasing. GL and Fraunhofer CML experts conducted a study involving
about 100 ship managing companies across the globe to find out what they are doing to improve their
operations and what they consider as “best practice” in the industry.
“Best practice” in this study comprises all approaches, procedures, business models or
tools that ship managers are using to do their business smarter, safer and greener,
i.e. to be on top of competition.
We invite the reader of this study to check these best practices against his own operations and get inspiration
and ideas on additional improvement areas. Especially in the process and supporting tools part, we see a
Iot of hidden potential that will make a big difference in costs, quality and/or speed of a ship manager.
We wish you find some interesting points in this study. Enjoy reading!
2
Introduction
Table of contents
Foreword 2
Appendix 30
Methodology 30
Company profile 31
3
Fraunhofer CML
List of abbreviations
bn Billion
EDI Electronic Data Interchange
ERP Enterprise Resource Planning
ICT Information and Communication Technologies
IFRS International Financial Reporting Standards
IMO International Maritime Organization
ISM International Safety Management
ISO International Organization for Standardization
KPI Key Performance Indicators
LCM Life Cycle Management
MLC Maritime Labour Convention
MSC Mediterranean Shipping Company
PMS Planned Maintenance System
PSC Port State Control
QS Quality & Safety
QHSE Quality, Health, Safety & Environment
SEEMP Ship Energy Efficiency Management Plan
4
Management
Yes 50%
Partly 27%
No 12%
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Fraunhofer CML
Which part of your companies’ ship management faces the biggest challenges regarding the mid-term future
(several indications possible)?
Crewing 88%
Technical
62%
Management
Financial
50%
Management
Procurement 12%
Are you actively seeking A first indication for the need of best of a company depends on the pure
examples for best practice practice is the question of which topics in number of best practices is adopts. The
as an organization? ship management are currently of par- collection should rather be seen as food
ticular interest, and for what reasons. for thought for shipping companies to
4%
improve their performance, to trigger
No
Among the top three, the surveyed discussions for areas to look at and
8% shipping companies place Crewing, assess sensible changes.
Technical and Financial Management
as the greatest challenge for the mid-
term future, followed by Quality & What are the reasons
Safety Management and Procurement.
Yes (several indications possible)?
88% We will use this ranking as the guiding
agenda for this study.
Cost pressure 62%
6
Management
Technical
Management
Quality &
Safety Crewing
Management
Financial
Procurement
Management
•• Many tanker and bulker owners Figure 6 – Size distribution of ship managers (Clarksons Research, 2013)
manage their own vessels in own ship-
ping entities and charter them out.
The market presents itself substantial Larger entities will have advantages
•• However, a significant portion of that with, despite the current challenges, a here though.
market is served by 3rd party ship good outlook. The global fleet is grow-
management companies, which pro- ing. Technically more challenging assets lf ship owners are asked what they
vide ship management services to underlying stricter regulations with more require from a ship manager, the prior-
ship owners (such as V.Ships, Anglo difficult to find crew and increasing ities lie in high reliability, low operational
Eastern or Columbia Shipmanage- pressure and costs and quality will costs, high crew quality and good com-
ment) without being a significant nurture professional ship management munication with the ship managers.
owner themselves. services be they 3rd party or in-house.
7
Fraunhofer CML
600 80
services to many shipping companies
and in-house ship managers. 500 275
184
400
In 2010 almost 1.4 million seafarers
50 Indian subcontinent
were active. The situation for global 300 112
Far East
seafarer supply and demand was one 127
200 109 Africa/Latin America
of approximate balance for ratings and
Eastern Europe
a modest shortage of officers. There is 100 184
143 OECD countries
particular concern over the current and
0
future availability of senior management Officers Ratings
level officers, especially engineers, in the
Far East and the Indian subcontinent.
Figure 7 – Current supply of seafarers by geography (BIMCO/ISF Manpower 2010 update)
8
Crewing
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Fraunhofer CML
10
Crewing
The times of Excel sheets and pinboards The “Maritime Labour Convention, with the national regulations of the ves-
for crewing activities are definitely over 2006” (MLC 2006) of the International sel’s flag state based on the MLC 2006.
for those who want to be involved in Labour Organization (ILO) will govern
crewing processes. Integrated crewing the working and living conditions on- The convention is seen positively by
software packages offer functions for board a ship for more than 1.4 million many quality shipping companies, which
all data, certificate etc. administration seafarers worldwide. It defines require- have many of the standards for their
as well as the crew planning and sched- ments concerning occupational health crew in place anyhow, as it prevents
uling, (automatically) matching manning and safety, fair employment contract unfair shipping practices and competi-
requirements with available crew for conditions, adequate accommodations tion on the back of crew. The real
the next months. The integration also as well as access to medical care, health effect on administrative burdens and the
links up processes in-house with local care and social security. The new enforcement of e.g. Port State Control
crewing agencies that work in the convention brings together more than needs to be seen. Many shipping
same system, receive requests for open 60 existing ILO standards. When the companies use their MLC projects to
positions, enter all master data etc. In Convention enters into force, in August review their crew-related processes and
addition, upcoming MLC requirements 2013, all international merchant ships information flows and implement a
need a further proof of compliance, i.e. of 500 gross tons or more will be supporting IT system that helps to get
documentation that is best prepared obligated to carry a Maritime Labour the right information to the right place
and managed electronically. Many ship Certificate and a Declaration of Mari- and keep their crewing experts focusing
managers get ready for MLC process- time Labour Convention compliance on finding good crew, not typing data
wise and use this change to implement onboard, documenting its compliance from A to B.
an electronic crewing system, as it
achieves two goals in one go.
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Fraunhofer CML
12
Technical Management
The in-depth interviews conducted in •• Planned maintenance systems are Based on the interviews of this study
the course of this best practice study clearly a central part of the increas- and research conducted by GL and
revealed a number of similarities across ingly integrated process and IT Fraunhofer, we would summarize key
ship managers: landscape, but the innovators in the elements of best practice in Technical
ship management community look Management:
• • Many ship managers move away
beyond. Life cycle management,
from a pure vertical organization to
hull integrity and condition based
a more process-based one. The best
known example are the so-called fleet
maintenance concepts, expecting Organize along processes
further cost efficiencies and uptime
teams, where technical, purchasing, Human behaviour in business follows
improvements.
crewing and/or accounts experts sit a lot of organizational boundaries
together in one organizational unit to •• With cost pressures rising and forcing and structures, despite the everywhere
serve a certain number of vessels. comprehensive approaches, this life seen work on a collaborative company
cycle management increasingly fo- culture. Organization still matters and
•• The days of paper-based workflows
cuses on hull and structures as well, many ship managers move away from
in ship management are gone. The
beyond the traditional machinery- a pure vertical organization to a more
increasing complexity of commercial,
based approaches. The challenge process-based one. The best known
regulatory and other challenges
here is to stay close to the vessel example is the so-called fleet teams,
seem to leave ship managers with no
itself, despite the administration where technical, purchasing, crewing
option but to build their processes
around it. As one respondent put it: and/or accounts experts sit together
around IT solutions that “cut” across
“We all have focused too much on in one organizational unit to serve a
units and departments and provide
‘papers’ and we are asking every certain number of vessels. This reduces
consistent and “real time” informa-
day for more and more paperwork, interfaces and waiting times, gives clear
tion to the many stakeholders. Most
forgetting the ‘hardware’, i.e. ship’s ownership and accountability of results.
ship managers see IT investments
structure.” It is also easier to put clear KPIs to those
increase even in these commercially
teams and trigger process improvements
challenging times.
within the teams.
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Fraunhofer CML
Build processes around a and central responsibles. Individual users Pay attention to
state-of-the-art planned are blocked from changing master data hull maintenance
themselves. ln this manner, ship man-
maintenance system agers typically reduce the number of Attention of the Technical Management
Although planned maintenance systems maintenance jobs to a manageable size team onboard and onshore is largely
(PMS) have become commonplace or combine tasks to real jobs. 500– paid to all machinery equipment
across the industry, the way they are 1,000 recurring jobs are often enough onboard. For many good reasons:
used differs. A PMS is much more per vessel. Many jobs need to be done according
than just an onboard documentation to manufacturer specification, there is
of jobs. The use of the PMS as a central a Iot of “wear and tear”, systems and
communication platform for all techni- Manage a key element of procedures fit well to machinery parts,
cal matters and tasks in a shipping your maintenance budget: the persons in charge are “engineers”
company is a first best practice. This (not naval architects). Often, the “hull
not only reduces calls and e-mail traffic,
dry dockings maintenance” (and structures main-
but creates a central task Iist for all Dry dockings are the biggest chunk in tenance) rests on the surveys of class
people onboard and onshore. Planned a ship manager’s maintenance budget. societies.
maintenance systems of today are However, most ship managers report
highly integrated with procurement / that a 20–30% cost overrun to the dry ln the dry dock at the latest, the neg-
purchasing systems and quality and dock budget is rather common than ligence of the steel structure becomes
safety software systems both process- an exception. Several measures are apparent and creates unwanted cost.
wise and data-wise. All three functions attempted to improve that situation. This can be avoided by a more structured
typically come from the same vendor hull integrity management approach.
to reduce interfaces and issues around Not the superintendent for that vessel This typically comprises regular visual
updates / upgrades. These systems but special and dedicated (teams of) inspections of all compartments and
include maintenance planning as well superintendents take care of all dry ratings according to different criteria
to ensure that skills, spares and time docks across the fleet. This allows a (such as coating, corrosion, deforma-
are available before the voyage. better building up of competencies tions and cracks), the specification of
for that field. failures and assignment of short-term
maintenance measures (e.g. recoating
Harmonize and centralize the Personal visits to the vessel to prepare of an area), to prevent structural defi-
management of master data the dry docking specification often are ciencies from getting worse until the
employed. In best practice organizations, next dry dock. Very often, hull integrity
Many ship managers have learned their specific dry dock tools are introduced systems are implemented to support
lessons how freely it allowed their techni- that collect all technical information, this process and combine this information
cians to put equipment or maintenance specify a tender, come to final orders with the mandatory thickness measure-
job data into the PMS. At the end, for the yard and the equipment ments. As one respondent put it:
each vessel, even technically identical manufacturers and allow the project
sister vessels, looked different and any management on site for the dry dock “Best practice integrates these hull
synergies in managing a fleet get lost team. Especially in the dry dock prepar- integrity tools with the PMS used and
or at least harder to uncover. Today ation one deficiency becomes often are accessible onshore and onboard.”
equipment and planned maintenance apparent. How much does the shipping
data are entered and managed fleet or company know about the condition of
vessel-group wide via a central source the steel structures?
14
Technical Management
Conferences are filled with condition comparing them to warning and Extend the view across
monitoring and condition based main- alarm Ievels of the manufacturers. the vessel’s life cycle
tenance expert advice. However, ship The method is proven and reliable,
managers’ and experts’ views can be the set-up is easy. Systems are avail- Common in the manufacturing industry,
condensed in a few key aspects: able to support this. the view across the complete life cycle
of a product becomes more important
•• Trust your visual inspections: Looking, •• Do regular oil analysis: The information in shipping today. The effectiveness and
listening, smelling or manual mea- received from it tells you a Iot about suitability of an equipment or system
suring has always been a trustworthy your main engine, if you capture the re- is not decided at the purchase but
source of condition information to sults from the laboratory systematically. over its lifetime, taking into account all
the engineers onboard. To enhance maintenance and repair efforts, possible
using this data, an electronic capturing •• Enrich your Information base with off-hire hours and other costs involved.
to allow trend analysis or comparisons some performance measures: For this the right information sources
might be added. As the crew cannot Pressures and temperatures already need to be built and maintained. Often
be everywhere at the same time, measured somewhere put into the today this knowledge sits in the head of
we observe intensified use of simple right context can enrich the above experienced chief engineers or superin-
digital cameras to monitor a room gained information. tendents, with the risk that this is more
or equipment. anecdotic than systematic.
Only if you did this, putting more sensors
• • Take vibration measurements: and cables for e.g. crank bearing wear
Rotating auxiliary machinery can best analysis or monitoring of combustion
be condition monitored by taking chamber parts and other online mea-
regular vibration measurements and surements will make sense.
15
Fraunhofer CML
16
Financial Management
In general, liquidity drains can be seen Simplify and harmonize the •• This chart of account should not be
much earlier, giving the company more accounting structures “misused” to fulfil any reporting
leeway e.g. to secure further funds. need you have. From a management
Extending the focus also to operational Shipping companies often work with a accounting perspective, it should only
figures, the company gets a much more large number of legal entities, having to hold the cost elements like personnel,
complete picture of its commercial pos- work with and to report to many owners spares, lubes, insurance, travel etc.
ition and its exposure to certain market and charterers in different environments. costs, which will keep the chart of
circumstances, enabling the company The more important it gets to simplify account handy. You end up with
to define hedging strategies against the accounting structures: much more simplicity if you use cost
dangerous scenarios on time. On a centres (where is the cost located, e.g.
more micro perspective, it also helps in •• Use a harmonized chart of accounts a vessel or a department) and cost
calculating KPIs measuring the quality that is valid for each legal entity and objects (why do these costs incur, e.g.
and effectiveness of the company’s is administered centrally with a clear a voyage or a contract with an owner)
day-to-day activities in order to identify guideline on what to post where. Al- as additional dimensions. Modern
room for improvement. though some minor differences might accounting programs handle a vast
exist for local accounting standard number of such financial dimensions.
This will also foster the much needed reasons, 90% can be harmonized.
•• Last but not least, management ac-
close cooperation between the Finance Integrating all group companies on
counting should follow legal account-
department and all other departments a single accounting platform with
ing standards, so a second (internal)
immediately involved with vessel’s day- worldwide access under a standard
evaluation e.g. for a financial instru-
to-day operations. group chart of accounts will speed
ment or depreciation should be avoided
up the process of preparing group
(“One true number”). The now widely
A last integration area is planning and accounts extremely, e.g. by defining
spread tonnage tax systems all across
forecasting with the actual figures and standard intercompany transaction
the world also eliminate the need
the actual operations throughout the accounts and automatic intercompany
for different accounting practices for
year. To ensure you report on items you posting, which can be eliminated in
commercial and tax depreciation and
have planned to be able to compare, group accounts later easily without
other tax-related issues, so establishing
to easily produce forecasts on the year any manual intervention. This is also
“one single version of the truth”
end throughout the year and to do so supported by slimming down the
additionally covering the management
without “Excel monsters” is a definite extent and the level of complexity
reporting is becoming standard – this
best practice. of intercompany transactions.
also includes harmonization of e.g.
IFRS and local GAAP accounting
wherever possible.
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Fraunhofer CML
18
14
Financial Management
19
Fraunhofer CML
With the rise of regulations and com- The number of yearly maritime incidents Maybe this improvements is the reason
petitive pressures, the role of dedicated is showing a downwards trend, after a that only 45% of the respondents
Quality & Safety (QS) or even Quality, period of strong yearly increases during actively look at best practice measures
Health, Safety & Environment (QHSE) 2000–2007. While more than 1,100 cas- in Quality & Safety measures, of which
officers has increased significantly. ualties were officially reported in 2007, again the majority is organizational (79%
Whereas the safety part is typically not a little more than 900 were counted of respondents) and process (73% of
disputable, as it is about colleagues’ in 2011. An increasing percentage of respondents) related. 58% of the
health and life, the quality part of the maritime incidents occurs in ports or respondents also look at IT measures.
role always has to find the right balance docks or in restricted waters, whereas
between helping the operative work to the share of incidents at sea is decreas- In the in-depths interviews, we could
improve quality without overly increas- ing, according to casualty statistics in again see some similarities among all
ing administration. Looking at some 2011. For 2012, the same trend is being participating ship managers:
statistics, fires and explosions are still the observed.
3rd largest reason for the total loss • • The set-up of dedicated Quality &
of vessels and in 5th place among all This trend is also valid looking at the Safety (QS) teams that report directly
reported accidents at sea. With regard total number of ship losses, which has to a senior executive or the CEO of
to PSC statistics, the lack of fire safety decreased from 177 in 2001 to 106 in the shipping company has found its
onboard remains in 1st place and 2012, the reasons though remained way throughout the industry. Many
contributes to every 5th detention relatively stable. respondents stated that the most ex-
of vessels in port. perienced and best personnel should
What does Port State Control often find? Where do maritime incidents happen?
6% Ship’s 5% SOLAS-related 1,145
certificates & operational deficiencies
documents 103
Load
lines 76
934
5% Fire safety
143 84 Other locations
measures
19% 80 Restricted waters
MARPOL 107
Estuary/river
Annex1 335
7% In port/harbour/dock
286
ISM-related
At sea
Safety of navigation deficiencies
8% 15%
20
Quality & Safety Management
be given these tasks. This gives the Move from QS to QHSE Deploy and monitor regular
important subject the visibility and crew training on safety issues
As environmental and occupational
the professionals the power they
health subjects become more and more
need to accomplish their tasks. The More than everything else, the quality
important, the scope of QS departments
influence and budgets assigned to the and safety of operations depends on
widens to Quality, Health, Safety &
QS teams have increased significantly crew awareness, which is kept on a
Environmental (QHSE) matters. The
in the last years. However, there high level by continuous training and
benefit lies not only in additional subjects
is the feedback that there is some information. The means are many –
getting attention, but also that combined
frustration from the operational from simple weekly update “pictures”
procedures ease implementation as
teams that QS has not developed to complete computer-based training
well as reduce conflicting information
beyond guidelines and manuals in programs. Given that messages need
and paper being given to the crew.
many cases. to be sent to more practical than aca-
Respondents recommend that industry
demic staff, less text and more pictures
•• The critical success factor is awareness certification schemes, not only manda-
are the preferred mode.
of the individual crew member that tory ISM / ISPS or MLC but also ISO
he can make a difference in both 9001, 50001 and OHSAS 18001, help
directions and all focus of a Quality & to establish integrated and state-of-
Safety management system is directed the-art procedures. Not only give they
to this. A lot of creative ideas could good guidance but prove compliance
be identified in getting Quality & to the highest degree in an increasingly
Safety issues into the minds of seafar- competitive market.
ers. Formal training schemes with the
superiors or with video or computer-
based material are possible, but also What caused shipping losses in 2012?
simply a regularly changing picture 2% Collision (e.g. harbour wall)
in the crew area of the last accident 1% Miscellaneous
happening in the fleet, which is 5% Hull damage (holed, cracks etc.)
selected and explained by the QHSE 6% Machinery damage/failure
officer. 6% Collision (involving vessels)
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Fraunhofer CML
Nurture a “no accusation / amount of paper, forms, checklists and developed? What have been the major
blame” culture reports that can no Ionger be processed causes of near misses? What incidents
manually. The solutions typically com- have caused environmental damage?
Quality and especially safety improve if prise a complete onboard–onshore With proper process automation, the
there is an open culture among all staff reporting for all findings and incidents, production of such KPIs in a state-of-
to name issues without accusing some- structured descriptions, conditions, the-art reporting and analysis solution
body. Especially pinpointing a “near root cause analysis functionality, fleet- (often called Business Intelligence Solu-
miss” and discussing how to avoid it the wide action tracking etc. A key part tions) is no Ionger a time consuming
next time is challenging, if everybody of the Safety Management Manual Excel exercise but is available at a mouse
involved feels bothered or even blamed becomes electronically available and click. The time can much better be used
for something. All senior staff together manageable. Other functionality that to understand the information given
with the QHSE expert depend on this supports QHSE professionals are and derive the right actions from it.
culture and need to invest in a com- certificate (expiry) control, document
mon understanding that avoiding any handling and onboard distribution,
incident is worth openly discussing any drills and trainings planning and control. Have risk assessment integrated
improvement areas in Quality & Safety All the available data are used for a in regular processes
together and not because somebody comprehensive and up-to-date reporting.
did it wrong. Although mandatory in the ISM code
for some time now, there is still uncer-
Automatically produce tainty how to best conduct and docu-
Use integrated regular quality and safety ment risk assessments onboard. Best
Quality & Safety solution practice is a close integration with the
KPI reports fleet-wide processes that need these risk assess-
Process support for QHSE departments Many QS departments use comprehen- ments, e.g. critical inspection or cargo
has in the last years come to some sive KPI reporting as a key management operation. Again, if additional paper
broader usage and acceptance. On tool to assess performance of the fleet is to be avoided, integration in the QS
the one hand because good tools are and the impact of taken safety mea- solution is helpful. Documentation is
available, on the other hand as QHSE sures to the performance. How have then done automatically and keeping
professionals see an ever-increasing the accidents or non-conformities an overview becomes easier.
22
Quality & Safety Management
Management systems as laid out in •• The Environmental Management at improving the energy performance.
different certification standards, if System standard (ISO 14001) sets With the requirements to reduce
introduced and managed properly, help criteria for an environmental manage- emissions from shipping and rising
to keep good processes in place that ment system to use resources more bunker prices, this standard becomes
produce quality services and to show efficiently, produce environmental a high attention from shipping com-
that to their customers at the same time. products and services and compliance panies at the moment.
A few key non-maritime standards find with relevant legislation. It ensures
their way to shipping companies that that that environmental impact of an •• The Occupational Health & Safety
are worth to look at: organization is being measured and standard (BS OHSAS 18001)
improved. promotes a safe and healthy work-
•• The Quality Management System ing environment by looking after
standard (ISO 9001) is the most •• The Energy Management Systems a management system that helps
widely used management system standard (ISO 50001) should help an organizations to consistently identify
certification today and looks after how organization to follow a systematic and control health and safety risks,
companies produce quality products approach in achieving continual reduce the potential for accidents
and services while meeting the needs improvement of energy performance, and aid legislative compliance. It
of other stakeholders and comply to including energy efficiency, energy was developed outside of the ISO
regulations. For shipping companies, security, energy use and consumption. schemes above but allows it to inte-
it makes sense to combine this certifi- While the ISO 9001/14001 standards grate well into the larger system of
cation with the ISM / ISPS certification, are looking at improving a manage- ISO certifications.
as there are overlaps / synergies to ment system, the ISO 50001 is raising
be taken advantage of. the bar by actually looking
23
Fraunhofer CML
€
make everybody work within the
3,138 processes remains challenging. Also,
What is spent to operate a vessel p.a.? data quality is still a big issue to
many shipping companies to reduce
€
2,539
942 Manning
wrongly ordered parts or a lot of
communication with the supplier.
€
853 for real sourcing activities that also
1,768 involve proper demand planning,
Repair & which is supported by organizational
956
maintenance
adoption of purchasers’ roles. Although
723 this is seen by many respondents, the
837
way to this is still long, as day-to-day
activities consume too much time
735 Stores / lubes
519 from staff.
274
180
• • Increasing reliability and quality de-
307
316 Insurance mand will also change the treatment
165
181 268 189 Admin of suppliers to a more long-term,
less transactional manner. Even if the
15,000–20,000 DWT Panamax 3,000–4,000
general cargo dry bulk TEU container
majority sees this change of suppliers’
Figure 12 – Annual operating budgets for a vessel in K€ (Drewry, Ship Operating Costs 2010–2011)
24
Procurement
role happening, there seems to be No purchase outside the Increase of total ship operating costs in %
a cultural difference in regions where system (no “maverick buying”)
bargaining each transaction is per- 7% 6.7 6.7
ceived as the purchaser’s value to the The days that purchasing is done by fax
6%
company. and phone are definitely over. Software
systems are commonplace and for ship 5%
• • Another common result of a more
managers they need, as said above, to
long-term and strategic view on
be closely integrated with the Technical 4%
3.4
procurement is the extension from a 3.3
Management information, i.e. spare
Large dry cargo ships
1%
not only includes materials and ven-
a system-generated purchase order for
dor management, but also the whole 0
all things purchased. lnvoices will not be
transportation, storage, material and 2011 compared to 2010
accepted without prior purchase order.
information flow part, which can be Figure 13 – Annual operating budgets
These procedures not only enforce
optimized to a shipping company’s development per ship type (Drewry,
approvals for purchases and give early
benefit. Ship Operating Costs 2010–2011)
indication of committed expenses. They
Based on the interviews of this study also keep the Procurement department
and research conducted by GL and involved and a chance to consolidate
Fraunhofer, we would summarize key demands from different angles of the
elements of best practice in Procurement: organization in a professional way.
25
Fraunhofer CML
Harmonize and centralize the Automate and simplify Communicate with suppliers
management of master data the process electronically
Following the best practice in Technical If the master data are set up in the Unlike in other industries, shipping has
Management a central and harmonized background, the purchasing process not yet found a standard for electronic
management of spare parts, supplies can be simplified, reducing the manual data interchange (EDI) that exchanges
and services as “articles” in the system, correction needs for the purchaser. A messages (inquiries, orders, invoices)
supplier trade agreements and storage request from board is based on specific electronically from the procurement
information is a key foundation of any articles, leaving no room for interpreta- system of the ship manager to the sales
professional purchasing work. There tion. The superintendent can approve system of the manufacturer. However,
are defined processes for setting up the request in the system. Many ship this is a clear best practice in many
which master data with approvals and managers allow direct purchases for shipping companies that have found
four-eye principles (e.g. for supplier small ticket items from board to the individual solutions with their key
bank data). The ship management supplier (within the system), keeping suppliers. With the rise of the Internet
company uses fleet-wide standard cata- this away from further processing in the in the last decade, the popular e-com-
logues for any supplies and “templates” office. Order, delivery note and invoice merce marketplaces could take over
or “articles” for recurring services. match together. The mere invoice that role of managing the electronic
Spare parts are the same across vessel registration enables this fully automatic communication with suppliers, next to
groups. Supplier information comprises “3-way match” to post the invoice. their original purpose, which is provid-
commercial conditions and trade agree- Manual checks and approvals are only ing access to a global supplier base
ments. There is a harmonized storage needed if deviations occur. for better quotations.
management across the fleet.
26
Procurement
27
Fraunhofer CML
Figure 14 – Role of ICT in implementing Figure 15 – Role of ICT in implementing best Figure 16 – Main opportunities in using ICT
best practice today practice in future
28
ICT
As main opportunities seen in using ICT, 2. A generation change in 5. Many implementation pro-
respondents state seamless information management lowers barriers jects fall short of expectations
flow, better decision support and
integrated solutions as highest ranked, A younger management generation has Expectations on a software implemen-
which confirms many of the stated best low to none barriers to computers any- tation project are high: higher transpar-
practices above. Other opportunities more. Having grown up with them they ency, process efficiency, less interface
seen are cost reduction by reduced are, in contrast, surprised how much communications, better compliance
personnel, employee motivation or purely paper-based processes they find are all seen as results of successful
planning capabilities. in a traditional shipping business. implementations. However, the internal
effort involved is often underestimated.
However, to reach these goals a set of And more than the functionality of
challenges is commonplace. Not surpris- 3. Software usage strategies the different solutions does the imple-
ingly, usability is ranked highest here, vary but come closer together mentation support make a difference
which is often a main hurdle for crew to at the end.
be better integrated into IT-supported Shipping companies either look for
processes. The second key challenge is one integrated solution or follow the
the management of master data, which “best of breed” approach (each func- 6. Need for services around
is supported by many best practices tion from a different vendor), they rely software is increasing across
above. Other challenges mentioned on in-house developments or mix these
are training, integration into existing strategies. However, with better solu-
the board
systems and language barriers. tions in the market, a moving away from Following this, there is an increasing
in-house developments and towards need for services such as implementa-
The picture of the role of IT is com- more integrated solutions from one tion and integration support, process
plemented by two market snapshots vendor can be observed. consulting and decision support.
in 2009 and 2011 with approx. 200
shipping companies across the globe
in which some clear trends can be 4. The buying criteria are stable
established.
Key buying criteria have and will be qual-
ity of the product (content and technol-
ogy-wise), reputation of the provider, its
1. IT budgets are not cut back service orientation, user- friendliness and
Despite costs pressures across the board, value for money. Simply a low price is
more than 80% of respondents do not rated as becoming less important, as it is
cut back on their IT budgets, half of often paid twice in the long run. How-
them will even increase the investment ever, respondents admit that price is so
level into software technologies. easy to compare.
29
Fraunhofer CML
Appendix
Methodology
The base for this study was twofold: In total, responses and interviews of geographical locations and functions
more than 80 shipping companies could of respondents in shipping companies
•• Numerous expert interviews and dis-
be used for this study. During this phase, could be achieved. We would like to
cussions from GL professionals around
the anonymity of the questioned persons thank all participants and contributors!
the globe in the full last year 2012.
and their corresponding companies as
•• An electronically submitted question- well as the privacy policy was preserved
naire that was filled out by decision- to the full extent by GL and Fraunhofer
makers from shipping companies. CML. A good mix of company sizes,
30
Study contributors
Company profile
Who has been questioned? Fraunhofer CML GL
Participants – type of ship manager The Fraunhofer Center for Maritime Germanischer Lloyd (GL) offers clas-
Logistics and Services CML conducts sification services of plan approval,
8% Wholly professional contract research for inspection and certification of materials
11%
in-house private- and public-sector clients in the and components as well as technical
Semi- maritime industry, including ports, termi- assessments of ships in service. Its Mar-
11% independent nal operators, shipping companies and itime Solutions unit supports customers
69%
Independent logistics service providers. around the world through software
3rd party solutions, management systems certifi-
n/a The Fraunhofer CML is part of the cation and training as well as consulting
Fraunhofer Gesellschaft zur Förderung and engineering services. GL’s experts
Figure 19 – Participants – type of ship manager angewandter Forschung e.V., consisting serve as advisors to governments, the
of 80 research facilities with a total of IMO, flag and port states. The group
Participants – company size 22,000 employees. is committed to a smarter, safer and
greener future of shipping.
Managed ships
0–50
4% www.cml.fraunhofer.de www.gl-group.com
50–100
19% >100
n/a
58%
19%
Management staff
0–50
Study contributors
12% 50–100
>100
31
Germanischer Lloyd SE
Brooktorkai 18 · 20457 Hamburg, Germany
Phone: +49 40 36149-0
headoffice@gl-group.com
www.gl-group.com
Hamburg
Your contact
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0E845 · 2013-04-01
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