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Best Practice Shipmanagement Study 2013

Overview and Study Results

Digital Ship Singapore – 1 October 2013

Dominic Ng

Director

Maritime Software

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Digital Ship Singapore | 01 Oct 2013 | No. 2*Best Practice Ship Management Study* GL Maritime Software

Shipping companies use the period of industry downturn to look into internal processes – our study may help

We have asked around 100 shipping companies around the globe:

•What are the areas you are working on to improve your business?

•What have you seen in other companies you consider as “best practice”?

“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.


The best practice study serves as a guide to reflect own ideas, priorities and have a look “over the fence”

• Collection of over 50 common qualitative observation and quantitative statistics across all companies

• Derivation of 30 best practice measures in the 5 key areas of all ship managers

• Many connected context boxes with subjects that came up

A “Best practice” is not understood as recipe that fits in all circumstances to all companies.


Recap: Is ship management an attractive market to be in?

• 3-5bn USD annual fee volume for ship management services (not all 3rd

party)

• Growing fleet with

• technically more challenging assets

• underlying stricter regulations

• with more difficult to find crew and

• increasing pressure and costs and quality

• will nurture professional ship management be they 3rd party or in-house.

Growing, but... ... highly competitive

1 Clarksons Research, 2013

• More than 1500 companies are managing 10+ vessels

• Only 150 manage 40+• Many midsize and small companies in the

market


Is looking at best practice common?


Where are the biggest perceived challenges?


Results summary: Best practice in crewing

• Around 1.4 million active seafarers

• There is particular concern over current and future availability of senior officers,

especially engineers, in the Far East and Indian subcontinent

• MLC is seen largely positive despite the uncertainty about what will be really

enforced



Of all respondents are actively looking at best practice measures in crewing

1 - organizational measures

2 - process measures

3 - IT measures

69%



• Organizationally, many shipping companies re-insource crewing activities again

• Culturally, a lot of focus is given to training, development, welfare package and teamwork.

• Process-wise, re-insourcedcrewing processes need proper system support

Common observations Best practices

• Invest in culture and teamwork

• Invest in crew welfare packages

• Integrate training, appraisal and development management systems

• Use a combination of personal and computer-based training

• Use an integrated crewing solution onboard and onshore


Of all respondents are actively looking at best practice measures in technical management



3 - IT measures

65%

Results summary: Best practice in technical mgmt.



• Different organisational options are tried out, “fleet teams” becomes common

• Planned Maintenance Systems standard

• Life cycle management view with increasing importance


• Organize along processes

• Build processes around a state-of-the-art planned maintenance system

• Harmonize and centralize the management of master data

• Manage a key element of your maintenance budget: dry dockings

• Pay attention to hull maintenance

• Embrace condition based maintenance


Life Cycle Management is a growing trend in Technical Management

•82% - focus on machinery

•74% - focus on hull structures


Best Practice Ship Management Study | 12 Sept 2013 | No. 13GL Maritime Software


Two often mentioned subjects:

•Fuel efficiency / performance monitoring / emissions(to be dealt with in a separate study)

•Condition Monitoring(some common subjects have been collected as “quick guide” in the study)


Of respondents are actively looking for best practice measures in Financial Management

•1 - process measures

•1 - IT measures

•3 - organizational measures

45%

Results summary: Best practice in financial mgmt.



• Separation of finance from operations seen as issue

• Too much complexity built up in last years

• State-of-the-art finance systems not common


• Integrate Operations with Finance

• Simplify and harmonize the accounting structures

• Centralize the invoice registration process

• Harmonize and automate reporting

• Invest in cash management procedures



Growing trend towards business intelligence applications in shipping to integrate data and automate reporting


• 20% decrease in major maritime incidents since 2007 (from 1.100 to 900) after a strong increase the years before

• Increasing percentage in ports and restricted waters

Results summary: Best practice in quality & safety mgmt.


Of respondents are actively looking for best practice measures in Quality & Safety Management



3 - IT measure

45%




• Dedicated QS teams reporting to MD common

• Staff awareness on QS issues is critical success factors

• Process supporting systems start to come in


• Move from QS to QHSE

• Deploy and monitor regular crew training on safety issues

• Nurture a “no accusation / blame”culture

• Use integrated Quality & Safety solution

• Automatically produce regular quality and safety KPI reports fleet-wide

• Have risk assessment integrated in regular processes



Non-Maritime QHSE standards to look at:

•The Quality Management System standard (ISO 9001)

•The Environmental Management System standard (ISO 14001)

•The Energy Management Systems standard (ISO 50001)

•The Occupational Health & Safety standard (BS OHSAS 18001)


Results summary: Best practice in procurement

179.945

273.750

735.475519.395

837.310

955.570

Insurance

Admin

Stores / Lubes

Repair &

Maintenance

Manning

3-4.000 TEU Container

3.137.540

188.705

315.725

942.065

Panamax Dry Bulk

2.538.575

268.275

306.600

852.640

15-20.000 dwt

General Cargo

1.767.695

180.675

164.615

723.065

1 Drewry 2010

Example Ship Operating costs in USD1


Results summary: Best practice in procurement

• Organisational and process measures common to increase data quality

• Purchasers are bound into processing and have too little time for sourcing activities

• Supplier treatment changes to a more long-term partner approach


• No purchase outside the system (no “maverick buying”)

• Harmonize and centralize the management of master data

• Communicate with suppliers electronically

• Plan demands fleet-wide

• Embrace strategic sourcing activities

• Reduce number of suppliers


The role of information and communication technologies

• Shipping has in the past largely underinvested into IT (e.g. compared to Oil & Gas industry)

• Despite crisis majority of respondents do not cut back IT budgets

• Enabling function for best practices is well understood among respondents


The role of information and communication technologies

Trends:

1.IT budgets are not being cut

2.A generation change in management is lowering barriers

3.Software usage strategies vary but come closer together

4.Buying criteria are stable

5.Many implementation projects fall short of expectations

6.The need for services around software is increasing


Conclusion

Check these best practices against own operations and get inspirations and ideas for

additional improvement areas

Lots of potential for improvement in processes and tools that can make a big

difference for shipping companies

Determine what works for you!


Good fleet management solutions built in and support a lot of shipping best practices

Best practice GL Solution

Central and fleet wide management of master data (equipment, spares, jobs, certificates etc)

“Fleet Equipment register” in GL ShipManager

Use all available information to specify and execute dry dockings

New Dry Docking tool in GL ShipManager

Deploy a central purchase platform and communicate with suppliers electronically

Procurement module with e-commerce interface in GL ShipManager

Focus maintenance also on hull integrity GL HullManager

Connect available data in business systems to management reports and KPIs

GL FleetAnalyzer

Reduce the own investment into onshore IT environment

Managed Server solution

Examples


www.gl-maritime-software.com

Wishing you success...

[email protected]

Dominic NgDirector

Maritime Software

Email: [email protected]

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