Enabling Data Analytics in the Mcarine Industry (1)

8/10/2019 Enabling Data Analytics in the Mcarine Industry (1)

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Ensuring maximum value from shipboard data

Rob Bradenham Jeremy Wilson

September 2014

Copyright September 2014 ESRG Technology Group


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Copyright 2014 ESRG 2

Table of Contents

Executive Summary ............................................................................3

Overview of the industrial internet of things (IIoT) concept ................5

Value of the IIoT in Marine Industry ...................................................5

Maintenance ............................................................................................................................................. 5

Fuel and Energy ......................................................................................................................................... 6

Environment ............................................................................................................................................. 7

What does the IIoT look like today? ...................................................8

Implementation .................................................................................8

How owners should think through investments ....................................................................................... 8

Define objectives ...................................................................................................................................... 9

Identify needed Data and Information ................................................................................................... 10

Select Equipment and Determine Equipment Integration Plan ............................................................. 11

Open standards to share data across machines ..................................................................................... 12

Data Sharing and Ownership .................................................................................................................. 12

Retrofit sensors and integration ............................................................................................................. 13

Communications bandwidth ................................................................................................................... 13

Integrated or stand-alone solution ......................................................................................................... 13

Security ................................................................................................................................................... 14

Value of Data vs. Information ................................................................................................................. 15

Flexibility for Custom Applications ......................................................................................................... 15

What types of specifications should be demanded during new-build process? .................................... 15

Conclusions ...................................................................................... 17

About the authors ............................................................................ 18

About ESRG...................................................................................... 18

Endnotes ......................................................................................... 20


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Executive SummaryUsing data analytics to improve shipboard

operations and maintenance has the potential to

create billions of dollars of value in the marine

industry today and even more in the future. Thisindustrial internet of things (IIoT) concept,

connecting machines and using automated data

analytics along with domain expertise to

optimize operations and maintenance, has

already created significant value in many

industries like power generation and commercial

aviation and is now becoming a reality for the

marine industry. While the opportunity across

industries will exceed 10 trillion dollars per year

in the next 15 years, the opportunity for asset

owners, operators and managers to reducecosts, improve fuel efficiency, and increase

uptime and reliability is approximately 20 billion

dollars today and will exceed 50 billion dollars by

2030. Potential annual value creation for

individual ships could be as high as $1M or

greater when considering potential fuel savings,

optimizing maintenance, decreasing downtime

and increasing utilization1.

While the potential value is clear, it is less clear

to owners, especially those unfamiliar with

technology being used in the marine space and

other industries, how to capture this value.

Vessel owners need to think carefully about

what are the right investments to make, both

during the new-build process as well as for

retrofits. Owners need to think through what

their objectives are today compared to what

they might be in the future, as well as compare

solutions and technologies that are available

today with what could come in the future.

Making the right investments today will help

increase the Return on Investment in both in

new build situations and retrofits by ensuring theinvestment is minimized and the return is

maximized.

This opportunity exists across marine sectors,

ranging from super-tankers to inland tugboats

Figure 1: Value of using automated analytics to optimize operations and maintenance for large cargo vessel


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and offshore platforms. The value potential

includes fuel and maintenance savings, increases

in uptime and productivity and decreases in risk

associated with non-compliance, specifically with

regards to environmental regulations. Recent

fines for environmental regulations have

commonly been over one million USD, with some

fines in excess of ten million USD.2 Figure 1 lays

out major value creation levers for a large cargo

vessel (e.g., tanker, container, roll-on roll-off,

etc). While newer vessels will have the greatest

potential value creation due to existing sensors

and technology infrastructure, there are likely

between 20,000 and 30,000 vessels in the

current global fleet which will likely have an

attractive ROI, provided the right investment

decisions are made3. Many of these vessels

already have sufficient sensors and a robusttechnology infrastructure making the required

investment minimal. The value gained from the

existing onboard data will enable substantial

improvement in how the business is operated.

While there is tremendous value at stake, it will

also take individual owners and operators time

to fully capture the value. In the mean-time,

before performance analytics are fully

incorporated into all business processes, even

partially capturing the value in the short term

will be attractive to many owners and operators.

This white paper walks through how a ship

owner should think about potential investments

in technology and data analytics for their new

and existing vessels. The basic principles for

technology investment for new builds and

existing assets are the same; how they are

applied is where there are often different

decisions made. Owners need to think about

several different aspects of the ship, ranging

from what data is needed to accomplish both

current and future objectives, what level of

technology infrastructure is needed onboard,

what non-engineering data is needed and of

course how is the ship connected to the cloud or

shore systems. There are many decisions that

need to be made and requirements that need to

be defined. Often, in a new build situation,

many of these decisions are being made

implicitly without strategic direction from the

owner, potentially resulting in costly problems in

the future. This white paper is meant to follow

the authors previous white paper, Bringing the

industrial internet to the marine industry and

ships into the cloud4and presents a framework

for thinking through these issues in a

comprehensive way to maximize ROI today and

in the future. The previous white paper provides

more detail on the value of the IIoT concept and

sector specific applications of the IIoT.

For many organizations, the IIoT presents an

opportunity to increase profitability, provide

greater customer value and create

differentiation in the market. Owners are

making investments in expensive, complex

equipment with the expectation that theequipment will perform for many years or even

the life of the vessel. As the complexity of the

equipment increases, using data analytics is

necessary to determine the condition of the

equipment and ensuring proper operation and

maintenance. For those who do not proactively

begin to incorporate data analytics into their

decision making and operations, there is a risk of

becoming less competitive in an increasingly

challenging market.


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Overview of the industrial

internet of things (IIoT) conceptThe IIoT concept is quickly transforming into the

next industrial revolution. It is becoming more

widespread across a variety of industries frompower generation and healthcare to commercial

aviation and manufacturing.

McKinsey & Company estimated that in 2025,

the industrial internet will be creating 2.7-6.2

trillion dollars per year of value5. Cisco has

estimated that the internet of things would

connect 50 billion devices and create over 14

trillion dollars of additional profits over the next

decade in increased productivity6. General

Electric estimated the market for industrial

internet technology and services to grow to

$500B by 20207.

The basic concept is connecting machines with

each other and with people to get more out of

assets, help people be more productive, make

supply chains more efficient, enhance customer

experience and drive innovation. There are

three primary components of the industrial

internet. General Electric, in their recent

whitepaper Industrial Internet: Pushing the

Boundaries of Minds and Machines definesthese as: Intelligent Machines, Advanced

Analytics and People at Work8.

Newer ships launched recently are equipped

with more sensors, providing performance and

condition data that can be used to operate and

maintain equipment at a higher performance

level and lower cost. This wealth of data, while it

can create value, does create a challenge as it is

overwhelming without analytical tools. For

example, a new vessel today might have over1000 data points, which would create 2.6 billion

pieces of data over a month. When extrapolated

across a fleet of 100 assets, this equals more

than 3 trillion data points per year. Software

analytics can integrate a variety of data sources

in a variety of formats and use automated

algorithms to help users make sense of the data

turning it into actionable information. Lastly,

new information is consumed by people as they

make more informed decisions ranging from

planning maintenance to optimizing equipment

configuration to prioritizing resources across an

enterprise. To transform the data into

actionable information, people involved need to

have domain expertise in how the machines

operate, how the business works, and how to

analyze data. These people need access to the

data and information through multiple channels,

including web, mobile, intelligent reports, and

enterprise applications.

Value of the IIoT in Marine

IndustryThe marine industry stands to reap significant

rewards from applying the IIoT concept. Like

other industries, improvements can be expected

in fuel and energy efficiency, reliability and

availability of assets, worker productivity, value

delivered to the customer, and greater supply

chain and logistics efficiency. While the high

level components of the value proposition are

common across the marine industry, magnitude

differences exist across market segments.

Maintenance

With assets operating all over the world,

including some of the most remote locations on

the planet, the potential value created by

improving how maintenance is conducted is

higher than in industries with greater asset

concentration and easier access. Any

improvements in maintenance planning and

moving more maintenance from unscheduled to

scheduled will help to reduce all costs associated

with emergent work, which are magnified whenassets are greatly dispersed and in remote

locations.

The marine industry also operates increasingly

complex assets. It brings together equipment

manufactured by multiple OEMs and requires a

very diverse skill set to operate and maintain.


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This complexity, combined with the continued

pressure to reduce crew size and costs, creates a

mismatch between the skills required to

successfully operate and maintain all of the

equipment, and the skills and experience that

the onboard crew possesses.

In addition to geographic remoteness and asset

complexity, executing in-depth maintenance

often involves putting a vessel into dry-dock.

This is a significant expense, both in terms of

cost of dry-docking the vessel as well as the

downtime created. As such, there is a significant

incentive to ensure that all maintenance to be

completed during the dry-dock period is

understood and can be planned prior to the

vessel entering dry-dock in order to avoid

expensive delays and penalties by extending the

period in dry-dock. This increases the incentive

to have a thorough understanding of the

performance and health of all of the equipment

onboard on a continuous basis.

Applying the IIoT concept to marine

maintenance will enable a shift from the

operate-break-fix paradigm to a predict-

optimize-prevent paradigm. This shift will help

reduce maintenance costs (preventive

maintenance instead of high-cost overhauls or

replacements) and reduce operational

downtime. Condition Based Maintenance (CBM)is often referred to in the marine industry as the

next shift in maintenance philosophies and the

IIoT concept is necessary to effectively move to

CBM. In addition to CBM, this also enables

Condition Based Operations. CBO is focused on

the optimize step in predict-optimize-

prevent. By enabling operators to use

information produced by their equipment and

analytics to make better real-time decisions,

operators can better configure and operate their

equipment to maximize reliability today andoptimize total cost of ownership, including

maintenance costs, in the future.

Fuel and Energy

The marine industry brings together the

complexity of both power generation assets

(main engines, generators) and energy

Figure 2: Potential value of analytics in the marine industry


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In contrast to fuel and maintenance incentives,

almost all stakeholders are incentivized to

ensure environmental compliance. While value

to an individual ship-owner or charterer is likely

to be less than potential fuel or maintenance

savings, environmental compliance is likely to be

an initial driver for many owners, managers and

charters to make investments in the technology

onboard their vessels.

What does the IIoT look like

today?Many owners are already moving in this

direction, whether they realize it or not. There

are many standalone and integrated IIoT

applications that are being used with greaterfrequency across different sectors in the marine

industry. For example, many owners/operators

are using more operations decision support tools

to do things like optimize trim, optimize voyage

planning, plan a route optimally using weather

data. Others are using higher level applications

to help manage their fleet position and

performance or do remote troubleshooting.

Others still are using remote equipment

monitoring to better understand equipment

health and better plan maintenance. Many ofthese applications are stand-alone applications,

while some are integrated with other onboard or

shore-based applications.

ImplementationThere are several challenges that will need to be

overcome for the broader IIoT: increased sensors

and smarter equipment, increased bandwidth to

share data, open standards to communicate

across different types of equipment and systems,more advanced analytics, and availability of data

scientists with the skills and domain expertise to

turn that data into actionable information.

These same high level challenges are essentially

the same as those facing the marine sector in the

adoption of the IIoT, however, the details of

what enablers will help overcome these

challenges vary from other, traditional land-

based industries.

Vessel lifecycle is an important factor in how the

IIoT is adopted in the marine space. New vessels

are often being built with significant sensors and

a strong technology infrastructure. This willmake it easier for data to be consumed by

analytics applications to convert it into

actionable information. Onboard new builds,

the required investment could be very low,

enabling fast payback times and therefore fast

adoption of the IIoT concept. Older ships,

without electronic engines and fewer sensors,

will face a different required investment than

newer ships with built in sensors to capture

value. Owners of older, existing ships must

weigh the increased investment in sensors, dataintegration, networking and communications

with the potential return. While the benefits will

likely significantly overcome the required

investment for higher value assets, it will be less

clear cut for older, lower value vessels with little

existing technology infrastructure.

Based on an analysis of the approximately

100,000 ships in the global fleet today, there are

20,000 - 30,000 ships sailing the oceans that

already have some technology infrastructure in

place and would be able to easily justify theinvestment required to start taking advantage of

the onboard data. This number is expected to

grow at 3,000-7,000 per year, with most new-

builds incorporating a solid technology

infrastructure during construction.

How owners should think through

investments

Instead of making individual investments in

individual solutions, owners should conduct amore comprehensive and holistic assessment of

their needs and what the optimal solution is to

achieve those needs. First, owners should start

by clearly defining and understanding their

objectives. Once objectives are defined, then

the owner needs to identify the data and

information that is required to measure


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performance against those objectives as well as

enable operators and managers to make better

decisions to achieve the objectives. Once the

objectives and data/information needs are clear,

the equipment and integration should be

analyzed to determine the best way to obtain

the required data. Once integrated, one or more

analytics solutions will need to be used to

provide decision support to stakeholders to

make better decisions, as well as to provide

performance transparency to senior leaders to

measure against objectives. Lastly, this

actionable information needs to be

communicated to the right people at the right

time. The right people includes both onboard

and shore based managers, requiring a

communications solution to be put in place. By

going through this process holistically, ownerscan begin to reduce investment in individual

systems and retrofit efforts and maximize the

ROI on strategic investments, enabling owners to

achieve their current objectives while also

positioning well for unknown future objectives.

Define objectives

The first step in making the right technology

investments is to determine the objectives.

Ideally all stakeholders are a part of this process,

including owners, managers, operators,

customers, consultants, OEMs, Classification

Societies and 3rdparty technology providers. It is

helpful to lay out each organizations objectives,

which may or may not overlap with each other.

This group should define both high level

objectives, as well as how to measure

performance against them. For instance, an

owner may be very focused on managing

maintenance expenses and minimizing

unplanned downtime, both of which directly

impact his bottom line. A charterer may be also

focused on avoiding unnecessary and unplanneddowntime (which could disrupt his schedule), but

is also likely focused on reducing fuel

consumption as this expense is often the

charterers responsibility. In the long term,

owners are also often concerned with fuel

efficiency, as that can impact the charter rate the

Figure 4: Process to analyze potential data and analytics investments


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owner is able to get in the market when

competing against other more or less efficient

vessels for contracts. According to Jacobus

Varassieau, Operations Manager at Nordic

Hamburg, similar vessels with better fuel

efficiency performance can command

significantly higher rates in the market, with the

owner often able to capture some of value

created by better fuel efficiency. Other

stakeholders also have their own objectives:

OEMs are often focused on the performance of

their specific equipment, while Class is focused

on ensuring the vessel remains safe and

seaworthy.

Objectives may also differ across time. While an

owner and charterer may agree to an objective

of reducing fuel consumption by 5% this year,which requires a specific set of operating or

maintenance changes, achieving an incremental

5% the following year may require an additional

set of optimizing actions, which may require new

data and information in order for the operators

and managers to achieve. Owners of new-builds

may be focused on fuel efficiency over a 10-20+

year period, an owner of a 20 year old vessel

may be focused on a much shorter time horizon.

In addition to objectives within a specific area

changing over time, the focus areas may also

change. At some point, additional investments

in one area will yield a lower return than

investments in another area. For instance, while

in 2014 many ship-owners are focusing their

resources on fuel efficiency improvements, in

the future, investments in reducing emissions,

ballast water treatment, or improving up-time

may have a higher return on investment and

thus may drive different objectives. These

should be thought about in advance, as the right

infrastructure investments now will enable

owners, operators and managers to shift focuswithout significant additional investment, as

opposed to just solving todays problem and

likely having to make additional investments to

solve new problems in the future. In addition to

shifting focus, environmental regulations are

projected to get stricter over time, necessitating

higher levels of productivity and efficiency in the

future.

Identify needed Data and Information

Once objectives have been clearly defined, the

different stakeholders must determine whatdata and information is needed to achieve those

objectives. For this purpose, raw data is the raw

output from various sensors onboard a vessel,

while information is the output of data analysis

that is useful for one or more stakeholders. Data

is often raw, potentially overwhelming and often

not actionable. Information provides insight and

can be used to make better decisions and take

action.

The first step is to determine what information isneeded. If assessing vessel performance, an

owner or operator would want to understand

the vessels hull, propeller, engine and generator

fuel performance, normalized for operations and

external conditions and ideally compared to a

relevant baseline (point in time, fleet average,

sister ships, etc). The right metrics would need

to be determined based on the vessel

application, which would then dictate what data

is required in order to calculate those metrics, as

well as normalize them. In addition to

calculating metrics, actionable information tosupport operator decision making would also be

required. This might include operator

applications like trim optimization, speed

optimization, generator or engine configuration

optimization and weather routing information.

It might also include decision support for the

maintenance team which could identify

maintenance actions to be taken to improve fuel

efficiency.

If an objective is to maximize equipmentreliability and uptime, then another set of

information is required. In this case, the focus

would be on understanding health and condition

of equipment, both to monitor and track that

condition as well as to help the maintenance

team make better maintenance decisions. When

comparing to the fuel efficiency example above,

if maintenance and reliability is a potential


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objective, than more equipment operating data

would be helpful to create more actionable

maintenance plans.

Select Equipment and Determine

Equipment Integration Plan

Once the data and information that is required is

identified, the next step is to determine the

source of that data and how to integrate it into

the technology infrastructure onboard or

onshore. If outlining initial requirements for a

new build vessel, this is an area where moderate

initial investment can enable significant savings

and flexibility in the future.

Before determining the integration plan,

equipment must be selected. Since the

information and data that is required is already

identified, this should be incorporated into any

equipment selection process, whether in a

Request for Proposal (RFP) or dealing with

trusted partner suppliers. In either case, this

information and data requirement should be

written into the specification prior to finalequipment selection and financial commitment.

In addition to contracting for specific sensors,

interfaces, etc; the owner and/or ship-

management company should verify that the

supplier can provide the equipment as per the

specification. During delivery, an owner does

not want to hold up acceptance of an entire

vessel because a single piece of equipment does

not have the proper sensors or data interface as

per the specification; often the owner already

has charter commitments that will make it

financially difficult to wait until the discrepancyis addressed by the supplier. In light of this, it is

imperative for owners and their ship-

management companies to be proactive in

ensuring suppliers are able to comply with the

specifications.

Figure 5: Overview of typical data and analytics system architecture in a marine application


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Open standards to share data across

machines

Historically, each OEM that was involved in data

integration would have their own data protocol

for transferring data or making it available toother systems. This increased the integration

costs to bring together data from relevant

equipment, for example a main engine, fuel flow

meter, torque meter and ECDIS system. While

other industries, such as power generation, have

already moved to common open standards data

protocols, the marine industry is just starting to

move this direction. Instead of a different

proprietary data interface for each piece of

equipment, more and more marine equipment is

starting to communicate with Modbus, NMEA or

OPC standards. Additionally, there are standards

evolving such as ISO 13374-3:2012: Condition

monitoring and diagnostics of machines -- Data

processing, communication and presentation.

This is enabling new-build ships to more easily

transition to the IIoT. In addition to enabling

communications across systems, open standards

will also allow for the creation of standard

equipment hierarchies across maintenance

management programs, Classification equipment

registries, and OEM equipment databases.

These standard hierarchies will help facilitateseamless data sharing between different

potential data consumers to maximize value

creation for vessel owners.

As part of the specifications that should be

defined by the owner and/or the owners ship

manager, open standard interfaces should be

specified. The term open standards indicates

that the data is available for consumption in a

standard format that is accepted across

companies and industries and can be digested by

other systems without custom software bridge

development work.

There are several open standards which are

becoming more common in the marine industry:

Modbus and NMEA. Modbus is a standard that

is used across many industries outside of the

marine industry and has several different

physical delivery mechanisms, including TCP and

RTU. NMEA is a marine industry standard that is

emerging and also becoming more common.

There are also several variants of NMEA,

including NMEA 0183 and NMEA 2000. In the

future, it is hoped and expected that more

equipment suppliers will utilize an open standard

called OPC. OPC is currently the standard in

many industries outside of the marine sector.

For those who wish to learn more about these

data interfaces, see the Appendix for a list of

more detailed technical sources.

Data Sharing and Ownership

Some OEMs are adopting an open standards

approach while some are utilizing internal,

proprietary data protocols which can limitintegration options. Asset owners should

carefully consider the trade-offs between having

open standards communications and having a

solution provided by a single vendor via

proprietary communication protocols. If other

industries, which have previously moved

towards open standards, provide a good

prediction of potential marine industry

dynamics, then OEMs who do not adopt open

standards data protocols might be penalized by

some customers, as their solutions could be

perceived as less valuable than solutions that can

more easily communicate with other systems.

In addition to specifying that a supplier provide

equipment that can communicate via open

standards, owners also need to specify that the

interface is established and activated. Many

OEMs today are already providing equipment

and systems that can communicate via open

standards, however, it takes a configuration of

the interface in order for this data to be

accessed. Once the equipment or system isalready installed, the owner is likely to incur

unnecessary additional costs in trying to get the

OEM to enable an interface. This can lead to

excessive costs for these interfaces to be

enabled which could have been prevented had

the interface been specified in advance.


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Owners also need to understand who owns the

data that is being captured and used and what

rights are granted to different stakeholders.

There should also be a clear understanding of

how data will be used by other parties. Lastly,

the ownership of the data analytics should also

be clarified to avoid any misunderstandings or

conflicts. As far as Intellectual Property rights

and the ownership of the analytics, there needs

to be a balance that incentivizes solution

providers to continue to evolve analytics for the

marine space, while balancing the need for the

asset owner to have access to their data. A

potential path forward would be that the actual

analytics (algorithms, etc) be owned by the

provider (OEM or another third party), with the

raw data being owned by the asset owner.

Retrofit sensors and integration

While equipment is becoming more sensorized,

there is still equipment without proper sensors

being installed on ships and not integrated into

the technology infrastructure. This is definitely

changing and some early adopter ship and asset

owners are driving this forward.

It is now possible to either retrofit specific

sensors (i.e., coriolis fuel flow meters, torque

meters, water speed sensors, more robustweather sensors, emissions monitoring sensors,

oil quality sensors, etc) or integrate diverse

systems. When evaluating retrofit options,

owners and managers should find a partner who

thoroughly understands the integration

challenges, yet is not vested in particular

hardware. It is critical for owners and managers

to be able to make an objective analysis of the

different options that are available for their

specific retrofit situation as the implementation

costs can vary tremendously for similarfunctionality.

Communications bandwidth

Ship-owners continue to upgrade their ship-to-

shore communications as the cost of satellite

communications decrease to less than $1 per

megabyte of data.10 This cost level reduces the

impact of communications on the overall

business case, especially when combined with

other emerging requirements for ship-to-shore

communications such as video-conferencing,

email, social media, etc. With the utilization of

existing satellite networks continuing to

increase, the per-unit cost will continue to

decrease over time. As the amount of data

onboard gets larger, there are many creative

solutions for identifying the right data to be sent

ashore, instead of just streaming it all. Various

forms of compression, qualification and

validation can be used to reduce the required

data to a more manageable level that will further

reduce costs. For example, a large, modern

vessel might have 500-1000 data points available

once per second. There is no reason to haveeach data point transmitted ashore every second

or even every minute. Instead, analytics can be

used to validate and qualify the data to ensure

that the right data is selected and transmitted

ashore, which can result in bandwidth needs of

approximately one megabyte per day.

Integrated or stand-alone solution

Equipment OEMs and software providers are

focusing on how to utilize available data to

create actionable information to help drive

better operational and maintenance decisions.

Many OEMs are starting to use data from their

specific piece of equipment to help ship owners

and operators operate or maintain their

equipment more effectively. If this trend

continues with each OEM providing their own

IIoT solution, only for their equipment, owners

and operators will become overwhelmed with

information technology and not get the value

out of each system. In addition, each

component on the ship is not operating inisolation and needs to be analyzed as part of the

larger system. For instance, an increase in fuel

consumption could be driven by decreased

engine condition, change in fuel pressure,

increased fuel temperature, lack of maintenance,

increased marine growth on the hull, a fouled

propeller, heavier than expected sea state,


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higher speed requirements, headwinds, or a

different fuel type among many other potential

reasons. If the engine is analyzed in isolation, it

may lead to an issue not being identified or an

incorrect diagnosis and a decision being made

without the most accurate and comprehensive

information.

Integrated analytics that consume data from

multiple sources and help users transform that

data into actionable information are the logical

next step in the marine industry. As many

vessels already have sensors and some level of

data integration, monitoring and analytics

solutions should be flexible enough to leverage

existing onboard systems such as integrated

control systems, stand-alone sensors, navigation

systems, and ballast and tank management

systems. This is necessary to minimize up-front

investment in sensors and data integration to

maximize the owners return. Early adopters are

starting to move this direction across different

marine sectors.

Security

Security is a top concern for many leaders in the

marine industry. Some owners and operators

are concerned about their data and information

(which they protect) being accessed by

unauthorized parties. Some owners and

operators are worried that by connecting

Figure 6: Wide landscape of data analytics applications in the marine industry


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equipment to the external internet that their

vessels operations or equipment could be

compromised and result in an event with a

financial loss. These are real concerns, however,

many of these concerns have been addressed in

the past in other industries that also have high

value assets engaged in activities where the cost

of failure is very high. The commercial aviation

and power generation industries are two

examples of industries with assets that are worth

hundreds of millions or even billions of dollars

and with potential risks that could cause

significant human and/or financial loses. These

industries have addressed these security

concerns and mitigated the risks such that the

return they receive from connecting and

analyzing machines greatly outweighs the real

likelihood adjusted risk. This paper is notintended to provide a thorough explanation of

accepted security standards, however, there are

extensive documents published by industry

groups that are focused on industrial automation

and controls security; several of these are listed

in the Appendix.

Value of Data vs. Information

Another challenge in the marine industry

regarding analytics is how to deal with real-time

data analytics onboard a vessel, near-real-time

analytics on-shore, and the additional ship and

shore based business systems (i.e., maintenance

planning, purchasing, supply chain, fuel

management, cargo management, etc.). The

software package needs to enable ship and

shore based users to interact with data and

create actionable information.

In addition to the analytics to transform data

into actionable information, data validation and

qualification must also occur. Data should bequalified and validated to ensure like data points

are being compared, both over time and across

vessels.

These analytics must not only take the manual

effort out of moving from raw data to actionable

information, they must also be easy to use with

minimal training. For example, the user

interface should be simple and intuitive to

enable an onboard operator or a shore-based

manager to utilize the software with as little as

an hour of training.

When making an investment, owners should

ensure that their solution will have flexible,configurable, easy to use analytics that enable

operators and managers to have access to

actionable information to make better decisions.

Flexibility for Custom Applications

In addition to common focus areas of overall

maintenance, equipment reliability, general fuel

efficiency and environmental compliance,

specific sub-sectors within the marine industry

will require custom applications to realize thefull potential of the industrial internet. Owners

should think about this and discuss with their

peers what types of custom applications they

could envision for their sector. These

applications may or may not be available

presently, but could be introduced in the future.

The most critical thing for owners to consider

when making an investment is to think about

whether other systems could be integrated with

the investment they are making or custom

applications could be built on top. Ensuring

there is flexibility to help future-proof willincrease the likelihood that the investment is

evaluated favorably in the future.

What types of specifications should be

demanded during new-build process?

Owners of in progress new build ships are in an

ideal position to make investments that will

likely be more cost effective than waiting until

after vessel delivery. For an owner who is trying

to put in place an analytics decision supportsystem to help his onboard and shore based

team with operations, fuel, maintenance and

environment decisions, there is a basic set of

specifications that can be used as a starting

point. Of course, this will vary based on the

application, size and value of the asset,

complexity of the systems, etc.


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Control system: Owners should try to include an

integrated control system in their specifications.

This control system should have data from all

relevant equipment and make it available via an

open standard (usually Modbus, OPC or NMEA in

the marine industry). The interface should be

pre-enabled, with sharing of unlimited data

points possible at a minimum of 1Hz frequency.

The control system manufacturer should provide

a signal registry to the owner upon delivery

listing all data points with relevant technical

specifications to enable integration with other

systems. It should include performance data

from key equipment:

Propulsion engines

Generators

Major or critical auxiliary equipment Fuel flow meters

Torque/power meter

Emissions monitoring

Ballast water treatment

Tank levels and draft

Oily water separator

Key bearings

Key alarms

Additional condition monitoring sensors

Any other application specific equipment

ECDIS: Owners should specify that the ECDIS

system also contains key information necessary

to determine and normalize ship performance

and also make that data available. Similar to the

control system, the interface should be pre-

enabled, with sharing of unlimited data points

possible at a minimum of 1Hz frequency. It

should include and make available key data, such

as:

Location

Speed over ground Speed through water

Wind speed/direction

Sea state or wave height

Depth

Ship network: The ships network should be

installed during the new-build process. At a

minimum, the ships network needs to have one

or more connections available in any space with

equipment that could be monitored or sensors

might be installed (engine room, control room,

cargo control room, bridge, tanks, etc). As well

as having connections where data will be

acquired, connections should also be put where

users are likely to use the analytics. Of course,

connections need to be established within

proximity to the off-ship communications as

well.

For retrofit vessels, and even in some new-build

situations, data over power line can be a viable

alternative to running network cables

throughout the ship11. This is an especially

attractive option in a retrofit situation where

running cables through watertight bulkheads cangreatly increase the cost and time in order to put

the network in place.


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ConclusionsThe industrial internet of things (IIoT) presents a

huge opportunity to the marine industry, with

the potential to create over 20 billion dollars of

value annually. While not all ships are

positioned to immediately capture the IIoTbenefits, that number will grow significantly, as

almost every new-build ship is having technology

built in to capture these benefits.

The benefits to marine stakeholders are

significant. Substantial fuel savings, reduction in

maintenance and repair costs, and greater

assurance of environmental compliance are the

largest drivers.

Organizations need to start thinking now about

how they are going capture benefit from theIIoT. Owners need to be thoughtful about the

investments they make and look beyond the

immediate problem they are trying to solve. In

order to do this most effectively, owners should

follow a high level methodology:

1-Define business goals and objectives: Owners

need to think through what is important to them

and their customers, both in the present and in

the future. It is important to define metrics to

be monitored in near real time and then monitorperiodically to compare anticipated benefit to

actual benefit realized.

2-Define information and data needs: With

objectives and goals defined, owners need to

identify what information will be needed to

measure progress towards the goals, but also to

provide better information to operators and

managers to enable them to make better

decisions that are aligned with achieving the

goals. Owners need to think through how to

obtain the required information and what dataand analytics are needed.

3-Select equipment and define integration plan:

Once the goals and objectives are defined and

the information that is required is identified, the

owner needs to ensure that their equipment

selection is aligned with their data needs. This is

relevant for both new-build and retrofit

situations, as well as for RFPs and working with

long-term trusted suppliers. Owners need to be

very clear about what sensors and interfaces are

required, ensure that the supplier can deliver

and work together with the supplier to ensure

success. Selecting equipment needs to be done

in the context of all the other equipment and

systems onboard the vessel (and across the

enterprise) instead of as individual components.

This will then lead to the creation of the

integration plan which should specify what data

will be integrated from what system using what

interface.

Those that do not start to embrace the value

that technology and data analytics can create

risk becoming less competitive and being left

behind. The marine industry has the opportunity

to learn from other industries which are further

down the industrial internet of things road,

such as commercial aviation and power

generation. Learning from these industry

examples will help marine organizations mitigate

challenges and minimize costs.

While those who do not start to explore thevalue that the IIoT concept can bring to their

business risk falling behind, those who do not

think through their investments also risk making

investments that do not achieve the desired ROI,

and also put them at a disadvantage. Many of

these investments are not insignificant, and so it

is important to think through objectives,

information and data needs as well as

equipment selection and integration as part of a

comprehensive plan, not just individual

investments.


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About the authorsRob Bradenham

Rob Bradenham is the General Manager of ESRG, a leader in marine data analytics software. ESRGs

flagship product, OstiaEdge, can help owners and operators reduce fuel consumption, optimize

maintenance costs, reduce downtime and ensure regulatory compliance. Mr. Bradenham has spentmost of his professional career in maintenance and operations of industrial equipment, both as an

Associate Partner with McKinsey & Co, the global management consultancy, where he served a wide-

range of large industrial organizations on their operations and maintenance, and as officer in the US

Navy, where he managed maintenance and operations on surface ships. Mr. Bradenham has a

Bachelors Degree in Finance and a Master of Business Administration from the University of Virginia.

Jeremy Wilson

Jeremy Wilson is the Chief Software Architect at ESRG for the OstiaEdge suite of applications. Mr.

Wilson has over 20 years of experience in enterprise machinery monitoring and analytics software and

technology. He also brings additional significant experience with CBO (Condition based operations) and

CBM (condition based maintenance), as well as software development, business analytics, automationand controls and electrical engineering. Before joining ESRG, Mr. Wilson held roles in the US Navy, IDAX

and General Electric, working across the defense industry and multiple commercial sectors. Mr. Wilson

holds a Bachelors Degree in Computer Science from Old Dominion University and a Masters Certificate

in IT Project Management from George Washington University. Mr. Wilson has also been a leader in

helping to establish a standard framework for handling maintenance and operations data, both as part

of the Mimosa organization, where he has served on the Mimosa Technical Committee and on the

Mimosa Board of Directors as a contributor to groups such as SNAME (Society of Naval Architects and

Marine Engineers).

About ESRGSince 2000, ESRG has provided leading edge data analytics and remote monitoring technology to

support commercial and defense marine engineering operations. Machinery owners and operators turn

to ESRG for expertise in data integration, automated analytics, reporting and dashboards. ESRGs

OstiaEdge, is a Platform as a Service, which combines onboard data acquisition, qualification and

analysis, shore based analytics and workflow management as well as business intelligence features.

OstiaEdge, which is based on Reliability Centered Maintenance (RCM) principles, enables users to

implement Condition-Based Maintenance (CBM) and Condition-Based Operations (CBO) to increase

reliability, achieve greater asset productivity, reduce fuel and energy consumption and decrease

operating costs.


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Appendix

Detailed technical resources for further information

NMEA 0183, Standard for Interfacing Marine Electronic Devices, National Marine Electronics

Association, Version 4.10, November 2008,www.nmea.org

OPC Data Access Automation Interface Standard, OLE for Process Control, Version 2.20,

February 4, 1999,www.opcfoundation.com

Increase the Security of SCADA Networks, Honeywell Process Solutions, August 2011, Houston,

TX USA

Modbus Application Protocol V1.1b3, Modbus Organization, Inc, April 2013,www.modbus.org

ISO 13374-3:2012: Condition monitoring and diagnostics of machines -- Data processing,

communication and presentation -- Part 3: Communication

http://www.iso.org/iso/catalogue_detail.htm?csnumber=37611

Mimosa: An Operations and Maintenance Information Open System Alliance:www.mimosa.org
http://www.nmea.org/http://www.nmea.org/http://www.nmea.org/http://www.opcfoundation.com/http://www.opcfoundation.com/http://www.opcfoundation.com/http://www.modbus.org/http://www.modbus.org/http://www.iso.org/iso/catalogue_detail.htm?csnumber=37611http://www.iso.org/iso/catalogue_detail.htm?csnumber=37611http://www.mimosa.org/http://www.mimosa.org/http://www.mimosa.org/http://www.mimosa.org/http://www.iso.org/iso/catalogue_detail.htm?csnumber=37611http://www.modbus.org/http://www.opcfoundation.com/http://www.nmea.org/


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Endnotes

1ESRG analysis based on multiple data sources, including: Lloyds Register, IMO, AlphaLine, World Shipping

Organization, Clarkson Capital Markets, MAN Diesel Engine Outlook 2010, proprietary research2http://gcaptain.com/columbia-shipmanagement-fined/

3

Bradenham, Rob and Ken Krooner, Bringing the Industrial Internet to the Marine Industry and Ships into theCould, ESRG, October 20134Bradenham and Krooner

5Manyika, James; Michael Chui, Jacques Bughin, Richard Dobbs, Peter Bisson, Alex Marrs, Disruptive

technologies: Advances that will transform life, business, and the global economy McKinsey Global Institute, May

20136Chambers, John, Internet of Everything, Cisco, February 21, 2013

7General Electric press release, June 18, 2013

8Annunziata, Marco and Evans, Peter C, Industrial Internet: Pushing the Boundaries of Minds and Machines,

General Electric, November 26,20129United States Environmental Protection Agency,

http://www.epa.gov/climatechange/ghgemissions/global.html#two10

Ground Control Global Satellite Internet Solutions11FDN Marine www.fdn-marine.com
http://www.epa.gov/climatechange/ghgemissions/global.html#twohttp://www.epa.gov/climatechange/ghgemissions/global.html#twohttp://www.fdn-marine.com/http://www.fdn-marine.com/http://www.fdn-marine.com/http://www.epa.gov/climatechange/ghgemissions/global.html#two

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