News Article 25/08/2009

Aligning efficiencies is more than just cost control, by Felicity Landon,
Ship management international Issue 20 July/ Aug 2009 page 54-58

So times are tough. But shipping companies need to look at life beyond cost cutting measures, and the choices they make with regard to IT are more critical than ever before, believes Himansu Joshi, director of Teledata marine.
“IT budgets are becoming prime targets of the cost- cutting exercise. But management should take a careful look now, even moe than ever before, at how IT is used acress their organization”, he warned. It is important to bear in mind that targeted IT investments can make operations more efficient and increase revenues, delivering returns larger that simple cost cutting”.

Uncertain shipping revenues and manpower shortages on ships will change the way shipmangement is done in the near future, said Capt. Joshi. “IT products and services have to be aligned to this need now, much more that ever before”.
TMSA says the use of IT to ensure effective cost management becomes more important as shipping companies battle to keep costs down and ensure profitability through boom bust cycles.

In response, it has set up what it believes is the word’s first maritime IT consulting service, TMS consulting, offering end-to-end IT consulting, business intelligence and outsourcing services.
“it has been proved that the deployment of It services arithmetically generates ROCI at 9% per annum over a period of six years in a medium to large enterprise”, he added.

However, he says, the use of marine software to assist shipowning and shipmanagement operations remains “extremely fragmented”.

“There is a myriad of marine applications that provide piecemeal solutions. The presence of myriad stand alone applications that do not give decisions support and increase paperwork, and the absence of identifications of IT needs at strategic, operational and tactical layers of the shipping organizations are prevailing endorsements of an ‘old school of thought’.

“The marine industry at large has never executed a complete needs analysis under the logical study heads of management technology, organization, information systems and business solution”.

Shipping companies need to take time to explore technology infrastructure and evaluate the variety of options, from shipping enterprise software resource management and webcentric solutions to relational databases and data warehousing, suggested Capt. Joshi.

TMS recently launched Ship Manager 7.0 which it claims addresses the need for an integrated, efficient robust and user-friendly IT solution. Implemented across Parakou Shipping’s fleet already, it is constructed around four building blocks- Technical, Commercial, F&A and Decision Support. “it is arguably the only totally integrated web-based marine IT solution” Capt. Joshi stressed.

Shipping companies need to make the distinction between running a vessel efficiently and running it cheaply, says Spec Tec’s global Sales manager Matthew Hodkinson. “To make this distinction, you need to understand what is happening onboard to a detailed level,” he said. “You need to understand what is happening in the office at an operational level. You also need to look closely at what are the impacts when you cut costs, and see what systematic risks you may create by reducing expenditures in a particular area.

“The only way to effectively do this is to have an active risk management process, which is imbedded in all of your management processes-not a standalone, vertical solution. This needs to be an intuitive and practical as possible, so it remains workable”.

It isn’t possible safely to reduce costs in one area unless you understand what the impacts are in other functions of your business, he emphasized.

AMOS2 Enterprise suite includes modules for maintenance, purchasing, personnel, quality and safety, and voyage management. “While able to operate each business module independently, as well as in unison, each has been fully integrated within the central AMOS database structure to provide consistent and manageable central reference tables for the common sharing of Data” said Mr. Hodkinson.

According to SpecTec, one of the main issues facing ship operators today is the falling level of competency and the lack of retention of corporate knowledge, due to the high rate of crew turn over.

“This has had a negative impact on the overall management system implementation, both in terms of safety and of control of maintenance and purchasing processes. That is why a system like AMOS is critical, providing a drip feeding of the management system and processes allowing the creation of a system that brings complex processes in to bite-sized pieces.”

SpecTec also sees environmental management becoming entrenched in most of the business processes, so that it cannot be considered a stand-alone process. “This is why vertical solutions will fade out as they struggle to efficiently support broad business interconnectivity”.

While maritime IT solutions are becoming ever more sophisticated, complex and all-encompassing, the overwhelming message from the software companies is the client’s need for simplicity and ease of use. “The maritime environment does not lend itself to having complex software systems installed on vessels, as the ‘average’ multinational seafarer does not have the high level of IT knowledge and expertise needed to operate such complex systems,” said mark Jennings, Operations Manager of Marine Software. “Careful thought and consideration is given by shipowners and shipmanagers when they select software applications, as these need to be simple and easy to use, robust, and cost effective with a low training overhead.

“Any Software needs to be a simple tool to assist the seafarer and to reduce the time spent in fron of the computer, and without the need to send the crew away on lengthy training courses, which is both impractical and expensive.”

Complicated, costly land based solutions have not leant themselves to providing a real business benefit in the Marine environment, he says. “Tight operational schedules, fast vessel turnround times and often low financial margins to dictate that maritime software needs to be simple and inexpensive to give the operator any hope of getting a genuine return on IT investment. Marine Software’s solutions offer a unique way in addressing these concerns.”

Among the developments from Marine Software is new Lay-up module to help manage the Planned Maintenance requirements when laying up ships.

The company has also produced a specific module within its Marine Safety manager software to meet a request from Estonia’s Tallink Group for help in recording environmental aspects and impacts under ISO 14001. Tallink has upgraded its fleet of over 20 vessels to incorporate this new feature.

Marine Software has recently supplied its Marine Purchasing system to the National Oceanographic center’s research vessels james Cook and Discovery and its technical Office in Southampton.

ABS Nautical Systems says the messages from clients is clear; make the system as easy as possible to use, while still providing the same robust solution with full reporting capabilities.

“Cost and complexity are always concerns, especially in the market conditions we face today”, said Joe Woods, Vice President of Sales and Marketing. “We are seeing a growing number of clients and prospective clients looking for a single integrated solution.
“They want to limit the number of systems they need to support, implement, train personnel on, and manage on a day-to-day basis. They want to enter a long-term relationship with a ‘partner’ who will allow them to grow and change as the market changes”.

As well as this, a growing number of companies are inquiring about reporting capabilities, said Mr. Woods. “They are looking to maximize the data they have collected for trending and improved efficiencies. One of our largest clients told us ‘we don’t collect data we don’t intent to report on or analyze’. The solutions we provide must be streamlined and built to extract data just as easily as you enter data.”

Clients also want to be able to access data from anywhere in the world and minimize the deployment effort required for initial implementations and on going upgrades, he adds.

ABS Nautical Systems is also reporting an increased use of system audits in reaction to the economic downturn. A consultant will spend two or three days with the client looking at how efficiently they are using the system and leave them with suggested tactics to gain more from the software.

“Many time we find that over time internal processes have changed but they have not updated their workflow, authorizations or provided training necessary to match these internal changes,” says Mr. Woods. Such an audit can have clear implications for the bottom line, he added.

Later this year (2009) the company will launch an N-tier solution for its NS5 fleet Management software.

Michalis Hatzimanolis, in charge of marketing at Ulysses Systems, says the significant contribution that IT can make in avoiding errors is based on sharing experience and implementing practices refined by experience. IT should apply predictability and continuous improvement to management operations, he says, and he compares this to football management.

“If a football coach was to manage as many teams as a shipping company manages ships, the manager would have to maintain his ability to apply normal management practices to teams he cannot see.

“he would still have to view each player’s action, discuss them, suggest improvements, pass experience from one team to another etc. If technology could be used, it would record how each team and individual player performs, and would use the experiences to channel focused improvements to each player and team. The target of IT in shipping is very similar.”

Capt. Hatzimanolis says IT has to show results, in a tangible way, and where better that to look at insurance records, which show the same errors being made on ships again and again-anchor losses, collisions, groundings, machinery damage etc.

Commercial losses are also often repeated- lost charters, frustrated sales, damaged reputations.

“There are very few new and interesting problems, which indicates that we nowhere near exhausting the need for improvement in areas we already know are risky. Shipping doesn’t change much. However, collisions and machinery damage occurs more frequently in inexperienced companies and in sectors where management scrutiny is not strong.

“Most IT systems aim at recording data that will assist coordinated decision –making. In short, the aim is to support users with the right information at the right time to overcome gaps in information and knowledge that will result in errors.”

Recording of observations or more routeing data is often inconvenient and incomplete, so the software needs to make this process convenient and of direct benefit to the user entering the information says Capt. Hatzimanolis.
When people make decisions, they are preoccupied with conflicting goals and pressures- they need convenient and well designed software navigation to benefit from corporate data.

People are very busy and often competing with each other within the organization-so do not help each other with experience. A management system must pick up experience as a by-product of normal work, not through extra effort by one person to pass his experience to another.

And, said Capt. Hatzimanolis: “People often do not remember the right experience at the right time unless they have practiced for years. After a black out, a duty engineer will rarely check the oil before starting another generator. Technology that understands shipping procedures can help with that.

“The process of being reminded about what to do or about what has happened in the past at the right time, is rarely well thought-out. The right reminder at the right time is essential to efficient operation.”