News Article 03/02/2006 A

TMSA - strong support, new business process 

Digital Ship, Jan-Feb.2006, p.11-12

Tanker Operator held a one day conference at Europort in Rotterdam in November 2005 about continuous improvement in tanker operations and TMSA, the Oil Companies International Marine Forum (OCIMF) initiative to assess tanker operators based on their management systems in different areas of operations.
The scheme will provide oil companies with tools and knowledge to differentiate between the good, medium and "just good enough to pass the rules" tanker operators -and give their business preferentially, or even pay more money, to the good tanker operators, like a star scheme for hotels.
Creating a tiered market system proves a good way to motivate quality in virtually all other industries, where customers who want to pay more for something above the minimum are able to do this.
Consequently, those providing services at the lower end of the market are either motivated to improve their offerings, or have to find customers who are happy with their level of service. In other words, the customers drive quality.
"Customer driven quality is far and above the solution for improving the image of shipping," said Dimitris Lyras, director of Lyras Shipping and session chairman. "It's not a bad thing that TMSA is an oil company instigated initiative. In the long run, oil companies want to take better vessels."
Mr Lyras pointed out that one of the reasons that the tanker industry is seen as being more threatening than more dangerous industries (such as cars) is that with tankers, the end user (i.e. the person using the oil) does not have control over the way the oil is transported.
TMSA provides a mechanism to put more control over ship operations in the hands of the consumers, via the oil companies, which consumers do have a degree of control over (they can fill their cars up from a different petrol station if they disapprove of the oil company, as the Exxon Valdez incident proved).
Mr Lyras also said it was possible that TMSA could help the tanker industry improve its credibility with regulators, and stop regulators wanting to impose draconian measures, such as criminalising seafarers.
"It is the issue of credibility which has led us to this approach from the US courts," he said.


Aswin Atre from NYK Shipmanagement in Singapore, said that he thought TMSA would cost $60,000 to $70,000 extra per vessel per year, not including additional training for shore staff.
Kamar Zaman from Drewry Technical Consultants, said he thought shipping companies would have to pay an extra $45,000 per ship, just to ensure continuity of staff. Smaller companies might not survive, due to the extra workload burden which brings with it these extra costs. Those that will continue will probably have to rely on third party ship management concerns, he said.
Panteleimon Pantelis from Ulysses Systems said he thought it would take an additional 300 or so man hours per year for a master and chief onboard, let alone other personnel.
Michael Reppas from Seaworld Trading said that introducing risk management after initial software expenditure would cost $60,000 per year per ship, initially all inclusive. The initial software expenditure would be in the region of $10,000-$15,000 per module.
Panos Hadjikyriakos from OSG said that workload is the greatest expense, although software is proven to reduce it; for example 10 years ago it took 2 days to do a loading calculation, now it can be done by computer.
Costas Polydakis from Athenian Seacarriers said he thought that software data population company customization and deployment would cost $70,000 to $80,000 for the first vessel. However the next vessel would cost next to nothing if it is a sister vessel, otherwise there would be only minor expenditure.
Antonios Vrondissis from Andriaki said that shipowners could make the investment back from having better maintenance and stock control systems; the improved retention rate would lead to a reduced cost of training new staff; Andriaki has a 97 per cent annual retention rate anyway.
International Business Solutions' managing director Apostolos Belokas, said he thought the cost of setting up a planned maintenance system alone may reach $20,000 per vessel, which is mainly down to the software required. Obviously, once a system has been installed then the daily operating cost for that system will be considerably reduced.

Capt. Panos Hatzikyriakos, OSG

Captain Panos Hatzikyriakos, safety and security manager / designated person ashore / company security officer with OSG Shipmanagement, said he saw TMSA as a tool to help ship operators measure and improve their management systems, and report back to the oil majors, thus helping the oil companies to evaluate and rank ship operators.
It brings the idea of risk assessment integrally into the shipping company management system, and forces a change of philosophy to a proactive continually improving system, he said.
Captain Hatzikyriakos is quality manager of the entire OSG group looking after a fleet of around 95 vessels, plus 14 newbuildings, which include three LNG carriers plus three options.
Captain Hatzikyriakos said he saw TMSA as an amalgam of the ISM Code, ISO 9001, ISO 14001, risk management, plus other new tools such as management of change, benchmarking and others.
Perhaps one of the most important elements within the TMSA is that the concept of risk management takes on a new meaning and becomes an integral part of the shipboard and shore side management style, he said.
A change of culture is certainly needed among both sets of staff to a more proactive way of thinking, encompassing continuous improvement, rather than just regulatory compliance.

The majority of key performance indicators in TMSA are needed to reach stage 2 (8 KPIs), he said; OSG is measuring 2 KPIs needed on stage 1, 4 at stage 3 and 2 at stage 4.
OSG is measuring 2 KPIs for critical equipment; 1 for mooring; 4 for change management; 1 for incident investigation and 10 for safety management.
OSG's risk management process includes awareness (training); identifying hazards; assessing/ evaluating risks; looking for risk control options; monitoring and reporting of results.
OSG's strategy for continual improvement for TMSA included evaluating the current position against what TMSA said was required at the desired stage, and assessing risks in parallel; then making an action plan, setting up a monitoring system; and rescoring.
OSG developed a risk assessment computer based training module for its seagoing staff. It conducted risk assessment seminars for shore staff and seagoing staff. It did an onboard audit of how well it was following its management system.
On the principal question, "can TMSA add value to a quality operator?", Mr Hatzikyriakos said that the answer was "yes". "A quality operator finally has a documented chance to make the difference," he said.

Aswin Atre

Aswin Atre, managing director of NYK Shipmanagement, said that NYK had been preaching the concept of continuous improvement well before TMSA; NYK is Japanese owned and the Japanese have long been interested in these business ideas, under "Kaizen" culture.
NYK conducted an organizational assessment as to how well it reached best practice as defined in TMSA, and identified a "vital few" number of areas where it could improve.
It is important to clarify the assessment goals and potential benefits to staff, he said.

It is nice to have a consensus about the best way forward, but not essential; at times senior management can step in to get the process going. You should set and adhere to a timetable.
The initial reaction in the company to TMSA was one of skepticism, he said, with "Oil companies getting rid of their responsibility and putting it on the manager."
The company set up a task force to look at all aspects of TMSA, and encouraged brainstorming.
Altogether it took nine months for the company to assess itself. "Is it worth the time? I think it is," he said. "But whether there is appreciation for the effort, only time will say. It's difficult to put a dollar view on it."
Mr Atre said that NYK is applying the procedures to other vessels in its fleet. In particular, its car carriers are becoming very demanding. "They used to give us cars covered in plastic sheet," he said. "Then Toyota said, lets put a clean car onboard and play hell if cars get dirty."
Following TMSA, NYK has put extra attention into machinery calibration reporting and knowing the machinery, he said.

Mike Reppas, Seaworld

Michael Reppas, HSE Director, Seaworld Management and Trading, said that TMSA introduces the tanker industry to the idea of business excellence.
"It comes to give us a push," he said. "You have a new objective - you assess yourself against your own objective."
Captain Reppas likened TMSA to a business excellence approach, which is all about results and improvements and builds easily on management systems, such as the ISO standards.
"A lot of operators have decorated their walls with certificates," he told delegates. "One has to decide between decorations and the use of a management system that allows companies to operate efficiently and profitably. Ignoring TMSA is done at our commercial peril."
"Objectives should be listed for those working at every level of the company. Staff should be given specific aims and targets and above all else, management should be willing to listen and learn," he said.

Costas Polydakis, Athenian

Costas Polydakis, technical manager, Athenian Sea Carriers stressed that tanker operators should not see TMSA as something they should "comply" with.
"The shipping industry is infected with a compliance virus," he said. "We translate this into "this is what you have to comply with". We're trying to comply with TMSA."
"Getting rid of the compliance process will not be very easy."
Polydakis said he would stick with Element 4 - reliability and maintenance standards.
"Right on the very top of Element 4a, in the not-so-humble stage 1 key performance indicators we have all read the words: "Each vessel in the fleet has a formal maintenance plan and a maintenance and defect reporting system." In the "Best Practice Guidance" column, just to the right of this, we read:
"The system, which may be computer based, covers all on board equipment on the bridge, the deck and in the engine room and all electronic equipment."
I'm sure that there are quite a few senior managers who read the above phrases and just nodded to themselves with self confidence, without second thought: "Yes, we have a PMS. We're sorted. Let's move on to the next bit."
But just ask yourself do I really have a proper preventive maintenance system, which fits the above description? Maybe a closer look is needed just to be sure we are being honest, before we hurry to award ourselves with a positive reply.
"Each vessel in the fleet" This means that the PMS system is vessel-specific. It has been created by carefully studying the plans, drawings and system diagrams of the shipyard, the operations and maintenance manuals of the equipment manufacturers, all service letters issued by the equipment manufacturers after the vessel was built, or to be more specific, after each equipment was first introduced in the market, since the vessel may be new but the equipment design may be old.

Vessel-specific also means that in most cases sister vessels may not have an identical PMS. Even small differences such as the installation of a slightly improved oil mist detector version in the third vessel of a series, must be reflected in the system.
As for the formal plan, the maintenance system (MS) must be formal. It must be documented, either on paper or on hard disk. Each maintenance activity must have a clear interval, clear work instructions and a clear methodology of record keeping of the maintenance outcome.
The MS should include every planned event, whether it is a requirement of the maker, the class society, the company, the flag or any industry body. Any planned task must be recorded, or else we will not have a representative and complete maintenance history.
Proper document control, as we know it from our ISM experience, must be exercised. Revision history must be recorded and details of each revision must be recorded. A real formal working PMS is a prime example of continuous improvement and there will be literally hundreds of revisions in the lifetime of the system. After every service letter sent by equipment makers, every flag circular, every Intertanko bulletin, every class society newsletter, after every job completion report for a specific maintenance task, there is a potential need for a revision of the PMS system. This is never-ending and forms the continuous improvement.
All maintenance work carried out on board, whether planned or unplanned, condition based or cosmetic, must be reported. The maintenance report must be made available to the superintendent for checking and review as soon as possible after the maintenance task has been completed. The superintendent should acknowledge that the maintenance report has been read and checked and the vessel's Master and Chief Engineer should be aware that their reports have been read. You soon lose interest in writing detailed reports once you start having doubts whether anyone bothers to read them.
There must be also a formal system for reporting defects, with all the associated requirements of the well-known cycle of locating the cause of the defect, planning corrective action, carrying out the repairs and closing-out the defect. Again the defect reports must be available to the shore management as soon as possible and there must be a way for acknowledging the defect reports and advising the vessel of the actions taken, or to be taken to rectify the problem. There must be a way of prioritizing and drawing attention to defects with serious safety or environmental implications, or defects on critical equipment.
All company vessels must be covered by a thorough vessel-specific PMS as described above. If we have developed such systems for all our new deliveries but some older ladies in the fleet, covered by a more basic system, which are not meeting all the above requirements, then we're on the wrong track. As the maintenance system is supposed to consist of a "formal maintenance plan", all the above should ideally form part, and be reflected in the company's Safety Management System, and thus should apply to all company vessels.

And what about the "Best Practice Guidance" column:
"The system, which may be computer based". I believe they should have just written, "the system, which must be computer based".
All on board equipment should be adhered to. For example, on the bridge if you read navigation and communications manuals very carefully you might be surprised to find small comments hidden here and there such as "radar scanner mechanism to be oiled every six months" or "Inmarsat B VDU internal memory back-up battery to be replaced every five years" or even "apply a small amount of grease to the shaft and the bearings of the link mechanism of the repeat back unit of the auto pilot every six months". So bridge equipment has planned maintenance. A surprising amount of planned maintenance, albeit mostly of the failure-finding type. And it should all be included in our formal maintenance system.
On deck, the PMS must cover all deck fittings, mooring equipment and lifting appliances. It should be vessel specific according to the maker's intervals and recommendations and not a general template to be followed by all vessels.
The system should cover the engine room. Not just the main engine, diesel generators, steering gear, boilers, purifiers, compressors and pumps of PMS systems of the days of yore, but all the engine room. And finally what about the accommodation? Even deep fat fryers have planned maintenance tasks, not to mention elevators, or ventilation and air-conditioning systems.

So if we cover all the above, we are being honest in saying: "Yes. We have a PMS. Let's move on to the next bits." And then moving on to the next bits we will realize that we meet many more performance indicators: "A common computer-based system on board each vessel records all planned maintenance" of stage 2. Or "The maintenance and defect reporting system automatically alerts the staff responsible for shipboard maintenance and ashore when it becomes due", again stage 2.
And moving further up to stage three and stage four KPI's, having such a solid, sound and strong foundation as the PMS system which we just described, it is easy to improve and fine-tune the system and cover more ground. Improve our system and thus meet these KPI's.
Again, having such a complete maintenance database makes it easy to create a software tool to measure the number of outstanding planned maintenance tasks across the fleet as a percentage of the total number of monthly tasks, each month and record the figures. And that's element 4c.
If we seek continuous improvement we will develop our own additional performance indicators, which will track the maintenance of critical equipment. We will develop performance indicators, which will track the downtime of important equipment such as the main engine, diesel generators, boilers and cargo plant equipment.
Finally, and most important of all, in a good PMS, if we are being honest we will never be tempted to give postponements or extensions to maintenance due dates, just to maintain a good picture in our performance indicator.
Investing in a good software package is just the start. There are many software options in the market for PMS, ranging from simplistic freeware options to highly advanced (and highly costly) reliability centered maintenance FMEA analysis tools.

Buying one of these programs (in case we don't already have one) is not the end to our problems. A PMS software application may have amazing capabilities, but it's just an empty database. And the full value of a PMS database is not in the software. The value of a PMS database is in the data population, which only we, the users can do.
And this development is expensive. Much more than the cost of purchasing the software and paying for the annual maintenance fees over a number of years. We need to invest in time and in money. If we want to develop an in-depth PMS, a system which will allow us to meet the majority of Element 4 KPIs, and with continuous improvement some day meet all of them, we must do it ourselves. And we must allow ourselves plenty of time for the development of that system.
We must also train the users. Training is the most neglected part and inadequate training the major reason for failure of PMS in shipping companies. If people on board do not utilize the program to its full potential, all our investments have gone down the drain.
Developing a PMS is a full time job. If we don't underestimate this, we will soon see our investment pay back. We will soon see the cost savings and the reliability gains. We may realize that we meet all Element 4 KPI's, up to and including stage 4, and have very solid supporting evidence for anyone wishing to audit us." he concluded..

Antonios Vrondissis, Andriaki

Antonios E Vrondissis, quality manager and DPA, Andriaki Shipping talked about the issues of convincing staff to adopt new processes.
"People on the ship are getting sick of us sending new requirements,"he said. "They said, "it's like being on a treadmill"."
"We say "don't think like a mouse, think like your mind. Don't you want to know more than you do today?"
"But at the end - we should hopefully have a low cost, safe and efficient operation."
"A process should always get better," he said. "With knowledge and experience it improves over time."

"Every company can improve by utilizing their existing resources and that's the way it should be done if we want to be profitable."
To start, a tanker operator should "do simple and cheap things first and quickly," he said."Do not try to do it all at once. Set up a plan and do it in stages. Some small improvements can be major improvements."
"Trying to get to level four in one go will get you into trouble," he said.
Mr Vrondissis also stressed it was important to get together more to discuss problems and new methods of working, rather than hold meetings in secret.
"We need to set up a plan and do it in stages. Also try to work on two or three top priorities as working on more than that can diffuse the effort, energy and resources" he warned.
"Celebrate, acknowledge and reward accomplishment," he said. "Get a positive environment for improvement. Bring up continuous improvement issues in all meetings."
One plan was to put an English teacher onboard all of its vessels, and now every one has an English teacher onboard. "A lot of charterers look for vessels with an English teacher onboard," he said.
"Look at your industry and competition and best practices," he said. "Competitors can show you a better way. Look outside your industry - e.g. to the airlines. Be hungry for new ideas and new ways to improve."
"With the amounts of data that come in, the computer is the most logical way to go to manage it," he said.
"Take your time in choosing a system - make sure you talk to companies that have installed it. Configure it to map the way you work."

Stephan Polomsky

Stephan Polomsky, managing director of Transocean Shipmanagement, talked about the importance of the shipping industry controlling its safety, rather than authorities.
"If the shipping industry loses its self control mechanism we are all in a disaster," he said. "It is very important that we can maintain the self regulation of our industry."
"We don't want competition between the classes; we don't want more rules; we want stricter appliance of the existing rules."
Mr Polomsky was concerned that TMSA would just be an extra burden on tanker operators. "We have to push that TMSA is very integrated in normal vetting procedures," he said. "The key word is always harmonization."


Burden and image

A discussion was held on whether TMSA was an additional burden on tanker operators on top of an already enormously complex burden keeping up with all the rules and requirements, or if it would lead to a possible simplification, or convergence, in the amount of rules tanker operators need to follow.
Dimitris Lyras, conference chairman, said that TMSA could lead to a simplification in the number of rules tanker operators need to follow, because it gives an easier way for them to communicate the quality of their management systems.
Mr Lyras also said that the tanker industry's image could improve, if its quality was seen to be assessed by a customer rather than by a regulator.
"Everything which improves the public opinion of our industry is essential," said Mr Polomsky. "We have to have influence on the rules and regulations to make this workable."
Mr Polomsky said he thought that there could be an element of charterers transferring their responsibility for shipping quality onto the tanker operators. "They are asking you to be honest and then they come along and check," he said. "At the end of the day they will always blame you."

Mr Atre said that he thought that the image of the tanker industry, and by extension the way local regulators look at it, depends on the number of serious news making incidents it has.
Captain Reppas said that, in general, a continuous improvement approach should reduce the number of incidents, the same way that vetting and inspections have done.
Captain Hatzikyriakos from OSG said that the only way that the image of the tanker industry could be improved is through more positive media coverage, or industry spin doctors. "The industry is not recognized for what it is offering," he said.
Dimitris Lyras, conference chairman, said that having a spin doctor, seen to be telling lies, would be a very bad thing after any accident, since it would make the industry look much worse than if it was completely honest.

However he said that tanker operators should all act as spin doctors for the industry in their own regions of the world, spreading the message of the good things the industry is doing.
Captain Hatzikyriakos said he agreed with the US Government on the tough stance it has taken against seafarers for falsifying logbooks and bypassing oil water separators.
"The US government is right," he said. "We should have done something. I agree with them."
One audience member said that he did not think that the image of shipping had been a driver for TMSA. "The public in general is not concerned," he said. "It is all about liability. Oil companies want to move more liability onto the owners."
Mr Atre from NYK said that tanker operators can be found liable for things which are not their fault. "In the US, if a ship collides with you and you spill oil, you are liable," he said. "If something happens in the US, you are liable - period. The high end, bushy-tailed attorneys in the US want to prosecute the company."

Patrick Mathy from oil company Total disagreed that liability shifts from the major to the operator.
"After the Exxon Valdez - a lot of oil majors looked at the marine business. They realized - even if the operator is another company - the main responsible party is the oil major," he said. "Total's vetting department is operated without any interference from commercial people."


Vice Admiral Kechris, K C Lyrintzis

Vice Admiral Kechris, deputy managing director, K. C. Lyrintzis Group of Companies, said he thought TMSA could create a continuous improvement culture.
The principal concerns were how objective a tanker operator's assessment of its score would be. Also, how the new requirements could be practically implemented; whether it would improve safety or just add more paperwork; and whether the shipboard personnel could absorb the additional workload.

Apostolos Belokas

Apostolos Belokas, managing director of International Business Consultants, said he thought the biggest new things that TMSA requires are updating the management system, computerized planned maintenance, risk management, change management, crew training, communicating planned changes, and using KPIs to monitor and improve.
"TMSA is not a project, it is a way of living," he said.
Change management involves explaining to staff the need for change, making them want to participate and support the change, knowing how to change, implementing the change and reinforcement to keep the change in place.
Five common problems with change management include operators not understanding that they have to deal with change; aiming for compliance with a fixed standard rather than continual improvement; management focusing on expense minimization rather than investing in cultural change; poor communication with crew; and lack of resources allocation.
Mr Belokas thought that ISM code was actually lower than stage 1 of TMSA, which is commonly thought of as ISM level.
He noted that OCIMF has not offered any reward to tanker operators for aiming for high TMSA scores (such as reduced inspections)
Tanker Operators who think they are already at stage 4 are probably either "in the wrong market or assigned the wrong role," he said.

Kamar Zaman

Drewry Technical Services managing director Kamar Zaman explained a little bit about the tanker industry today as he saw it.
He pointed out that both charterers and shipowners had been considerably reduced in numbers down the years through consolidation. For example, taking the oil major charterers, these had fallen in number from 14 to just seven Shell, ExxonMobil, BP Amoco, TotalFinaElf, ChevronTexaco, Repsol and PhillipsConoco.
Only three of these oil majors figure in the top 10 VLCC charterers with Shell being at the top, followed by the Indian government concern IOC. ExxonMobil was in third place followed by ChevronTexaco. Then came Ssangyong, Vela, Reliance, CPC, CSSA and SKS.
Zaman thought that the oil companies continued to secure safe modern tonnage by dealing with large trusted owners, which has greatly influenced the consolidation within the shipowning fraternity.

Panteleimon Pantelis

During the past seven years the tasks on board ship connected with the new requirements have shot up by 23%, estimates Panteleimon Pantelis, director of services Ulysses Systems. Form types have gone up by an estimated 35% and manuals by a horrific 65%. "What will happen in the next 10 years?" asked Mr Pantelis.
One thing is for sure that the roles on board ship will not increase at all and maybe even decrease. Hence people will become more reliant on software. The TMSA scheme will bring more features into the software and get more people using it, he thought. The software will become "mission critical" with base management strategies included in the software.
"Buying software now will decide the success of the company, but what to buy is of great importance and people will have to learn this skill," he said.
As for the software lifecycle costs, there is a certain amount of misunderstanding surrounding these costs. For example, the utilization cost is the highest and is mostly underestimated by the shipping industry. The initial purchase cost is only a minor fraction of the software lifecycle cost, but this is grossly overrated, Mr Pantelis thought.
The return on investment can be dramatically increased by well designed software that prioritizes the reduction of major recurring costs, such as utilization costs, maintenance and re-training costs. A well designed software suit facilitates the reduction of these costs as a natural by product of software usage.