News Article 01/04/2009

Information management in a downturn
Digital ship, April 2009, p. 20-21

Is monitoring via software more or less important for shipping company when the market is low and the global economyis suffering? Improved efficiency through the availability of better information and data can be a key element in improving performance and lowering costs, writes Panteleimon Pantelis, director, Ulysses Systems

Anyone who has read management books has probably heard about how leading companies manage information so as to accelerate decision making, preparation, efficiency, and so on.
A low stock market and a low charter market are environments when good theory is found interesting but rarely adopted.

In such an environment, why pay now for something hopefully attainable later, when the company is barely overcoming costs today?

In the shipping business, an information- centric organisation could be described as one that pays a lot of attention to how information is internally distributed and disseminated, an organisation that distributes information to the right person at the right time, without spending tremendous conscious effort achieving this.

So what would be the bottom line advantages of better information distribution?
These could be in earlier risk assessment and a better chance of managing risk more cost effectively; better preparation before performing critical operations where sub-optimal procedural variations can cost a lot of money; and the prevention of incidents arising from uninformed areas in the organisation.

You can also lower costs by having less people minding paperwork and putting more attention on optimising spending and operation; have faster vetting approval on tankers and less time with sub-optimal approvals; and have far better internal compliance with new cost and efficiency policies and procedures.

Each of these areas can make a significant impact on the performance of the business.

Using information
To examine the benefits of earlier risk assessment and a how it allows risk to be managed more cost effectively, let's take some examples of risk assessment necessary in day-to-day ship management.

A report of seawater content in the stern tube lubricating oil shows a higher level than usual. Is this information something that remains within the technical department or is it a subject requiring some risk assessment from a commercial as well as technical standpoint?

If this discussion remains within the technical department, is there not a major likelihood that an early opportunity to inspect the stern gland may be lost if the vessel is promptly chartered to an area where stern seal repairs are prohibitively expensive and unreliable?

If the cause is fouling of the gland, such that there is a chance for it to deteriorate fast, could this not soon require immediate intervention and interruption of the vessel’s current employment or even salvage? So is this not a situation that needs to be assessed by senior management
and commercial management?

What is the cost of this information laying hidden from the stakeholders such that remedial action is late and costly?

How wise is it that the company depends on at least two levels of voluntary reporting for this critical risk?

Then there is the issue of better information distribution before performing critical operations.
Let’s assume that all the right people know about the water in the stern tube at the right moment, and therefore, all commercial opportunities in solving the problem are available.
Let’s also assume that the stern tube has been fouled by fishing lines and an in-water inspection and seal replacement is required.

How important is it to co-ordinate this exercise? How clear and transparent must this preparation be in order to minimize downtime and minimise the huge risk of lost employment?
For example, how important is it to be clear and accurate about the recent history of the stern gland, information about on board spares, the availability of standby replacements, the time required to deliver stand-by replacements, customs clearance procedures at the repair location, the decision to supply expensive components machined specially for the vessel despite the stand by requirement, or the use of the downtime for other repairs requiring immobilisation?

The convenience with which this information is managed and co-ordinated plays a major role in the avoidance of a delay, such as, for example, a delay in the delivery of a necessary stand-by spare part.

Furthermore, the ease with which all the stakeholders remain informed ensures that, for example, the commercial department is able to choose the optimal period between spot fixtures. A good choice of idle period makes a tremendous difference to the overall cost of the repair.
So how can good coordination save costs? The lost earnings for a day or two, or the missing of the next employment and a far greater financial loss, or the loss of an opportunity to perform other downtime work and avoid another several days of downtime.

Information management is needed in the prevention of incidents arising from uninformed areas in the organisation.

Now supposing that the ballast plan for clearing the stern seal from the water line, under the current circumstances, requires the transfer of fuel oil to a forward deep tank. However, when this transfer is made, the master and chief engineer are not in touch with the senior superintendent who remembers that the heating coils in this deep tank are defective.

The result is that upon completion of the stern tube work the fuel cannot be drawn from the forward deep tank resulting in a short cargo lifting for two voyages until measures are taken to bring the oil back to the aft tanks.

What is the cost of this missing information? And what is the cost of hundreds of similar examples? Savings can also be made by having less people minding paperwork and putting more attention on optimising spending and operation.

Now let’s assume that the master and chief engineer, in preparing the vessel for this repair, also have to perform customary port arrival and departure tasks as well as voyage planning tasks, crew replacement paperwork, new security procedures, stores list requirements preparation, spares receipt checks, safety checks for the stern seal repair, etc. How much time is spent managing unwieldy paperwork versus the time actually planning and optimising the current process?

Furthermore, with the current mandatory rest periods, does the crew not take tremendous risks by taking paperwork to the bridge watch, or spending less time on practical tasks while trying to keep up with a poorly designed bureaucracy?
Would you not expect better results if you could save half the present time spent on information management?

Better information management can also mean faster vetting approval on tankers and less time with sub-optimal approvals.

Suppose that, after a few months, the vessel undergoes a vetting inspection and the inspector wants to see the risk assessment checks made during the stern seal repair.He finds that a variety of checklists from the company’s SMS were omitted during the repair period: the diver coordination checklist, the stand by mooring contingency while the vessel was at the repair berth, the weather checks during the repair, etc.

We all know that oil companies view vetting as an assessment of managerial competence. They rely on spot checks and record checks. How can you maintain records if the SMS system is so complicated that it is unclear which item of paperwork pertains to each circumstance? How can you prove managerial competence without a tidy trail of records?

How can the oil company rely on an operator who cannot be expected to be able to prove diligence in an incident? Are oil companies not dependent on operators to give a good account after an inevitable incident? Will this not lead them to pay attention to how consistent the operator appears with respect to records?

Can oil companies afford to suffer the loss of public favour if, during an investigation, an operator appears unable to demonstrate proper procedure?

Internal compliance
Information management produces far better internal compliance with new cost and efficiency policies and procedures. So, in a period of low earnings, let us assume that a manager wishes to implement certain efficiency improvements.

Take, for example, the direct flow of critical information to senior management such as stern tube lube oil analyses, direct checks of spares requirements against imminent repairs and minimum quantities in compliance with risk assessment, or tightening of crew travel procedures.

How does a company implement measures designed to save costs? How can changes be monitored without spending more time monitoring the benefits gained from the improvements?
How can processes be monitored and how can they be altered without a long period of training and monitoring? And how can it be done with the low levels of staff that prevail in the maritime industry?

One significant step is the ability to manage information. Proper information management can ensure that progress in adopting new processes is transparent.
It can also ensure convenience in gathering, comparing, and making decisions based on adequate information so as to better achieve cost control.

Better information management is dependent primarily on convenience.
For example, e-mail has experienced tremendous growth simply by virtue of its convenience. In fact, many will say that e-mail collects more information than they would ideally wish.

This proves a very important fact - convenience is the key to collecting information. Therefore, an information- centric organization must understand that information management starts with the recognition of the need for convenient systems.

Systems must be proven to be usable and able to collect the information you want. We cannot bully people and train them to report. This has never worked in the marine industry because ships have high turnover, are remotely located, and are run by multi tasking managers.

No senior manager can be expected to learn two or three complicated applications in order to carry out his job. So how do we expect a captain or a chief officer to do so?

E-mail is a success on board due to its intuitive convenience, but of course it has its shortcomings. E-mail does not easily file and disseminate information further than provide somewhat labour-intensive means for personal filing.

Personal filing is definitely not the right tool for information distribution. For example, company staff that are not yet aware of the relevance of a piece of information, such as the heating coil example given above, cannot be expected to look for it in emails going back a year. So how would they be expected to anticipate the existence of this information?

The distribution of important corporate information must be as close to automatic as possible and must find the user with the right information at the right time with minimal required dissemination from the end user.

For success in convenience, we have to go beyond e-mail, which alerts the receiver when the sender sends the information. We must be able to put the information in front of the user at the time that the user is likely to need it, even if the user is not consciously looking for it.
We all know that people will not often rummage through records without knowing whether there is anything of value to the current activity. So, critical corporate information is often overlooked because it is difficult to find.

How would the junior superintendent know anything about the condition of the heating coils in the forward deep tank if he or the on board officer could find no mention of the condition or when the heating coils were last tested? How would the superintendent know how promptly stand by spares can be sent if he does not know the weight and size of each component?

E-mail must be enhanced so as to serve as a tool for dissemination of information and not just distribution.

Consequently, maritime applications must also be converted to tools that are actually used for the recording of information, by adding significant enhancements to their usability and convenience. The final proof is experience in the field.