News Article 08/02/2008

Learning to anticipate (Ship Management International, Issue 11, January/ February 2008, p 26-31)


Given the volatile and quick moving nature of the shipping industry, owners and managers are constantly seeking ways to improve the way they operate their ships and move their cargo. Since one of the keys to any successful operation is timely coordination between the shipping company’s office and the vessel, finding ways to communicate effectively and speedily is crucial. Or so say the experts.

John Veson, President of Veson Nautical – a US-based software developer for the maritime sector, will use the forthcoming CMA conference in Stamford, Connecticut in March to press home the need for the shipping industry to embrace e-commerce in a cost-effective manner that is both low risk and quick to deploy.

Connecting shore-based offices with their personnel, representatives and vessels in a way that does not rely on Excel spreadsheets and manual data entry can be a challenge, he admits, but the right method can give charterers, on shore office personnel and owners access to information when and where they want it, with online communication that is user-friendly and hassle-free.

“The end result can offer vessel operators, as well as the ship’s offices immediate access to vital operations data. Relevant office personnel could be updated on the day-to-day vessel activities, which is critical to completing commercial voyages as profitably as possible,” he will tell delegates.

The industry is reaching a point where services are getting significantly less expensive with regards to bandwidth and that changes the nature of technology, he claims, because companies are spending a lot of money maintaining systems onboard ships now with regulations and things like that.

“You need systems onboard to manage the technical operation of the ship for safety certificates as well as maintenance records. This very much has to be done with the systems onboard right now. You do have to invest in technology onboard ship anyway and the decreasing cost of communications will make people think about the types of systems they want installed. Now it is expensive for them when they have to visit every ship and try and keep the technology up to date. I think having higher this bandwidth at lower prices will make sense for remote management of technology on the vessels themselves,” he said.

Companies like ShipCentric with its much used Dynamic Ship Supplier and soon to be introduced Ship Manager management systems, believes in utilising standard operating platforms such as Microsoft to maximize the case of usage. According to Torben Brammer, company President and CEO, it seems that people are interested in getting standard software systems instead of having to go out and build everything themselves. “Most of all it’s about that the customers having something they can easily adapt to and that is where these systems make a difference. If the price is good that is an advantage because the client can relate to the system and they can get local support and have the packages often in their own languages. That makes a big difference to them,” he said.

“They also want to ensure they are not locked into one developer. We are trying to talk to a variety of different companies to identify the needs that they want to measure and pre-build these measurements in the systems. We want them to set a standard that we can live up to,” he told SMI.

As Himanshu Joshi, Vice President of Teledata Marine Solution, stressed, there has been increasingly more momentum in the market over the past two years. “Companies are getting more IT savvy especially when it comes to fleets of over 15 ships which are becoming more difficult to operate if you don’t have the right systems onboard. With respect to vetting procedures and TMSA for instance mandatory planned maintenance systems mean that ship managers are moving more rapidly,” he stressed.

The attraction of management systems that anticipate problems is one that Ulysses director Dimitris Lyras believes is increasing in popularity in the shipping industry. He was recently quoted in the press as saying that implementing Ulysses’ Task Assistant ship management system could save the owner of a medium-sized fleet as much as $85,000 per ship each year against a per-ship implementation cost of about $3,800. Areas of potential saving, he claimed, included messaging, insured and uninsured losses, system familiarisation and supervision, vetting, co-ordination and regulatory compliance.

But as he emphasised, when SMI met up with him in his London office, Ulysses’ Shipping Software is based on some of the principles of cognitive science and primarily it’s an approach to information that’s not related to the information itself, “but what the information is for. So if e-learning and enterprise software is going to really proliferate from being a back office tool to something that’s used every day it has to understand what you are doing.”

He added: “Shipping is a very structured industry, most industries are structured, but shipping is one of the most structured because it’s not that new. So whatever could happen to a ship, or whatever you want to communicate to the ship is something that can be anticipated, you’re not going to get something absolutely new.

“This would be the case if you were in the gaming industry because you may communicate something that you may not have anticipated before: you may build something you haven’t anticipated, you may find a market you may not have anticipated. That’s not going to happen in shipping. Shipping is about moving cargoes around, moving them safely without incident and moving them economically, and that is quite predictable.”

Dimitris Lyras puts it all in the context of the email which as a system doesn’t have a clue what you’re doing except knowing who the sender is and who the receiver is. “You could have a system that understands the shipping industry where all the content has a place. That way it gets automatically distributed and directed to the right people. That’s what we set out to do. Our systems actually map everything you can do in a company, whether you’re doing it by data management or through communications,” he stressed. “No software company has mapped the entire activity of an enterprise and a business and enabled people to create nodes such that all the information is distributed by itself – you don’t have to channel it, you don’t have to tell someone that this is important so the Managing Director needs to know.”

So it is all about anticipation. “Yes, the important ones like things going wrong. A lot of people think structuring is about getting the paperwork out of the way or getting people’s names on crew lists, that’s not what structuring is about. That’s what you want to avoid, you want to avoid people writing names on lists that already exist somewhere else, this is bureaucracy. You also want to avoid having people write things and then think who needs to know this and then writing the stuff again because there isn’t enough detail and then waiting for someone to respond in order to start work. Basically the structure of an enterprise can be mirrored today electronically.”

“We could apply this to any industry. It’s a question of people getting to grips with the idea that it can be done. There are reasons why it isn’t being done and that is because the primary software companies in the world can’t do it, it’s not their game. Neither is e-learning their game. E-learning and structured information in the enterprise is not the domain of Microsoft or IBM or any of these people because they can’t easily transfer that to another industry while industry specialists, such as ourselves, are in a better position and always will be,” he said.

According to Lyras, the most important part of e-learning is the ability to simulate, like a flight simulator. That is the domain specific. Most of that work, he says, is domain specific. But are some sectors more understanding of the benefits of the necessity for this type of system than others?

“Yes, I think there’s a natural structure. There’s a natural hierarchy of people who understand and engage in this to a different degree. The primary issue is that the top people in the company have to understand what can be done with information technology today, and e-learning. But the top people in the companies don’t always feel that it’s their job. It’s understandable when an owner doesn’t think it’s his job – because it isn’t. Shipmanagement isn’t really the owner’s job, it’s a fleet manager’s job within the shipmanagement company. Ship managers, third party ship managers, should know but the problem is that third party ship management is structured in such a way that it isn’t really equivalent to a fleet management part of an owning company. That’s a pricing issue, the pricing and the way the industry is structured.”

Taking the argument further, Lyras stressed that is was all about the way the manager was paid. Third party managers are asked to do a fixed crewing cost and they’re asked to apply fairly fixed overheads and budgets. That, he claims, creates a completely different approach from an in-house fleet management organisation within a wholly owned company. “So at the owner level they shouldn’t be involved in IT and know what IT can do for the shipping industry, but at fleet management level they should, and they do. If you go to a fleet manager in an owning company, he is more likely to take quite a bit of interest in what is going on in IT. But if you go to a ship manager it’s slightly different because again the relationship with the owner isn’t at all what it is between the fleet manager and the wholly owned company – there’s a dispute between who pays for what, costs get pushed between ship and shore,” he said.

“When it comes to IT costs, ship managers may want to pass them on to the owners. If they pass it to the owner it’s the owner’s system not their system. In my view, shipmanagement has about a year and a half before it figures out what it’s doing with IT, and that’s because of who owns the IT and who will pay for it. The person that pays for it owns it, the ships are owned by different people and that means that the company will have all kinds of different systems.

So what does the future spell out for management systems?

“Profiling of people’s activities is the future: closer and closer profiling of activities within an industry is where it’s going to go,” he said. “Activity based takes more upfront work, you have to structure the work, for example – a defect on a ship. This will always have an effect on some process, either immediate or eventual. It always has a cause, either an immediate cause or a root cause. It always has people interested in it; depending on what the cause is; what the root cause is; what the immediate process effect or the eventual process effect is. So if you have the booster pump today, who needs to know?

“Does the fact that it’s the booster pump, tell you who needs to know? Well yes, in combination with what else is wrong; if it can endanger a major process, yes. If one of them is down it can’t endanger, if two of them are down, or if you’ve got a booster pump problem and a fuel viscosity problem at the same time, then yes you could endanger a process that affects somebody high up, Mr Lyras added.

So is the interest in these types of systems strengthening from the owners’ perspective?

“Very much so. You’re getting senior people that have years in the industry, that never used much software and didn’t use much email, particularly interested in a lot of detail. The younger ones say under, maybe more so; but even the senior people are getting heavily involved, yes”

And is that because of a necessity, because of the fact that they need to be more transparent?

“They’re accountable, which means that they have to know things much earlier on to take an approach that satisfies third parties,” he said. “Besides that, they can control their costs better as well. They can anticipate cost, they can learn from their operations; they’ve got something to look at, otherwise they have to get up and go on the ship and open everything up. They can’t watch everybody.”