gl best practice ship mgmt

8/12/2019 GL Best Practice Ship Mgmt

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www.gl-group.com | www.gl-maritime-software.com

Best practice shipmanagement study 2013

Overview and study results, Hong Kong 07 August 2013

Kevin M. BrunnDirector Clients & Markets

Ivan TamManager Clients & Projects

GL Maritime Software


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Introduction

Best Practice Ship Management Study | 07 Aug. 2013 | No. 2


Best Practice comprises all approaches, procedures, business models or tools that shipmanagers use to do their business smarter, safer, and greener i.e. to be on top of competition.

Ship managers are under increasing pressure. Overcapacity in the market is driving charter ratesdown. Ship owners face higher costs to finance vessels. Ship operators fight for cargo and drivedown their main cost block, which is fuel. Ship managers sit in the middle with increasing burdens

for the same management fees.

In 2013, GL (Germanischer Lloyd) and Fraunhofer Center for Maritime Logistics and Servicesconducted a study involving around 100 ship management companies worldwide to find out whatthey are doing to improve their operations and what they consider as best practice in theindustry.

We would like to share these best practices with you and to give you the chance to reflect againstyour own operations and get inspiration and ideas on additional improvement areas.

Presenters:

Ivan Tam, MSc Manager Clients & Projects, GL Maritime Software, Hong Kong Kevin Brunn, MBA, BSc Director Clients & Markets, GL Maritime Software, Hamburg


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GL Maritime Software is the software

provider and system integrator for the

maritime industry. We improve our clients

processes and decisions in ship

operations and fleet management, both

onboard and onshore.

GL-Group is the world class technical

advisor and trusted partner in

assurance, consulting and classification

for the maritime and energy industries.

We enable our clients to build and

operate their assets smarter, greenerand safer.

Key Figures

7,900 Vessels Served

6,700 Employees

200 Offices Worldwide


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C

ontents

A Market Overview and InsightsIvan Tam

B Results of the Best Practice StudyKevin M. Brunn

D Drinks reception

Share your experience on Best Practice with us and others

C Q&A / Distribution of your personal copyof the study


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GL classed Shanghai Express! 13.000 "#$! 3%%m &ong! de&i'ered March 2013

After only four months, Asia Northern Europebox rates reached their lowest level in more thana year.

Spot rates have fallen by more than 40% sinceJanuary 2013.

The intended rate increase by carriers failed Despite the state of the market, newbuilding

ordering has not halted. Giants abound - Largeliner companies are focussing on maximisingeconomies of scale.

More and more smaller container lines are forcedout of the East-West trades, because they are nolonger competitive

Trend towards consolidation of services

Nevertheless, containerised trade to grow by

5.5% With newbuild prices down, and advantages of

new efficient ships, vessel deliveries forecastedat 1.4 m TEU for 2013 (up 10%)

Market Summary First half-year 2013

Liner companies suffer from low rates CONTAINER

Global Containerised Trade

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Best Practice Ship Management Study | 07 Aug. 2013 | No. (



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Stable growth of oil & product trade around4%

Overcapacity of fleet continues

Earnings are at bottom, bunker pricessoaring

Time charter and spot rates continue todecrease (both falling by further 2%compared to 2012)

But, declining orderbook (down 11% from2012) could diminish supply demand gapin 2014

Future contracting is key to market balance

Newbuilding prices stable but low

Second hand market picking up (+10%)


Positive demand forecast, but still slowTanker

(Expected) Contracting

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Best Practice Ship Management Study | 07 Aug. 2013 | No. %



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Despite demand growth (7%) driven by ironore and coal, overcapacity in almost allsegments keeps market down

3 consecutive years of double-digit fleetgrowth

2013 deliveries significant, but declining Calm contracting and melting orderbook will

balance supply and demand after 2014

Earnings currently at or below operationalcosts, but rates expected to improve after

supply demand gap closes

But certain owners with good cash / fundingposition (e.g. Frontline) are able to leveragelow newbuild prices to replenish fleet withefficient vessels

Secondhand prices increasing


Bulker market to remain down Bulkers

(Expected) Contracting100

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C

ontents



D Drinks reception


C Q&A / Distribution of your personal copyof the study


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The best practice study serves as a guide to reflect ownideas, priorities and have a look over the fence

Collection of over 50 common qualitativeobservation and quantitative statistics acrossall companies

Derivation of 30 best practice measures inthe 5 key areas of all ship managers

Many connected context boxes with subjects

that came up

A Best practice is not understood as recipe thatfits in all circumstances to all companies.

Best Practice Ship Management Study | 07 Aug. 2013 | No. *



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Shipping companies are using the crisis to sortthemselves our study should help

We have asked around 100 shipping companiesaround the globe:

What are the areas you are working on to improve

your business? What have you seen in other companies you

consider as best practice?

Best practice in this study comprises allapproaches, procedures, business models or

tools that ship managers are using to do theirbusiness smarter, safer and greener, i.e. to beon top of competition.




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Recap: Is ship management an attractive market to be in?

3-5bn USD annual fee volume forship management services (not all 3rd

party)

Growing fleet with technically more challenging

assets

underlying stricter regulations

with more difficult to find crew

and increasing pressure and costs

and quality

will nurture professional shipmanagement be they 3rd party or in-house.

Growing, but... ... highly competitive

1 Clarksons Research, 2013



More than 1500 companies are managing 10+vessels Only 150 manage 40+ Many midsize and small companies in the

market


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Is looking at best practice common?




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Where are the biggest perceived challenges?




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Results summary: Best practice in crewing

In 2010, there were around 1.4 million active seafarers

Best Practice Ship Management Study | 07 Aug. 2013 | No. 1)


There is particular concern over current and future availability of senior officers,especially engineers, in the Far East and Indian subcontinent


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Best Practice Ship Management Study | 07 Aug. 2013 | No. 1(


Of all respondents are actively looking at best practice measures increwing

77% - organizational measures

73% - process measures

52% - IT measures

69%


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Best Practice Ship Management Study | 07 Aug. 2013 | No. 1%


Getting the same senior officers back onboard of the same vessel is

the ultimate goal of crew planning. Fewer crew changes mean lower

costs and more commitment from senior officers for their vessel.

Representative quotation:


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Organizationally, manyshipping companies re-insource crewing activitiesagain

Culturally, a lot of focus isgiven to training, development,

welfare package andteamwork.

Process-wise, re-insourcedcrewing processes needproper system support

Common observations Best practices

Invest in culture and teamwork

Invest in crew welfare packages

Integrate training, appraisal anddevelopment management systems

Use a combination of personal andcomputer-based training

Use an integrated crewing solutiononboard and onshore




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Best Practice Ship Management Study | 07 Aug. 2013 | No. 1+


Of all respondents are actively looking at best practice measures intechnical management



69% - IT measures

65%

Results summary: Best practice in technical mgmt.


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Best Practice Ship Management Study | 07 Aug. 2013 | No. 1*


Life Cycle Management is a growing trend in Technical Management

82% - focus on machinery

74% - focus on hull structures



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We have focussed too much on papers and we are asking every day

for more and more paperwork, forgetting the hardware, i.e. the

ships structure.




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Different organisationaloptions are tried out, fleetteams becomes common

Planned MaintenanceSystems standard

Life cycle management viewwith increasing importance


Organize along processes

Build processes around a state-of-the-art planned maintenance system

Harmonize and centralize themanagement of master data

Manage a key element of yourmaintenance budget: dry dockings

Pay attention to hull maintenance

Embrace condition based maintenance




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Of respondents are actively looking for best practice measures inFinancial Management


55% - IT measures

50 % - organizational measures

45%

Results summary: Best practice in financial mgmt.


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Growing trend towards business intelligence applications in shippingto integrate data and automate reporting


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Managers with field experience should be employed in Finance.




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Separation of finance fromoperations seen as issue

Too much complexity builtup in last years

State-of-the-art finance

systems not common


Integrate Operations with Finance

Simplify and harmonize the accountingstructures

Centralize the invoice registrationprocess

Harmonize and automate reporting

Invest in cash management procedures

Best Practice Ship Management Study | 07 Aug. 2013 | No. 2(



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Best Practice Ship Management Study | 07 Aug. 2013 | No. 2%


Fires and explosions are 3rd greatest reason for total loss of vessels,5th largest reason for accidents at sea, and fire safety is no. 1 in PSCfindings (every 5th detention)

Results summary: Best practice in quality & safety mgmt.


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Of respondents are actively looking for best practice measures inQuality & Safety Management



58% - IT measure

45%



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Best Practice Ship Management Study | 07 Aug. 2013 | No. 2+


The critical success factor is awareness of the individual crew

member that he can make a difference in both quality and safety, and

all focus of a Quality & Safety Management system is directed

towards this.




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Dedicated QS teams reportingto MD common

Staff awareness on QS issuesis critical success factors

Process supporting systems

start to come in


Move from QS to QHSE

Deploy and monitor regular crewtraining on safety issues

Nurture a no accusation / blameculture

Use integrated Quality & Safetysolution

Automatically produce regular qualityand safety KPI reports fleet-wide

Have risk assessment integrated in

regular processes

Best Practice Ship Management Study | 07 Aug. 2013 | No. 2*



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Results summary: Best practice in procurement




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Our goal is to move from just purchasing to a more strategic supply

chain management perspective. This includes materials and vendor

management as well as the whole transportation, storage, material

and information flow.


R l B i i


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Organisational and processmeasures common to increasedata quality

Purchasers are bound intoprocessing and have too littletime for sourcing activities

Supplier treatment changes toa more long-term partnerapproach


No purchase outside the system (nomaverick buying)

Harmonize and centralize themanagement of master data

Communicate with suppliers

electronically Plan demands fleet-wide

Embrace strategic sourcing activities

Reduce number of suppliers




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The role of information and communication technologies

Shipping has in the past largely underinvested into IT (e.g. compared to Oil & Gas industry) Despite crisis majority of respondents do not cut back IT budgets

Enabling function for best practices is well understood among respondents




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The role of information and communication technologies

Trends:

1. IT budgets are not being cut

2. A generation change in management is lowering barriers

3. Software usage strategies vary but come closer together

4. Buying criteria are stable

5. Many implementation projects fall short of expectations

6. The need for services around software is increasing




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Contents



D Drinks reception


C

Q&A / Distribution of your personal copy

of the study

Good fleet management solutions build in and support a


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Good fleet management solutions build in and support alot of shipping best practices

Best practice GL Solution

=9 Maritime Sot>are | 10.0+.2013 | No. 3%

Central and fleet wide management of masterdata (equipment, spares, jobs, certificates etc)

Fleet Equipment register inGL ShipManager

Use all available information to specify andexecute dry dockings

New Dry Docking tool inGL ShipManager

Deploy a central purchase platform and

communicate with suppliers electronically

Procurement module with e-commerce

interface in GL ShipManager

Focus maintenance also on hull integrity GL HullManager

Connect available data in business systems tomanagement reports and KPIs GL FleetAnalyzer

Reduce the own investment into onshore ITenvironment

Managed Server solution

Examples

The most comprehensive and innovative portfolio in


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Ship management Ship operations

The most comprehensive and innovative portfolio inthe industry

GL CrewManager

Complete crew managementpackage supporting planning,dispositioning, data / certifi-

cates mgmt., rest hours, ...

GL HullManager

Advanced hull integritysolution supports inspectionsand thickness measurement

processes based oninteractive 3D ship model

GL FleetAnalyzer

Business Intelligence solution,gets you information out ofyour different operational datafor flexible and powerfulreporting & analysis

GL ShipManager

Shipmanagers workbench tosupport all key processes(maintenance, procurement,

quality / safety, onboardadministration, etc)

GL SeaScout

Navigational decision supportsystem helps you navigatethrough bad weather without

damages on shortest route

EcoAssistant

Software system to save fuelwithout modifying your vesselby optimal trim

GL MachineryManager

Integration platform for allcondition monitoringmachinery information (e.g.visual inspections, vibration, oilanalysis, perf. monitoring)

GL FleetManager -Finance module

Complete finance system incl.Accounting, Controlling, Cash,

Intercompany for shippingCFOs

GL EmissionManagerSmart solution for onboardvoyage reporting and onshoreemission- and fleet

performance analysis

Provided By FutureShip

GL Maritime Software | Software solutions for increased performance | Slide 37

Currently in pilot stage


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Contents



D Drinks receptionShare your experience on Best Practice with us and others

C

Q&A / Distribution of your personal copy

of the study


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www.gl-maritime-software.com

Thank you!

[email protected]

www.gl-maritime-software.com

Ivan TamManager Clients and ProjectsTel. +852 6111 4320

Email: [email protected]

Kevin BrunnDirector Clients and MarketsTel. +49 381 673 11 37

Email: [email protected]

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