How to practically leverage digital solutions to increase productivity and reduce energy costs
Digital technologies provide many opportunities to improve vessel performance. However, knowing where to begin and why can be difficult. In this article, Aaron Holton, CEO, Tres Solutions explains why it is important to set a vision, understand investment decisions, and identify priorities and solutions.
When you opened your email today, there were likely at least a couple of articles on the latest digital technologies and trends changing the maritime industry. You can probably recall the panel discussion(s) at the shipping conference you last attended that talked about the digital disruption and how artificial intelligence, machine learning, augmented reality or some other amorphous technology is changing the game. More likely than not, your boss has also seen a similar flow of information that has found its way into strategic and operational discussions for your company, which you are supporting.
Are you overwhelmed yet?
Don’t worry; you are not alone. There is no question that our industry is undergoing rapid digital transformation. The opportunities to leverage new (or enhanced) technologies to improve operations, commercial-decision making and fleet performance are endless and the benefits undoubtable.
Among the shipping executives we have spoken with in recent months who seek to improve vessel performance and analytics, for example, the issue is not in the options available. They face a more basic conundrum in separating hype versus reality – “where to begin”?
Tres has invested considerable time helping shipping companies answer this question. These owners are investing time and energy to identify the best solutions to solve a host of problems but face challenges in prioritisation, implementation or value extraction.
We think it boils down to being practical.
Many organisations run into roadblocks if there is a disconnect between the needs of various stakeholders, lack of buy in or if the identified solution greatly alters existing workflows from day one. These can all be driven by lack of adequate planning and sometimes trying to hit a home run on the first swing.
Tres developed a simple innovation ladder to help shipping companies navigate these challenges:
1. Set the vision. One of the biggest impediments to getting started is lack of a unified vision or competing interests. Projects never materialise due to lack of alignment among various stakeholders (e.g., technical, operations, commercial etc.). The vision doesn’t have to be perfect and it may change but at a minimum, everyone should be on the same page.
One of our bulk owner clients approached us with a clear vision – to increase productivity for vessels and shore operators by reducing noon reporting workload. They wanted to shift from five separate reports per day to one. Defining the vision in advance made it easier to develop a practical solution. We developed a holistic systems integration to achieve the vision, creating a single point of entry onboard then auto-populating all other mandated reports. This simple digital transformation saved more than two hours per day of manual work for vessels and operators. The effort also improved data quality and unsurprisingly, boosted morale.
2. Identify the ‘why’? We have met with a lot of owners who had grand visions for how to digitally transform their organisation. The innovation blueprint would make Apple proud. However, they unfortunately couldn’t answer the question of ‘why’? Investing heavily in technology simply because “that’s where the industry is going” or because “leadership wants to move in this direction” is often a precursor for a project’s failure. These projects struggle to gain momentum in the early stages or worse yet, fall apart after implementation given lack of buy-in or understanding of the benefits.
Once you identify the vision, ask yourselves why you are doing it. There will ideally be a pain point that you are trying to solve or greater insight you are trying to derive to improve your business.
A tanker owner client wanted a low cost means to stream high resolution data. The ‘why’ was to improve vessel efficiency and reduce energy costs. There were plenty of options but in doing their homework, they found that the cost-benefit rarely made sense. Traditional data logging solutions were expensive and mostly lacked insights that could help them achieve their vision.
Tres developed a low-cost integration using existing onboard VDR hardware and its TVA software platform. Instead of spending US $40,000 per vessel for a traditional solution, we identified a pathway at one-tenth of the price. By understanding the ‘why’ and then looking for practical ways to use existing systems/hardware, our client was able to increase granularity of its vessel performance data and drive optimisation projects that reduced excess consumption by roughly 10 per cent.
3. Identify 1-2 simple priorities. Whether we’re remodelling our home, sitting at an all-you-can-eat buffet or creating a vessel performance improvement strategy, we as humans tend to over complicate things. It is easy to overload our plates, identifying 5-10 things we would like to do to digitise our business, but this can quickly overwhelm you and those responsible for implementation and adoption.
It is important to agree on 1-2 priorities that are relatively easy to implement with the potential to drive the greatest impact. Is there a technology or integration that can streamline existing workflows and save your team/vessels time? Is there a tool that you can implement that provides simple analytics and diagnostics to your performance team, thus making it easy to monitor and reduce fuel consumption and emissions?
Another tanker owner has proven very pragmatic in this regard. They are keenly aware of the plethora of digital opportunities that exist, all of which have the potential to streamline vessel performance and operations. However, they have remained focus on rolling out solutions in bite sized chunks. This has allowed cost-saving initiatives to materialise and increased company-wide adoption of the technologies.
4. Identify the appropriate solutions. Once you prioritise projects, you have the enjoyable task of defining how you will execute. Will you build the technology or capabilities in-house? Will you outsource to an external provider? If you outsource, how do you choose between the various options in the market?
There are a lot of factors that go into making this decision, but in line with the theme of this article, try not to over complicate this step. It is easy to be lured in by all the buzzwords and fancy marketing, but your choice should come down to the level of impact on your organisation.
Should you choose to outsource, your provider should be selling a solution not a technology. If they are unable to simplify your lives and solve a problem, then move on. At the end of the day, technology should enable us to become more efficient and solve complex problems.
Partner with a company that has the flexibility to adapt their technology to your organisation’s needs. Your workflows do not have to drastically change if you choose the appropriate solution.
A notable tanker owner was able to do this effectively when selecting a vessel performance analytics platform. Key stakeholders were highly engaged during the selling, closing and planning processes.
Meetings often included the COO, key VPs and direct reports, who ensured their workflows were well understood and key priorities identified. This interaction allowed us to tailor performance analytics to their needs, which formed the basis for a successful partnership.
5. Get started. As a company, you now have alignment around the vision and the problem you are solving. The homework is complete. The only thing left to do is to get started. This is where company culture and leadership is extremely important.
Leadership should ensure internal and external messaging reiterate the importance of the new technology to their vision and strategic objectives. Back up your words with action – set KPIs to ensure you are driving impact from the efforts. Don’t be afraid to alter your performance management processes to support technology adoption.
We have several great examples of this in action. One shipowner client actively messages investors and team members about emissions-reduction initiatives that are supported by its analytics platform and processes. They have introduced incentives that promote vessel efficiency while also donating money to environmentally-friendly causes.
The digital revolution in the maritime industry is upon us and it holds great potential, but do not be overwhelmed. The hardest part is always getting started but if you stay committed to the process and continuously communicate the benefits to all stakeholders, you will be amazed at how you can practically leverage digital solutions to transform your business. Resist the urge to boil the ocean and remain practical. With a few small wins under your belt, your organisation can move more confidently into the digital era.
Article contributed by Aaron Holton, CEO, Tres Solutions
