New Solution on Steer: Inventory Management
Steer adds another new exciting solution, Inventory Management, to its growing list of solution...
Over the past few decades, the maritime and shipping industry has undergone a tectonic reinvention. Some of the progressive companies have embraced digitalization and are now starting to see the business results of their initiatives. For most others, key aspects of their business operations remain firmly anchored in the past, dependent on manual and paper-based systems. However, the pandemic and the uncertainties to the business environment are fast-tracking digital transformation in many such companies. This is aptly complemented by a push from the local governments, evolving customer expectations, an imperative to reduce operational costs.
Companies are fast realizing that in order to maintain a competitive edge, they must adopt a digital mindset and build a digitally connected business to stay productive, customer-friendly, efficient, and competitive. Progressive companies are embracing the same digital breakthroughs that are disrupting other industries. Among those disrupters: connected platforms, cloud-based services, mobile devices and apps, sensors, and other Internet of Things (IoT) technologies and technologies that enable data-driven decision making. Although the rewards of a digital transformation can be significant, so are the challenges to making it happen. To succeed, carriers must adopt a structured approach to defining a digital vision and integrating new technologies, capabilities, and mindsets into their traditional way of working. The industry is still in the early stages of digitalization, and most companies have yet to achieve significant progress.
With the help of this blog post, we hope to shed light on the digitalization imperative and the opportunity which it presents for companies to reinvent their operations.
A study by Oliver Wyman suggests that the cost reduction over the lifetime of a ship through digitalization of operations could be anywhere between USD 2 - 3 million. But the overall benefits of digital transformation far exceed just the imperative for cost reduction. From ensuring the proper functioning of expensive equipment used in shipping to streamlining procurement, requisition, and inventory management, digital transformation in the maritime industry is an absolute must if the organization is to sustain itself.
Seamless communication and stakeholder management - Most of the companies in the shipping and maritime industry have intricate partner networks that include port authorities, terminals, shipping lines, trucking, and logistics companies, and off-dock storage providers. To be truly effective, companies must look to include all their various stakeholders in their digital ecosystem to promote real-time visibility and efficiency. By providing external access, these platforms could eliminate inefficiencies and dependencies and services let individual partners expand their businesses without adding substantial new infrastructure or equipment.
Infrastructure monitoring and maintenance- IoT-backed smart sensors help shipping companies and port authorities and terminal operators track, operate and maintain the physical infrastructure and facilities they manage. Sensors that are embedded inexpensive equipment can transmit real-time data about operating conditions of berths and other infrastructure. Used in this way, sensors can reduce the need for annual inspections and provide data that helps owners schedule preventive maintenance more precisely. Many sensor-based structural health monitoring systems cost only a fraction of the structures themselves, and this can mean a relatively fast return on investment (ROI) by ensuring lesser downtime and outages.
Reporting and analytics - Today, many shipping companies use onshore fleet centres to improve visibility into voyage execution (including vessel position and speed and bunker consumption). However, they rarely derive the full range of benefits from this wealth of information. In addition to providing visibility, fleet centers can optimize decision making by bringing responsibility for key decisions onshore. The service managers staff can apply advanced analytics that considers all available data on voyage execution as well as external factors (such as expected weather conditions and port congestion) to determine the optimal voyage routing, speed, and trimming.
Cargo/parts inventory management- Procurement, requisition and inventory management- Procurement warrants special attention, as its digitalization can result in considerable direct savings. With a central database and integrated third-party tools, shipping companies can ensure that they bring all stakeholders on one platform to optimize processes. Shipping carriers around the world are already embracing digital procurement solutions, with major players in container and bulk shipping leading the way. You could know more about requisition and procurement in the maritime industry here.
Reliable inventory management systems can help track all cargo and goods across assets to ensure optimal efficiency in the system. Service managers are aware of the inventory status in real-time thereby improving productivity. An integrated system could potentially analyze information in real-time and shares it with staff to identify operating bottlenecks and initiate appropriate action.
Predictive maintenance (using IoT and AI enablement)- Onshore analysis of vessel machinery performance data can dramatically improve fleet maintenance. For example, AI systems can identify performance patterns that signify an upcoming machinery failure and then warn crews about the need for maintenance or replacement. Senors coupled with IoT-enabled systems could send out signals much before a piece of equipment needs to be replaced. With this capability, a carrier can both reduce maintenance and procurement costs by nearly eliminating emergency replacements and minimize the time a vessel is ‘off hire’ owing to unscheduled maintenance and technical failures.
Unified Project Execution- Companies in the maritime and shipping industry are fast heading towards what we call an integrated and connected business, which implies technology has the ability to effectively collaborate with all the disparate stakeholders within one platform. In a number of shipping companies, legacy systems often operate in isolation and do not communicate with applications which the stakeholders use. Looking into the future, companies are ensuring that the technology seamlessly integrates all systems which would allow real-time availability of data.
Effective reporting and dashboards would allow management to allow informed decision-making. Data could be pulled from different systems to make decisions based on built-in logic which could then be approved by executives. Eventually, the entire business and all its stakeholders would be connected over one single platform which would allow organizations to significantly improve productivity.
Customer external access- If your systems could provide external access through an app, it would significantly enhance the customer experience. Potential customers who receive instant quotes or are able to raise a ticket for an issue without staying on queue with over a call center would soon be the differentiating factor in the industry. After an order has been placed, the customer expects real-time reports on the location and condition of the cargo. Leading carriers are already working to improve the online experience. BCG research indicates that Maersk has a portal that enables customers with one-stop access to online quotes, remote container management, and container tracking. Understandably, such services both improve the customer experience and enhance a carrier’s ability to increase revenues.
Automation and eliminating human intervention- It has become common practice for shipping companies to assign manual tasks, such as the processing of accounts payable and receivable, to either internal teams or shared-service centers in low-cost locations around the world. In addition to personnel costs, manual processing entails the possibility of human error that can cause delays. To a great extent, digital advancements can automate these tasks, minimizing errors and ensuring compliance with company policies. Digital solutions can streamline various other services such as claims management and the teams working on non-value-adding activities could be deployed in places where their skill-sets would be put to better use.
Additional Revenue Streams- Digital transformation allows shipping companies to focus on business model innovation and launch internal projects which could over time become independent business units with their own revenue lines. While the proposed benefits of digitalization are the results of helping organizations and their partners cut costs and operate more efficiently, the systems can also generate new data-based services, which might offer the companies additional revenue streams. BCG research indicates the Port of Antwerp and a commercial partner created a data exchange platform that compiles and analyzes data from shipping and freight companies, warehouses, customs brokers, and other port constituents. The partners plan to monetize the data, which includes ship arrival times, container weights, collection times, and transport instructions. Such information can help individual users reduce costs through better planning. Apart from the example pointed out in this instance, various other new and innovative business models which could be experimented with where the organization can look to serve pain-points for potential monetization opportunities.
The benefits of digitalization are clear and you would have to jump on the digital bandwagon sooner than later. This digital transformation needs to dovetail with a shipping company’s larger goals, whether those goals include finding extra capacity in existing assets, reducing operating costs to improve the bottom line, increasing market share by being more convenient competitors, or using data-based services to generate additional revenues. Since any digital transformation plan must be firmly anchored to a larger strategy, top management must spearhead the effort rather than delegate it to the head of the IT department.
While the imperative is established, what might be hazy is how could your company get there – building applications ground-up would not only be expensive but also extremely time-consuming. There might be a number of platform alternatives to choose from, but the key business challenges they face should guide the selection process. While it might be tempting to go with off-the-shelf solutions, they are indeed poor support for your complex internal operations or could have trade-offs on how well they could be integrated with your existing IT infrastructure. Maritime MRO Solutions, like Steer, might be another viable alternative as they enable easy customization and flexibility.
Once you have your core systems in place, Steer No-Code MRO Suite with its pre-built templates would help you launch applications using a simple drag-and-drop interface in only a couple of hours. Additionally, you would be able to build other supporting applications which would complement the suite of existing modules and help enhance the extendibility of your digital systems. Couple this with process automation and integration and your organization would be ready to navigate the dynamic business environment.
Connect with one of our customer success team here for a demo to gain a deeper understanding of how Steer’s No-Code MRO solution would be ideal for your organization and take your first steps towards building a digitally connected business.
Sid Wadehra is a seasoned and a result-oriented professional with varied experience spanning geographies from leading multinationals to fast growing start-ups. His industry experience is well-complimented with business education from a global business school. Sid's expertise include digital transformation, corporate strategy, and innovation management.