April 19, 2017
When Maersk Line announced recently that it was collaborating on the Blockchain with IBM, we can be pretty sure it wasn’t because they read about the technology here. Maersk is such an industry bellwether that its interest will serve to drive the trend regardless of suitability.
So when Head of Future Solutions for Maersk Line Nils Bruus shared his plans to connect and digitalise the company’s fleet in Copenhagen recently, interest was intense. Where Maersk leads, others follow, though whether all will have the discipline necessary to make the required changes remains to be seen.
Maersk Line’s problem is simple. Neither its appetite for acquisition, huge scale or market clout can help it turn a profit. Different tools are needed. “To connect and simplify the customer supply chain we need to and have to go digital,” said Bruus. “
To take the complexity out of the supply chain we need to be better at integration and elevate the customer experience.”
It sounds like jargon but it reflects a laser-like focus on what Maersk has to do to achieve profitability. Digitisation of its assets is only one strand; others include letting customers book boxes via e-marketplaces – but the company has achieved step one; recognising it has a problem.
“In 2014 it took two to three days to become a Maersk Line customer and two hours to create a booking. By next year both will be closer to a few minutes,” said Bruus. “It’s not just about getting vessels online, you have to be customer-facing. To lead the industry and be competitive at new levels you must have digital assets and a network that is free of bottlenecks.”
This also requires a rock-solid business case and an understanding that you have to build on a sustainable platform. Getting the foundation right “means we can build digital assets, create advanced analytics and even perhaps build new businesses”, he explained. Avoiding integration bottlenecks means planning is critical, not least because there must be measurable results – in this case a better-designed, more efficient network and shorter port stays.
Maersk Line has 30 years of data on fuel efficiency data from more than 900 ships and has reduced its relative emissions, but the challenge of being smarter is that it until now it has relied on one data point in 24 hours: the noon report.
In future, Bruus said, Maersk would be working towards near-live reporting, potentially as often as every 10 minutes, enabling it to make real-time decisions. He also wants to overcome the issue of data reliability from manual reporting, avoiding input errors which don’t get picked up.
Maersk crew already get a KPI scorecard of their performance but often it doesn’t arrive until after they have signed off, so Maersk is moving towards data reporting at every watch change.
Do the investments justify the potential? “it’s a firm ‘it depends’,” quipped Bruus. “It’s important to create transparency and there are systems out there to do that, but if you do not have an engaged organisation you are just going to burn money. You can’t expect crew to drive performance if you don’t give them the tools. You need to consider investments that match the way you operate.”
The current challenge is managing legacy vessels and Bruus says he is lucky to find older ships with similar IT infrastructure onboard. If there are sensors fitted, Bruus estimates half of the data produced could be unreliable, putting strong emphasis on stabilising human and IT infrastructure. “We are saying we want to get connected but we have to consider the journey we are on. Is it worth the investment in a 20 year old vessel.”
He went on to explode the argument that opening the taps to satellite connectivity can provide all the answers to greater efficiency. “Satellite connectivity is one of the weakest links we have today and the cost of bandwidth is not irrelevant. I can assure you that if this is not addressed then it will be disrupted. Others will provide what the industry needs at lower cost.”
Admitting he was starting from ‘an analogue point of view’ gorging on data was not an answer. “It kills the business case. The first step is designing the data flow that creates a shared reality between ship and shore.”
Bruus believes that by giving better tools to crew, Maersk can take performance to the next level, creating a digital vessel where smarter use of data provides constant decision support and shoreside intervention. As an aside he dismissed the unmanned/autonomous ships discussion as “irrelevant in our business if we want to run a safe, reliable, efficient operation”.
Maersk is having to be specific about which areas of shipboard equipment are worth the cost of upgrade based on the biggest consumers and the value of the data that can be captured from them.
This shared ship-shore reality will be used to create situational awareness in port too and not just in the terminals that Maersk’s parent company operates. Plugged into shore networks, the ship will download a wealth of voyage data.
But this shared reality may not be the most comfortable place for everyone. The digitisation process is fully discussed with crew but they are expected to get with the programme and work as one team.
“We call this the Maersk Line Operating System, where we align procedures through meetings and calls with crew and superintendents to drive optimisation, basing handovers based on reliable accurate data. It’s 100% non-negotiable and some crew may not comfortable with that, but it’s just how it’s going to be,” he explained.
“The flip side is that when crew are in contact with shore their input receives equal weight of treatment because it is derived from shared data. Some supers may not like that, but it could be there are other places they can work. We have to start working as one team, breaking down the barriers to drive improvements much further.”