December 12, 2018
Does shipping give itself an unnecessarily bad press for its supposed lack of digital sophistication and slow pace of technology adoption? Could it be that there is plenty of innovation taking place but its value is lost in the din of headlines about autonomous ships and AI?
Not lost perhaps, but as Jon Key, Director of Strategy, Innovation and Transformation at V.Group points out, much of the good stuff takes place in silos so that value is not always recognised or evenly distributed. But this, like so much in shipping, is changing.
V.Group’s digital agenda stems in large part from a change of ownership and the new management’s vision of continuing to transform the company beyond a traditional shipmanager and into a global marine support services company. Digital, technology and data initiatives go hand in hand with people and process related improvements.
The areas of focus for digital initiatives include operational excellence and efficiency, colleague engagement, the customer journey and new products and platforms. Key acknowledges the buzzwords but says the core of the project is to address the areas that can drive and actually deliver measurable value to customers.
“You have to have decide for yourself what digital innovation is. There are lots of different versions of it out there. For us innovation is about ideas at the point of execution; new ways of doing things that must be put into action and must drive value. Digital innovation is innovation that uses technology and / or data” he explains.
Neither are there any strictures on what constitutes digital innovation; it could range from adopting WhatsApp to streamline communications to a $10m investment in an ERP system. V.Group has more than 60 digital innovation initiatives across the business with a co-ordination group to shepherd ideas into the transformation programme.
Among the largest digital iniatives at V.Group are the ShipSure 2.0 ERP system and Project Embark which aims to improve the experience of V.Group’s tens of thousands of seafarers as well as encourage recruitment and retention. Another initiative is to test new approaches and digital platforms across its operations, including the ‘Fleet Cell of The Future’.
These innovation centres range from Glasgow and Mumbai to Singapore each looking at different “Cells” with different issues and processes, including crewing, technical management and operations, acting as testbeds for new technologies and working methods.
GNS is playing a role in this process, providing a feed of ENC data and vessel position information into the Fleet Cells, one of a number of partners V.Group is encouraging to support the provision of the content it needs to improve vessel performance efficiency and reduce wasteful spending.
“The partner programme is designed to improve fleet management and operations and gives partners the opportunity to test stuff with us to see where it brings value,” continues Key. If we can add value together it can be rolled out across other parts of the business.”
Key himself is an incomer to the industry with a background at management consultants Bain & Co as well as experience with the Babcock Group and he has developed an unusual take on shipping’s relationship to technology and how it can inform what remains a traditionally-run industry.
“There are lots of reasons why some sectors have failed to get to grips with technology and no single answer, but I think the premise of the question is not quite right. We tend to beat ourselves up say maritime doesn’t innovate or have a “digital” agenda. There’s some truth in that but there is a lot going on in some areas. The trouble is, it tends to happen in silos whereas the real value comes from working across silos and in different parts of the value chain. That’s the bit that hasn’t happened so much … yet!”
Even so, Key thinks this is changing with an increasingly loud conversation about collaboration. “The other piece is the concept of value. The maritime sector understands cost in such great detail but it tends to have a short term view, it doesn’t focus so much on outcomes nor is it always as proactive as it could be.”
This is cultural thing, he reasons, pointing out that shipping is exceptionally good at responding and reacting to a crisis, whereas a proactiveagile project using new technology is much harder. The last piece of the jigsaw is the incentive for change, huge he reckons in terms of shipping’s measurable inefficiency. “However you classify it, it’s a huge number, billions at least, anything from 30-70% of operational value is wasted across the interface between the silos in which we operate.”
This means the potential opportunity equally runs into hundreds of millions of dollars; money that is there to lose for the established players and is mostly related to people and processes in the value chain. The scale of the problem has traditionally helped to discourage action; as perhaps the most global industry and making technology work consistently across such vast distances has, until recently, been a real challenge for shipping.
Nevertheless, Key admits that changing the status quo is quite frightening. “It’s much easier and more comfortable to keep things as they are. Plenty of people are making a lot of money out of that but there are still plenty of pain points which is where we are focussing. It’s a question of blending some simple things we already do with some new approaches, having the courage to try new things, trialling, testing and collaborating. That’s the first step, the more we trial and test, the more we learn.”