Kim Skaarup, the CEO of e-procurement platform ShipServ, writes exclusively for Splash today.
The proposal for an experience building phase (EBP) put forward by a number of flag states at the recent Marine Environmental Protection Committee meeting (MEPC 73) showed that we can expect a number of curve balls en route to the implementation of the global 0.5% sulphur cap in 2020. It was a move that was ultimately rejected, and while the supporters of the EBP were keen to stress that it would not delay the implementation of the regulation, it would have changed and diluted its sentiment. This would have set a dangerous precedent.
Why? Because it is critical that shipowners and operators are not given undue false hope and slow down their plans to mitigate the financial impact of the regulation. While the 0.5% sulphur cap will undoubtedly transform the industry and cause real pressure on operational expenditure (OPEX), it is also forcing companies to positively, and progressively look at how they can improve the efficiency of their operations. Not just in terms of reducing the impact of rising fuel costs, but analysing every aspect of how all vessels in their fleets are run, so that they can maximise the performance and profitability of their assets.
What is interesting is that it’s not just the traditional areas of optimisation that are now being scrutinised; ultimately, it makes little sense to make gains in one area only to be let down by inefficiencies in another. So, while clean technologies, smart weather routing, or automated manoeuvring at sea and docking in ports have been the ‘go to’, we are also seeing previously less considered areas of vessel operations coming to the fore. E-procurement, and the process of generating OPEX gains and time efficiencies from how supplies are sourced and purchased for vessels is a good example. It is also an area where significant strides can be made in tandem with the ongoing digitalisation of shipping.
This has been the foundation for the rise of the e-procurement platform that uses the latest technologies and systems to create an efficient, reliable and data-rich, insight-driven solution that works for both shipowners and managers, as well as the tens of thousands of suppliers that serve the industry. Marine buyers benefit from increased productivity of 30% from procurement time savings, reducing OPEX by optimising and lowering procurement spend, as well as using actionable intelligence to maximise the performance of suppliers and create better and more dynamic relationships. Suppliers also have access to a virtual marketplace of active buyers, where they can build and profile their brand, increase efficiencies and the speed of processing multiple transactions, responding to RFQs, as well as driving customer retention and winning more business through faster turnaround times.
Critically, the industry has only scratched the surface of the potential for e-procurement within maritime, and the widespread consensus is that rapid developments will continue its evolution, and further increase its importance as a fundamental element within the vessel optimisation challenge. For example, increased functionality will enable full transparency over spend and improve automation and real-time, fleet-wide inventories. This will give procurement teams genuine visibility on what is being bought – and its value – by every vessel in a fleet. Unlocking the true value of meaningful data will also provide procurement professionals with actionable intelligence to consolidate and optimise their supplier base and move more spend under contract. They will also be able to embrace category management in order to take a more strategic approach to how procurement resources and processes are organised, concentrating on specific areas of spend.
On top of this, the future is bright and ripe for more even more progress.
Developments in cloud computing systems will drive more safe and secure application-based interfaces and central analytics that make automation easier and more cost effective. Blockchain will also solve the challenge of siloed data and increase further efficiencies by distributing data to known and identified parties in an agreed network. And finally, Artificial Intelligence and Machine Learning will also solve the problem of the current lack of standardisation where product descriptors are different from one buyer to another, by analysing and intuitively recognising specific products.
The opportunity of developing a holistic ecosystem that optimises every aspect of a vessel’s operations is huge for shipping. But all areas must be thoroughly analysed, challenged and parties must work collaboratively and intuitively with each other to achieve this.