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Turning crisis to opportunity at Exmar

 

‘Do less with more’ – IT managers across the maritime industry may be familiar with slogans similar to this one, as budgets are slashed and costs cut. Christophe Vanneste and Ivan Renette, Exmar Shipmanagement, told Digital Ship about how they turned this ‘mission impossible’ into IT opportunity

 

The year 2009 will be remembered as a time of chaos in the global economy, with companies and organisations around the world having to learn to deal with massive contractions in business, downturns in revenues and restrictions in their access to credit.

With its position as the circulatory sys­tem keeping international commerce flow­ing, the maritime industry is especially prone to such changes, and has been severely hit by developments over the last 18 months (as noted in the article on page 8, shipping is down approximately 15 per cent across the board).

Exmar Shipmanagement, part of the Exmar Group, is facing these challenges head-on, and the company has, over the course of 2009, looked to reorganise the way it conducts its business and make its overall operation more efficient.

Modifying the ICT structure of the Group was a fundamental part of the pro­gramme, and one of the key factors in making this a success was to look on the economic crisis as an opportunity rather than a disaster, explain Christophe Vanneste, ICT director, and Ivan Renette, PMS project manager, Exmar Shipmanagement.

“I still remember when my CEO men­tioned at the first meeting of the year – ‘by the way, I’m cutting 10 per cent of your budget, I don’ t know how you’re going to do it, but just do it’,” recalls Mr Vanneste.

 

“Budget cuts, headcount freezes, ques­tions about whether you really need all of those people in your team, what exactly they are all doing. Things like controlling cell phone usage, instructions on cutting travel, questions on whether training you’ re providing is really needed – these were all looked at.”

“They ask if newer versions of software and upgrades are really needed. Someone told me they would volunteer to test the new version of Windows – I mentioned what the price would be to upgrade and they were shocked.”

The bottom line in every department’s operation, as far as the company’s man­agement was concerned, was that they ‘do more with less’.

“Is ICT able to answer these questions? I believe we can,” said Mr Vanneste. “We take these questions and generate oppor­tunities by applying changes.”

“The IT manager is trapped between two extremes – getting less capital for new investments but also needing to ensure a more flexible infrastructure to work in changing market conditions. It’s not mis­sion impossible, but it’s not really mission easy either.”

“We have been checking what invest­ment we can do that will save us money in the end, and came up with some projects which we are implementing right now.”

Restructuring

One of the first projects undertaken was an internal restructuring of the ICT department within Exmar Shipmanagement, and a migration of IT elements from other parts of the group into this new structure, to create a more comprehensive singular system across the company.

“Formerly we used to only do the IT for Shipmanagement, but we are now doing the ICT for the entire Group,” said Mr Vanneste. “We created a new domain, new platforms, and new servers.”

“For accounting and budgeting, we linked it more into the company structure and generated a price per unit that we could charge to internal customers – so it became ‘pay per usage’.”

“The result of this new accounting struc­ture was more transparency in costs, and getting the rest of the company more linked to the IT and making them feel more involved in what the cost of IT actually is.”

This transparency was also heavily linked with another of the Group’s major initial goals – improved performance measurement.

“We implemented a measuring instru­ment for the ICT financials, for example, including the resources, costs, etc,” said Mr Vanneste.

“Performance measurement is impor­tant, and the real target behind this is effi­ciency. So we first need to know what we are doing before we can act on it.”

“We are doing this for the communication costs, for example, looking at what exactly is our cellphone usage, what exactly is our ship to shore communication, where does it happen, why is the cost that high. Then afterwards we can think about alterna­tives like VoIP, BlackBerry mail, and so on.”

Support

A critical element in this restructuring of the IT system and department was a focus on creating redundancy in knowledge and skill sets, to make sure that any improvements introduced would be resilient enough to survive if different people were unavailable.

“I don’ t want to have one guy running around in the department who holds all the knowledge, I want this guy to be able to take a vacation at some stage, so we’ ve trained a second person, and then went on ‘training the trainer’ down the line,” said Mr Vanneste.

“We need to do that to guarantee service, and we did it with all of the skill sets with­in the IT department. We always have two guys who can go to the vessels, two guys doing the PMS stuff. There are more people involved of course, but we make sure that there are two with the basic knowledge.”

“We split the help desk with a first line and a second line, where the second line guy is also the server specialist, and anoth­er person is able to cover the second line, and so on.”

Extra training is a pre-requisite for this kind of redundancy to be achieved, but while that will require additional invest­ment it is likely to reduce costs in the long run, says Mr Vanneste.

“Training is so important, and creating the right mindsets of the guys going to the ships,” he told us.

“They’re experts in combinations of communications, SQL, and all of that stuff. If you don’ t train these people you need to send two people onboard, one for SQL and one for communications. If you remove that it creates your cost savings.”

“The key element is to have all of the people working together. We have a func­tional mix within the team, there’ s a guy sitting next to the PMS team who is an expert in servers and hardware. It has improved our efforts to keep everything running just by having those guys togeth­er and improving communication.”

The support network has also been bol­stered by the introduction of a ‘Follow The Sun’ system, where help is available from different regional offices 24 hours a day.

“Under the Follow The Sun concept, we start in Singapore where they do an eight hour shift, they hand over to Antwerp, and then we hand over to Houston, before the cycle starts again,” said Mr Vanneste.

“This has been excellent for support services, and this is what our vessels deserve. It also brings the travel costs down, if you have to send an IT guy to a vessel in Asia somewhere it costs money. And it’s faster.”

Six Sigma

Another project the company has begun work on is implementing Six Sigma methodology, an initiative originally developed by the Motorola company in 1981 with the goal of minimising variabil­ity in business processes.

“Six Sigma is a methodology that aims to reduce variation and eliminate waste – we are combining those two elements in a lean Six Sigma project, where the goal is reducing both at the same time,” said Mr Vanneste.

“That may sound like a business project rather than an IT project, and it is, but IT is very involved in the data gathering and exact measurement. There’ s lots of data and IT is definitely needed for the project.”

“We do the visualisation of that data – a graph or a picture says more than a thou­sand words. We also provide analytical tools for data drilling, and check on trends, like, for example, on server per­formance and service performance, to keep track of things ourselves.”

With all of these projects the ultimate goal was to demonstrate how the ICT function within Exmar could work as a value driver for the business, with a solid return on investment.

“‘ICT in control’ is an internal IT project where we implemented ticketing systems, problem management, change manage­ment, all to get better control of the whole ICT department,” said Mr Vanneste. “That way efficiency can be made possible from within the department itself.”

“But, at the end of the day, the main reorientation we did was to make the IT a business enabler instead of a cost centre. We are working with the business and talking about IT and business together.”

“We can help the business by selecting good applications and tools, and not have everyone using Excel for everything. Better usage of the IT systems will make the working of the IT department more efficient – this is key.”

Planned Maintenance System

One good example of how the Exmar team has approached this ‘IT as business enabler’ concept has been the evolution of its Planned Maintenance System (PMS) over the last 15 years, as Ivan Renette, PMS project manager, explains.

“We started introducing planned main­tenance with our own in-house built sys­tem in 1995, a system which was running in Sybase and programmed in PowerBuilder that we implemented sim­ply because we wanted to replace the Excel sheets onboard,” he said.

“We started by implementing it in the office and then moving on to, at that time, 56 vessels. After it was implemented, man­agement began to realise that the system was not as it should have been – it was not class approved, it had a lot of problems with security, no user log-in, and so on.”

“We had no clue which equipment was common throughout the fleet, and this was one of the main reasons why we need­ed to go and look for other systems. So we started to look around in the market to see which system could really help us and fit our company.”

This search led to Exmar choosing the Task Assistant system from maritime soft­ware provider Ulysses Systems to run its planned maintenance, beginning the implementation process in 2004. “Today we have our complete fleet up and running with Task Assistant planned maintenance systems, and it’s completely fully integrated with our accounting sys­tems and with our data warehouse system,” said Mr Renette. “Currently we have a complete data population team in Manila which is in direct communication with the Captains. I don’ t want to read about why a Captain needs a spare part, I just know that he needs it, so let him contact the data popu­lation team directly to get the correct information where he needs it.”

“To give you an idea of what we are talking about, our office library containing the components, now has around 50,000 generic components. We have around 600,000 spare parts, and around 50,000 store items.”

Business enabler

Mr Renette says that Exmar is now using its PMS to produce KPIs and do reporting for its technical marine department, pro­viding information that is helping to improve efficiency and reduce costs – turning the PMS into a business enabler rather than a cost centre.

One way that this is achieved is by the system keeping accurate records of the components stored and in use throughout the Exmar fleet.

Following trends in the required levels of different available and purchased com­ponents can help the technical department to understand where breakdowns in differ­ent systems and equipment may be occur­ring, a valuable piece of information when it comes to managing overall fleet uptime.

“This is something that we feed back to our newbuilding division to enable them to make the correct choice on the equip­ment that they are going to put on the new ships,” said Mr Renette.

“Another thing is that we are now able to really fine-tune and optimise the work­flow. In the purchasing department, for example, we now know which spare parts we need the most, which stores we need the most, and we can go to the manufactur­ers and force them to give us fixed pricing.”

“This reduces the cost and prevents us from spending money unnecessarily. Stock is money, we have to reduce it, mak­ing sure that there are enough spares on board but not too many. This is something that we are able to track and take out of our current system with the PMS.”

Mr Renette notes that the system improvements have even created noticeable improvements at the basic level of purchas­ing and distributing the parts and stores.

“Our vessels are around the world, seven days a week and 24 hours a day. Where are the spares, will they be in time, will they be correctly processed?” he said.

“We now have a complete status report of where the spares are. We are providing our suppliers with information telling them about where exactly we have break­downs in our real life systems.”

“Feeding back that information makes sure that they can provide us with better equipment, less breakdowns, and reduced risk of us going off-hire – and off-hire is something that you don’ t want to say out loud within the company.”

This overall drive for efficiency then feeds back into the company’s quest for Six Sigma, to make sure there is less waste in the business process.

“Based upon our complete underlying planned maintenance structure, and how we have organised the components within that system, we are now able to provide the necessary information to different departments within the company to make sure that they can work in an efficient way,” Mr Renette said.

Future improvements

With Exmar having used the economic downturn as a driving force to improve efficiency and value creation in its IT sys­tems, the company now expects to carry on and introduce further additional improvements over the coming years.

One goal which Mr Renette is currently working towards is improved standardis­ation in information management across the company’s vessels and offices.

“Internally we are now implementing Document Manager (into the Task Assistant) onboard the vessels, we have successfully updated our system and will put that on all of the vessels to provide one platform for everyone,” he said. “That will also reduce the need for train­ing as people will know the system, and will allow them to access the company pro­cedures whenever they need to, for manu­als, check lists, and measurement reports.”“In the near future we will integrate a drydock specification generator and con­tinue our reporting of KPIs for the techni­cal department and marine department, which will hopefully eventually then also be fed to external services.”

Exmar’s new found drive for efficiency since the onset of the economic crisis has reflected, to some extent, a wider issue in the maritime industry, whereby companies were performing so well that the focus on promoting efficiency was lost, notes Mr Vanneste.

“We have all been busy on different investments and there hasn’ t really been an opportunity to look back and see how much money was being spent on systems – if they worked then it was ok,” he said.

“If there were problems wé d just add more people, they could swing by and solve the problem and it would go away – but the root cause wasn’ t really solved.”

“If we orient the IT more towards being a service rather than just solving problems then we will be checking on how the IT works within the company, and the root causes. In the end that will create reliable systems. That is why we did this.”

Having seen the benefits of a lot of the hard work and large structural changes necessitated by the changing fortunes of the global economy, Mr Renette and Mr Vanneste are confident that they turned that potential adversity to their advantage.

“Is the crisis an opportunity or a disas­ter for the ICT department? I think we have seen that it has been very much an opportunity for us,” said Mr Vanneste.

“That is what we have done in 2009, and I’m sure wé ll move forward with plenty more projects in 2010.”

“The key really is reorganising the IT to be a business enabler rather than a cost. In crisis times, reliable and good quality managed vessels will get the cargo.”

 

DigitalShip Jan/ Feb 2010