Best Practice in Ships Technical Management

Quality and safety of operations, management and treatment of crew and transparency of costs spend are increasing. during 2013 GL and Fraunhofer CML experts conducted a study involving about 100 ship managing companies across the globe to find out what they are doing to improve their operations and what they consider as “best practice” in the industry.

2014.03.12 - Best Practice in Ships Technical Management

Ship managers are under increasing pressure. Over capacities in the market are driving charter rates down. Ship owners face higher costs to finance vessels. Ship operators fight for cargo and drive down their main cost block, which is fuel. Ship managers sit in the middle and have to look after more and more for the same management fees to gain owners management contracts. At the same time lie the requirements on availability of the vessels.

One aspect of effective and efficient Ship Management is to ensure the technical availability of a vessel and the balance of maintenance costs with costs of defects or even off hires. Chief engineers onboard and the superintendents in the office combine their skills and practical experience to achieve that. Technical Management is, after crewing, considered the 2nd most challenging area for the mid-term future. Increasing regulatory and compliance pressures are seen as adding to the complexity of this equation.

The GL and Fraunhofer CML revealed that:

  • 77% of all respondents checked either cost or competitive pressures (commercial questions were the number one issue of the industry)
  • 72% who checked compliance or regulatory pressures.
  • 5% of respondents judged that in their organization “everything works fine”
  • 50% of all respondents focus their improvement programs on processes, a distant second being investment strategy (19%)
  • 65% of all respondents are looking at best practice measures in the Technical Management field and 77% of those respondents state organizational measures, 85% process measures and 69% IT measures

Life Cycle management (LCM) as a fairly new thinking in Technical Management but receives quite some attention. Three fourths of the respondents are familiar with the concept, with over half of it regarding it as important for the future. 82% of these focus on machinery and 74% on hull structures.

Lower total cost is the number one advantage, followed by higher information availability and very interesting evidence of environmental performance.

The in-depth interviews conducted during the study outlined a number of similarities across ship managers in the approach of technical management:

  • Many ship managers move away from a pure vertical organization to a more process-based one. The best known example are the so-called fleet teams, where technical, purchasing, crewing and/or accounts experts sit together in one organizational unit to serve a certain number of vessels.
  • The days of paper-based workflows in ship management are gone. The increasing complexity of commercial, regulatory and other challenges seem to leave ship managers with no option but to build their processes around IT solutions that “cut” across units and departments and provide consistent and “real time” information to the many stakeholders. Most ship managers see IT investments increase even in these commercially challenging times.
  • Planned maintenance systems are clearly a central part of the increasingly integrated process and IT landscape, but the innovators in the ship management community look beyond. Life cycle management, hull integrity and condition based maintenance concepts, expecting further cost efficiencies and uptime improvements.
  • With cost pressures rising and forcing comprehensive approaches, this life cycle management increasingly focuses on hull and structures as well, beyond the traditional machinery based approaches. The challenge here is to stay close to the vessel itself, despite the administration around it. As one respondent put it: “We all have focused too much on ‘papers’ and we are asking every day for more and more paperwork, forgetting the ‘hardware’, i.e. ship’s structure.”

In summary key elements of best practice in Technical Management:

  • Organize along processes
  • Build processes around a state-of-the-art planned maintenance system
  • Harmonize and centralize the management of master data
  • Manage a key element of your maintenance budget: dry dockings
  • Pay attention to hull maintenance
  • Embrace condition based maintenance

The full report developed by GL and Fraunhofer CML can be found by clicking HERE and contains many interesting findings for other aspects of Ship Management such as Crew, Safety & Quality, Finance and Procurement.

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