A silent revolution in ship management

Plagued by operational inefficiencies, inadequate cost control and flawed hierarchical

structures, modern ship management has struggled to meet the evolving needs of

the shipping industry. But thanks to the recent launch of Ulstein Marine Services,

shipowners will soon have access to a smarter and better way to manage their fleets.

Best known for shipbuilding, ship design, electrical and control systems, the Ulstein Group main strategy is sustainable growth, internationalisation and to develop into new business areas within the marine industry. A closer look at Ulstein?s ship

management concept reveals an idea as bold and innovative as the company?s vessel designs.

While Ulstein Marine Services (UMS) will provide customers with both technical operation of vessels in service and crewing, the company has expanded the scope of ship management and structured its offering in a new way. According to UMS? managing director Jens Lassen, UMS will focus on the total value of the vessel, managing cost control, revenue growth and risk. “We do not view a ship as a piece of hardware, but as a floating business unit complete with its own onboard management supported by a global network,” he says. “This approach may challenge the traditional model of ship management, but we are convinced it is the right way forward.”

Lassen, who has spent his career in the maritime industry, argues his case out from two main hypotheses. Firstly that high quality ship management with focus on safety and the environment is the most cost effective long term solution for a shipowner.

“We need to combine green and lean”. And secondly, to achieve this performance to the expectation of the customer and society at large, the ship management needs to be based on modern systematic management processes together with advanced selection and training of maritime personnel. Lassen argues that ship management at this level will positively impact a shipowner?s business and also greatly enhance his customer relationships.

Because traditional ship management tends to focus almost exclusively on crewing and technical management, most providers have a narrow focus on costs and are subject to price pressures which can impact quality. By broadening the scope of ship

management to include off hire, damages, operational efficiency and energy management, UMS will be able to create sustainable business value through a total cost focus.

Lassen also notes that today?s approach to ship management is burdened by a legacy of maritime traditions which get in the way of good management. Links between superintendents, purchasing, onboard personnel and staff on shore are impeded by

poor communications, cluttered with redundant systems and needlessly complex decision processes. But Lassen says it wasn?t always that way. “In the past, captains were empowered to make decisions and ran their vessels like a floating business,” he

says. “UMS will restore the captain?s role.”

By empowering and training the captain and his officers to act like a business team, UMS removes a layer of management, enabling onboard personnel the freedom to make better decisions, faster. This approach will also help the company recruit

experienced officers who seek more responsibility and allow UMS to benchmark and incentivize onboard personnel. “Officers and crew will be subject to performance expectations and KPIs, so it will be in their interest to make smart decisions,” They will not only have the responsibility, but also the authority for running their ship, says Lassen. “This ship-centric approach to management will give UMS highly motivated officers and crews which will improve vessel performance.”

UMS will be headquartered with mission control centre in Oslo with a crewing and operations centre in Manila, and five additional fleet support offices in Houston, Rio de Janeiro, Rotterdam, Dubai and Singapore. These offices will work with service

chain management, coordinating purchasing, accounting operations, technical support and crewing. In a sense, UMS will turn traditional ship management on its head. “We want our shore based offices support network to serve the ships, not vice versa,”

he says. “And we are building UMS from the ground up to ensure that everything we do is to improve the business performance of the ships we manage.”

UMS will be linked by ULSTEIN KEY, a software system which enables and unique fleet wide overview and control of operations for critical and selected processes. ULSTEIN KEY, which is built on a Teomaki designed-platform, will also include

risk management tools, track KPIs and enable improved performance management. Both shore-based and onboard personnel will input relevant data and access reports when appropriate. “ULSTEIN KEY allows us to monitor the performance of each

vessel instantly, “says Lassen. “If we discover a vessel is underperforming, we can take swift action.”

At present, UMS is seeking to implement a pilot project to demonstrate their business model. The project will begin as a partnership with a specific focus on a measurable business outcome. If successful, UMS will begin to offer services as early as 2010. In the meantime, the company has established a crewing centre in Manila. Known as Woolrock, the training centre ULSTEIN ACADEMY will be developed to create some of the best trained crews in the industry.

Lassen says that UMS is part of a larger initiative within Ulstein to expand services to become an integrated provider of a broad range of ship services, including design, engineering, construction and operation. “UMS will create competitive advantages for

our clients by establishing a new model performance in the marine service industry,” says Lassen. “we have a lot of work to do, but we believe our model will change how the industry views ship management.”