5 things you should know when Digitizing Maritime Logistics

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(Image Courtesy: Klaveness)

“Part of Klaveness Digital’s mantra is to help develop digital ecosystems. We have worked closely with many leading industrial players to generate significant savings and efficiency gains and are pleased to share some of the lessons we have learned along the way so that others’ digitization journeys can be smoother.” While software, technical solutions and digitization in general can be complicated topics, there are some simple things to consider to embark on the journey in the right way.

API’s (Application Programming Interface) and cloud computing has simplified information sharing between systems

This has enabled smaller, more agile technology companies to develop solutions that address specific problems in an enterprise, build an effective solution that addresses that problem, and implement it so that it integrates with the enterprise’s existing systems. Particularly in the maritime industry, solutions have become less focused on technical aspects (e.g. waste-heat-recovery, fuel management) and more focused on business processes such as ship-board coordination systems, voyage management or in our case, supply chain optimization.

A major challenge companies report is that they start their journey with a solution – not a problem.

And only realize this after investing significant capital in a custom-built platform. For example, a company may be inclined to extend their ERP system (designed for accounting, finance, HR and record-keeping) to help coordinate logistics. In our experience this can include too many inputs and outputs causing front-line employees to spend more time on data-entry than they did before and creation of ‘silos’ where information becomes harder to find and change than before. The end result could be supply chain wastage (equipment standby time, vessel delays, mis-coordination in inter-modal transhipments / transfers) while implementation takes place.

What if the root cause of the problem is simply lacking is visibility and the ability to collaborate internally? There is certainly a place for large ERP systems, but it is very important to analyze the organization’s challenges first and then research what system may be best for the job.

It turned out that the system (or operators) was not the problem, it was a case that they lacked visibility and the ability to collaborate internally. Having spent millions and not addressed these two simple problems, they finally resorted to 3 ‘best of breed’ systems that served their individual purposes effectively while communicating with each other via an API. There is certainly a place for large ERP systems, but it’s very important to analyse the organization’s challenges first and then research what system may be best for the job.

Finding the right partners to help an enterprise benefit from digitization goes far beyond a Google search

With new startups born every day; it is important that a technology provider has sufficient financial backing to carry out the business activities they promise. And ideally, a provider should be able to provide a proven track record of working with well-known companies or at least be able to demonstrate good industry knowledge and experience.

Once providers have been shortlisted, we would recommend carrying out a Pilot or Proof of Concept phase where clear KPI’s are set at the beginning and monitored throughout the pilot period. It may be tempting to pilot the solution in a part of the business where nothing can go wrong. But; in our experience, companies who are ‘brave’ enough to integrate the solution as far into their business as possible gain the clearest picture of whether or not the solution really solves their problems and creates value.

When piloting a software solution, you may be surprised by the ‘quick wins’ you gain.

Some ‘quick wins’ may not be related to the software itself, but to overall organizational objectives. One example is employee satisfaction and willingness to collaborate with others. Companies we have worked with have reported that an unexpected win from using CargoValue was employees reporting more freedom to collaborate with each other and less time spent on the time-consuming task of finding information among multiple spreadsheets and emails.

Employee timesaving and employee satisfaction are tough KPI’s to measure, but these should not be forgotten.

During a system implementation, consider how much time employees will need to adjust, what their feedback is on its ‘look and feel’ and how many different views they have to click through to reach the desired result. Squeezing more life out of an ageing infrastructure item may be another surprise quick win from an effective solution. For example; if a company is experiencing constant berthing delays at a port or supply base they may be tempted to spend considerable sums extending the port facilities. Focusing on getting processes right and making sure their organization is making the best possible use of the facilities available may extend the facility’s useful life and allow upgrades to be put back a few months or years.

To conclude, companies we have worked with have gained the best ‘wins’ from digitization through:

  • Establishing the challenges they face and why.
  • Researching the ‘best of breed’ software available before attempting to build a platform.
  • Ensuring that value proposition is aligned with their organizational goals.
  • Piloting the solution in a part of their business that will truly show whether the product is effective or not.
  • Focusing on optimizing efficiency out of existing hardware by leveraging effective software.

Are you in the process of digitizing your supply chain? Schedule a value assessment with our analysts in Klaveness Digital to explore the optimization potential in your supply chain.

Sea News Feature, June 12

Baibhav Mishra
Author: Baibhav Mishra

Associate Editor, Sea News