Optimizing financial performance

Transcription

1 MARITIME Optimizing financial performance London Captain Stephen Bligh 05 October 2016 Rev A4 Fleet Advisory 1 SAFER, SMARTER, GREENER

2 Optimizing financial performance When optimizing financial performance of the fleet management process the following should be considered: 1. Firstly Identify improvement areas Do you have room for manoeuvre. 1. Quick wins are nice but not always sustainable 2. Agree on an acceptable level of operational performance: - Availability/Reliability/Off-hire - Operational capability 3. Measure the technical performance in order to control the operational performance - Minimum acceptable asset condition? - How to monitor asset condition? 2

3 The Fleet Processes President & CEO Safety Technology Research Headquarters Headquarters Headquarters Business Business Mgmt. Maritime Statutory Green Technical Technical Maritime Planning Finance Support Safety Service Growth Support Research Safety Research Office Office Office Office Office Office Team Team Ctr. Local Delivery Headquarters 1. Organization & Leadership 6. Crewing 2. Maintenance 7. OPEX 3. Docking 8. Energy 4. Procurement 5. QHSE 9. Project Safety System Emergency Preparedness Risk Environmental protection Continuous Improvement 3 9 December 2013

4 Common pitfalls 1: Companies struggle to implement sustainable cost savings Key success factors Structured approach following the logic: Identify cost drivers Identify opportunities Adjust goals Initiate quick wins Manage change Measure effect Lack of holistic & long term perspective in cost cutting efforts hinder implementation of sustainable cost savings Focus on being cost efficient & control the cost drivers Strengthening core company capabilities, thus improving the competitive edge Do not focus only on immediate liquidity effects, but sustainable cost cutting 2013

5 Common pitfalls 2: A patchwork of systems and procedures leads to inefficiency and in transparency Key success factors Harmonized targets across the organization Lost in a patchwork of systems, processes, procedures driven by regulatory requirements, company growth and silo thinking Decision body that ensures cross-disciplinary alignment across fleet management, operations, IT/technology, training and communication Organizational structure that ensures: Process orientation Clear allocation of responsibilities Deep understanding of requirements from Class as well as other statutory requirements such as IMO regulations and Flag States 2013

6 Source: FutureShip Source: FutureShip Source: FutureShip Source: FutureShip Source: FutureShip Common pitfalls 3: Initiatives are never implemented due to a variety of reasons Key success factors Implementation tracking, covering responsibilities, milestone dates and impact (cost-benefit) Improvement areas are identified but lack implementation and acceptance in the organization Implementation plan Performance management Implementation plan Performance management Implementation plan Performance management Implementation plan Performance 2013 Implementation plan Performance Feb Mar Apr Maymanagement Jun Jul 2013 Aug Sep Oct Nov Dec Responsible Final project presentation 6 Feb 2013 Mar Apr May Jun Jul 2013 Aug Sep Oct Nov Dec Responsible Mar Apr May Jun Jul 2013 Aug Sep Oct Nov Dec Responsible XYZ Final implementation project presentation status 6 Feb 2013 (see Mar Apr May Jun Jul 2013 Aug Sep Oct Nov Dec Responsible XYZ checklist Final implementation project and report presentation previously status defined) 6 Feb 2013 Establish (see Mar Apr May Jun Jul Aug Sep Oct Nov Dec Responsible XYZ checklist and Final implementation finalize project and XYZ report presentation implementation previously status defined) 6 Feb 2013 checklist Establish (see and XYZ checklist and Final report implementation finalize project and XYZ report presentation implementation previously status defined) 6 Feb 2013 Roll checklist out Establish XYZ (see and XYZ Implementation checklist and report implementation finalize and XYZ report Checklist implementation previously status to defined) TSIs Roll (see checklist out chapter Establish XYZ (see and Implementation checklist Internal and report communication finalize and XYZ report Checklist implementation previously to defined) and TSIs personal Roll (see development, checklist out chapter Establish XYZ and Implementation Internal SEEMP and report communication roll-out finalize XYZ Checklist implementation to communication and TSIs personal elements Roll (see development, II and III) checklist out chapter XYZ and Implementation Internal SEEMP report communication roll-out Checklist to Collect communication and quarterly TSIs personal input elements Roll (see development, from TSIs II and on III) out chapter XYZ Implementation Internal SEEMP their communication roll-out respective Checklist to Collect communication and quarterly vessels through TSIs personal input elements (see development, from checklist TSIs II and on III) chapter Internal SEEMP their communication roll-out Consolidate respective Collect communication returning and quarterly vessels personal checklists through input elements development, from checklist into TSIs II and on III) SEEMP their roll-out XY Mgr. XYZ Consolidate Implementation respective Collect communication returning quarterly vessels Fleet checklists through input Report elements from checklist into TSIs II and on III) their XY Mgr. Discuss XYZ Consolidate as Implementation respective part Collect of regular returning quarterly vessels Fleet report checklists through input Report discussions: from checklist into TSIs on their XY Mgr. Fleet Discuss review XYZ Consolidate as Implementation (see respective part communication of regular returning vessels Fleet report checklists through calendar Report discussions: checklist into XY Mgr. element Fleet C Discuss review XYZ in this Consolidate as Implementation (see chapter) part communication of regular returning Fleet report checklists calendar Report discussions: into Annual XY Mgr. Discuss element Fleet as part C Discuss review XYZ in of this regular as Implementation (see chapter) part communication report discussions: of regular Fleet report calendar Report discussions: review Discuss element Fleet as Team part C Discuss review in of this Fleet regular as (see chapter) review Annual part communication report discussions: of regular report calendar discussions: review (see Annual element D) Discuss element Fleet as Team part C review in of this Fleet regular (see chapter) review communication report discussions: calendar review Discuss (see element as D) Annual Discuss part element of as regular Team part C in of report this Fleet regular chapter) review discussions: report discussions: review XY Discuss workshop Same (see element as D) Annual Discuss part of as regular Team part of report Fleet regular review discussions: report discussions: (see review XY element Discuss workshop Same (see E) meeting element as part of D) regular Team report Fleet review discussions: (see XY element Discuss workshop Same (see E) meeting element as part of D) regular report discussions: (see Same XY element Discuss workshop E) meeting as part of regular report discussions: Fleet (see Review Same XY element workshop E) No. 10 meeting Fleet (see Review element E) No. 10 meeting Fleet Review No. 10 Fleet Review No. 10 Fleet Review No. 10 Establish change management addressing the needs of the different stakeholder groups High Involvement (active involvement in the project) Win & maintain confidence (I) Keep informed (minimum effort) (III) Involve extensively (II) Address concerns/ needs & train (IV) Low Low Impact (ability to effect changes to projects planning or execution) High 2013

7 Questions (cost optimization) Fleet cost optimization questions: 1. Organization: Have you considered to centralize fleet management activities in order to obtain cost savings from economies of scale effects? - operational efficiencies - specialisation of functions (docking management, 24/7-control center for energy and maintenance management control center) - benchmarking with 3 rd party ship managers 2. Maintenance: Have you considered implementing a condition based maintenance strategy? 3. Docking management: Have you considered to implement docking management with dedicated docking managers responsible for executing of all the companies dry-dockings? 4. OPEX: do you externally benchmark your OPEX performance? 5. Energy management: Have you created and (successfully) implemented an energy management strategy? A. Have you considered to create a 24/7 operations center for monitoring energy management performance of the fleet? 7

8 Financial optimization: 2. Maintenance 2. Maintenance Cost savings potential: 5-10% Relevant questions: Is there a maintenance and spare parts strategy based on a criticality analysis (FMECA)? Ref cost and safety consequences. What kind of maintenance strategy has been chosen? Is condition based maintenance used? Are maintenance Key Performance Indicators (KPI s) in place and monitored? How is the quality of work orders in the Planned Maintenance System (PMS)? Does the company have a good overview of the condition status of their equipment and vessel status? Vessel inspections with condition reporting? Has the company had any technical incidents the past two years? Are there availability issues (off-hire statistics)? How is the companies Port State Control (PSC) performance? Deficiency ratio below 1,0? Example: PMS build up in accordance with makers recommendation in stead of criticality analysis resulting in excessive amount of work-orders and spare-parts. Company lacked condition status of hull prior to dry-docking which resulted in additional required steel replacements of 150 ton, extended yard stay of 60 days and 140% budget overrun. 8

9 Financial optimization: 3. Docking 4. Docking Cost savings potential: 10-30% Relevant questions: Does the company have a formal docking strategy and documented docking management procedures for the complete drydocking process? Drydocking manual? Is there a pre defined timeline for the docking process? Spec ready on time? How is the quality of the drydocking tender invitation? Specification and conditions etc. How much % of the docking specification is covered by fixed prices in the yard quotation? Quality of spec. How do you document and archive the result of the drydocking? How is the current docking performance? Any time or cost overruns? Does the company has KPI's for the docking process? How has the performance been the past 5 years? Is risk management used in the drydocking process? Project and safety risk. Does the company have software to support its drydocking process? Example: Company with two docking projects (tanker/3 rd renewal)with substantial cost and time overrun (3 MUSD) due to lack of risk management. Company with 15 dockings per year manages only to cover 50-60% of spec with fixed prices in yard quotation resulting in excessive docking costs. 9

10 Financial optimization: 7. OPEX 10. OPEX Cost savings potential: 2-5 % Relevant questions: Is there a formal budget process? Is it documented? How are budgets created? 5 year rolling budget? How are costs controlled and how are budgets followed up? Monthly budget meetings with superintendents? Are budget estimates updated monthly? Does the company have a clear OPEX cost structure in line with an accepted industry standard? Harmonized accounting structure? Drewry? How is the adherence to the cost structure by superintendents and crew? Are OPEX budgets benchmarked? Internal & external benchmarking? Day-rates? Are OPEX budget results analysed? Trending and investigation of anomalies. How has the OPEX performance been the past 5 years for the complete fleet? Is there (real time) IS/IT support for the OPEX/Budget status follow up? Example: OPEX budget based on unclear cost structure not in line with industry standard. Total lack of adherence to cost structure. Unable to perform internal or external benchmarking. Company with unclear budgeting process. No monthly budget follow up due to time consuming accounting process as result of lacking IT/IS support. 10

11 Financial optimization: 8. Energy 8. Energy Cost savings potential: 5-15% Relevant questions: How is energy management incorporated in the company s strategy, tactical plans, and daily work? Voyage : Does the company actively seek to optimize the planning, execution, (result) review and learning from voyages? What overall processes are in place to ensure optimum performance of the ship itself? What is done related to the main and auxiliary engines to optimize the fuel efficiency except standard maintenance as per maker? Is the company active in understanding, measuring, trending, controlling and optimizing the energy consumers on-board? What is done pre-/during-/post bunkering to ensure a fair price, desired fuel quality and limited shortlifting of both density and quantity? How do you measure the result of your efforts related to energy management? KPI's? Performance past 5 years? Fleet wide view? Example: Company implemented energy management and created the function of performance manager in order to keep focus on energy efficiency managed to reduce fuel consumption with more than 10% fleet wide. Company started program for tuning of main engines by maker. Managed average fuel reduction of 3%. Max reduction was 9% on a single vessel. Resulted in training program for engine maintenance and performance. 11

12 Thank You Captain Stephen Bligh SAFER, SMARTER, GREENER 12