Maritime logistics is a capital-intensive industry. Optimally performing assets (cranes, installations, vehicles, etc.) are a prerequisite for success. Yet asset management (AM) is an underappreciated field. While its impact on the operating result is immense.
According to benchmarks*, top quartile leaders in AM achieve 40% lower costs and 6% higher asset availability than the followers. Bottom line, this gives a 5% higher return on asset value. Yet only a quarter of companies manage to achieve this performance. This blog talks about what it takes to achieve this return and what it takes to do so. We also explain the approach of Ultimate Maritime Logistics.
Asset management in the maritime logistics
Asset management in maritime logistics has its own dynamics. Time and again, it turns out that the difference is neither in more expensive assets nor in fancy ICT. But in what, then?
- Professional fulfilment of reliability engineering (RE) competence.
- Performance management (OKR; objectives, measure, review and correct).
- Thorough and effective work preparation and scheduling
- Risk and condition-based maintenance and investments.
- Reliability engineering competence involved from the start in CAPEX asset projects and supplier selection.
- Supported by a modern (integrated with the other processes) asset management system. Ultimate Maritime Logistics always works with Microsoft Dynamics 365.
The items on this top-6 list are not earth shattering. And this ranking has been stable for the last 20 years. But apparently, getting this right is still a challenge for three quarters of companies. It starts with and ends with asset reliability. At high utilisation, increase uptime. At low utilisation, risk-driven reduction of activities. This flexibility (Agile operations) requires a specific set-up of processes and IT.
The first step is laying a solid foundation. That is “know your assets”- proper knowledge of their failure behaviour. In practice, failure data is often not (sufficiently) available. As a specialist in maritime logistics, we often see a high proportion of reactive maintenance; aimed at fixing the problem. Which is 3 to 5 times more expensive than planned maintenance. Our approach is designed to get out of this "fire-fighting" mode. And to do so without reinventing the wheel. Ultimate Maritime Logistics starts with a template system setup, standard libraries and proven metrics for failure registration. And a combination of ICT-expertise and expert knowledge.
The 2nd building block is risk- and condition-driven maintenance. In practice, we often see over reliance on traditional interval-driven maintenance. For most critical assets, such as cranes, condition-driven maintenance is much more effective. Here, too, a deliberate approach is needed; a combination of ICT product knowledge (D365) and knowledge of the behaviour of the specific assets of maritime logistics.
The 3rd building block is execution excellence. Here, work preparation and scheduling are the #1 success factor and, at the same time, often take a back seat. Cooperation between operations and asset management is crucial. Yet in practice, work often runs differently than planned. When work is well prepared and planned, it is easier to estimate whether and where a rush job will fit in, but also where the pain will end up and how much extra risk you will run.
The benefits of asset management for the maritime logistics
The benefits of good asset management within maritime logistics are immense. Cashing in on those benefits requires a smart approach that matches its own dynamics. The project approach is SAFE method based but is not Asset Management discipline specific. Differentiation comes from the quality of the tools in our toolbox, and the expert knowledge of our consultants. In our view, the following approach principles are crucial for a successful growth path:
- Think big, start small. Through a baseline measurement at the front, we quickly know how much profit can be gained, where to harvest first, and what speed is realistic.
- Maximum use of proven working methods, even if they often come from outside maritime logistics. We use industry standards like GFMAM* for processes, and SRMP* for metrics. A successful collaboration combines business and ICT expertise.
- Accelerate implementation and keep it light, by using ICT building blocks that we know, will work well in maritime logistics practice. The building blocks intelligently use learnings from benchmarks like More4Core and Solomons.
Are you interested in learning what you can achieve with asset management?Then get in touch for an intake or quick scan.