Efficient Ship Operations through vessel lifecycle … · •Strong focus to hull maintenance,...

Efficient Ship Operations – through vessel lifecycle management

Date : 8th April 2014

By : Srinath Medepalli

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Cost of Vessel Ownership

Initial purchase price 40%

Modernization & dry-docking

4%

Operating cost 56%

Source : WSM analysis, 2013


Vessel lifecycle cost analysis

Co

st

of

vessel o

wn

ers

hip

Develo

pm

en

t

/ E

ng

ineeri

ng

Operations Recycling

Year 0 Year 5 Year 20 Year 15 Year 10 Year 25

Positive outcome when dry docks are managed well :

• Owners pay a lower accumulated lifecycle cost

• Higher second hand value

Time

Dry dock events : strong influence on a vessel

accumulated lifecycle cost

Accumulated lifecycle cost

• It was quite normal to consider docking as an isolated event

• Superintendents tries to minimize expenses

• In order to maintain budget, some planned jobs sacrificed to accommodate Extras in shipyard.

• However if planned over 25 years, work done to preserve vessel in earlier dockings can reduce huge cost in later years.

- 02

Years

-01

Year 25 Years

Co

nstr

ucti

on

s

40%

Negative outcome due to lack of professional docking management:

• Owners pay higher accumulated lifecycle cost

• Lower second hand value 100%

Possibility to influence on lifecycle cost

Source : WSM analysis, 2013


Year 0 Year 5 Year 20 Year 15 Year 10 Year 25

New-Build

Project

Recycling 1st SS

Dry-Dock

3rd SS

Dry-Dock

2nd SS

Dry-Dock

4th SS

Dry-Dock

Inte

rmed

iate

Dry

do

ck

Inte

rmed

iate

Dry

do

ck

Inte

rmed

iate

Dry

do

ck

Inte

rmed

iate

Dry

do

ck

Inte

rmed

iate

Dry

do

ck

On-going Maintenance

• Integrated processes and systems with planned maintenance system (PMS)

• Harmonized and centralized the management of master data in PMS

• Strong focus to hull maintenance, ballast tanks and power plant

• Managing key element of maintenance budget : Dry dockings

• Having a team of dedicated in-house drydock specialist that take care of all dry docks across the fleet

• A dedicated team that will undertake the task of project management including collection of technical information,

specifications, negotiation with yards and equipment suppliers

On-going maintenance

WSM Recommendations :

Minimum : 5 Dry dockings in a lifecycle

Source : Best Practice Ship Management Study 2013

Efficient ship operations throughout vessel lifecycle


Lifecycle Management – Best Practice at WSM

Dry docking management is very important in achieving this best practice

WSM has established a dedicated in-house team of dry dock specialists who will

work with Ship Owners to:

Ensure all docking objectives are met

Plan and implement activities for Life Cycle management

– inspections, hull and coating upgrading

Improve vessel reliability

Maximize returns from Owner’s investment in dockings

Provide specialized team to manage the docking project


• Improved quotation (cost and time)

• Priority for dock space

• Better influence on outcome

• Single point of contact for shipyards management

• Develop competence through Training and experience

• Core work is Docking and use of software, prompt reports

Improved contracts

and influence with

shipyard

More resource

allocation

Project management

competence

• Supplement on VM and FM man hours spent in docking preparation

• Ships Officers spend less time / resources in docking preparations

Docking cost

reduction for clients

• Improved efficiency & accuracy

• Improved docking management & supervision

Benefits – Having a dedicated docking team

Promotes

transparency to

customers

• Improved reporting quality and timeliness

• Financial, technical and time progress updates

• Limited software access can be provided to Client.

Continuous

improvement

• Accumulative knowledge and experience to benefit our clients

• KPIs

• Valuable database


Input & output of the drydocking team

Description of ship defects

Standard

specification

Cost

analysis/

comparison

reports

Time

management

reports

Yard

performance

evaluation

comparison

report

Specification

reports

Cost

management

reports

Daily report –

technical

work done

Final docking

reports

Vessel

Manager

Owner

Database

Pre-drydock Start of Drydock

End of

Drydock

SHIPYARD 1. Quotations

2. Invoice

3. Cost & progress

reports

Docking

Software

Docking Team


Stakeholders that will influence docking objectives

Shipyard

Charterers

Operators

Owners

Bank / Creditors

Ship Staff

Combining all stakeholder

interest in docking objectives Ship Managers /

Docking Team


Standardized process with a dedicated docking team

Standard /

past

specification +

defect list +

Inspections +

LC Plan

Finalize

specification

Identify

shipyards and

request for

quotation

Analysis of

quotations

Comparison /

negotiations

Invoice

settlement –

with inputs

from daily

reports in

software.

Docking

analysis

Feedback to

standard

specification

for

improvements

Docking

report and

Close out.

Select shipyard

/Owner or WSM

contract

Docking

supervision +

reporting –

financial, time

and technical

updates

Contracts and good

contacts with shipyards Docking software

Establish

objectives

with inputs

from Client

Main improvements Life cycle

Continuous

improvement.

Open next

Specification


Good specifications

The specification is the single most important element in

the docking process

The specification :

• MUST tell the shipyard exactly what needs to be done

step by step else yards will add extras in later stage of

docking

• Is NOT a defect list, though defect lists should provide

inputs for specification

A good specification can ensure that the invoiced cost for a job is close to the quotation

Know your vessel well prior to preparing

repair specification

Shipyard will try to give attractive prices

PRIOR to order placement. AFTER vessel

entry, there is no choice but to pay extra for

non specified work.

Shipyard can only quote if they can estimate

their man-hours and material requirement

for a job


Efficiency in time and cost

– Due to better relations with shipyards

– Shipyard contracts – better discounts

– Continuously improved specifications

– Better drydocking management

0%

20%

40%

60%

80%

100%

120%

140%

Estimated docking cost Actual docking cost

Estimated 10-15% savings in

time & cost for normal docking

• Improved information flow to owners

• Docking objectives are met

• Lifecycle management


Possible and realistic KPIs to set

Minimal / reduced extra jobs in USD compared to budget

Percentage cancelled budgeted jobs in USD

Deviation in time from expected delivery date

Percentage of accurately estimated jobs


Client deliverables

Pre docking

Defect reporting

Specification reports

Cost analysis/ comparison reports

Start of docking

Daily report

Time management reports

Cost management reports

Final docking reports

Yard evaluation reports


Yard

Example reports

Comparison of prices helps in

negotiations with shipyards

Informed decisions is the most

effective way to maximize

owner’s investment in docking

Yard 1 Yard 2 Yard 3 Yard 4


Conclusion

Efficient ship operations is significantly influenced by vessel

lifecycle management

A well maintained vessel is proven to attain higher operational

performance and a higher valuation

In WSM experience, having an established in-house dedicated

dry dock team contributes positively to overall and efficiency

vessel operational performance


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Efficient Ship Operations through vessel lifecycle … · •Strong focus to hull maintenance,...

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