Operational and management problems highlighted

Oct 01 2013

During Tanker Operator's Hamburg conference last month, there was a lively debate encompassing the theme of the human element and the art of leadership and management.

The day kicked off with Martin Shaw, managing director, Marine Operations and Assurance Management (MOAMS), who explained - How to get the most out of your most valuable asset and find the right balance in your operation!!

He said that getting the balance right is the key issue and going in the right direction when building the company, ie selecting and developing the correct strategies.

Shaw stressed that establishing the company’s direction should come before the selection of management systems.

He addressed the need for good leadership in the office. If leadership is not applied correctly then you need more managers and meetings, he said.

He defined the aspects of leadership as asking yourself-

  • When did I last visit a ship?
  • When did I last talk to the people in the office?
  • When did I last see a captain or chief engineer in the office?
  • Do people really know what I want?
  • Do I set the right example when I talk to people and visit ships?
  • Do people know how to deal with conflicts?
  • Are my managers doing their job properly

Finding the correct balance between management and strategy is essential, as the various organisations will quickly pick up any drop in quality when inspecting a vessel, or a shoreside management office.

What the inspectors are looking for is two thirds good operation and one third relationships and planning.

Complex companies will become more risky and costly to run – perhaps 10% less profitable. Management will be distracted by not having a clear goal with too many people.

For example, complexity obscures a company’s direction and undermines its leadership. It doesn’t slow down it speeds up with the result that there will be an exponential growth in processes and costs adding up to a value loss.

There will also be more process traps and more inexplicable incidents.

At the same time, performance management can go in the wrong direction. Companies should create good KPIs and not bad ones, which will lead everybody in the wrong direction, Shaw said.

He also warned that management should be careful not to slice away too much of the company during the downtown, as won’t be ready for the upturn.

Shaw then summarised by making the point that today, the markets remain low and companies continue to fail.

He reiterated that over complex companies were 10% less profitable than simpler ones and were brittle, but he also warned that simple organisations lacked the sophistication to survive in the modern tanker industry.

He stressed that a company's most important asset is its leaders inspiring the collected brainpower. “Leadership, direction and management need to be balanced,” he said. “Without direction and leadership complex over management will just get you to the wrong place more quickly.”

Finally, he said that a sophisticated organisation with the right balance of direction, leadership and management will mobilise the whole workforce to deliver the things that are required to survive and take advantage of the upturn when it comes.

Independent consultant Mark Bull talked about – getting back to basics.

He addressed direct and indirect costs which involve us. “In today’s market more than at any other time, we cannot afford to have costs attributable to failures,” he said.

However, sadly the evidence would suggest the opposite and is supported by information from the insurance companies that the cost of claims continues its upward trend, he said.

“I believe to prevent these losses, or unwanted expenditure, is not radical but can be reduced to three simple areas – synthesis, objectives and simplicity,” he said.

Synthesis is important to image and the sharing of information.

Accidents still happen and we should be learning the lessons. The information is free in the form of accident reports and we should take the reports on board for seafarers to see.

He quoted the case of the Pasha Bulker grounding off Newcastle (NSW) as a case where the Australian Maritime Safety Board wrote and excellent report. “Is the information being used in training academies?” he asked.

He said that there were other objectives that we need to be aware of; and these are external (they cost us money – is it well spent?). He gave examples –

  • The ISPS Code – 1.2.1 “—take preventative measures against security incidents”
  • 1.2.5 “—to ensure confidence that adequate and proportionate maritime security measures are in place.

He thought that this was a dismal failure because the Code itself has NOT helped to improve security on board ships. “The debacle in the Indian Ocean, or West Africa, is prima facia evidence of this,” he said.

A particular problem for the tanker sector is that the vessels are over inspected – “I have heard of a new tanker undergoing 14 external inspections in the first 11 weeks of operation that is sadly wrong. Every inspection costs money – directly or indirectly,” he said.

“It is my opinion that Port State Control – in its current form – is beyond it’s sell by date – at least for tankers operating under the OCIMF SIRE, or CDI schemes and there should be a harmonisation of others,” Bull said.

A problem is that PSCOs can inspect a EU flag vessel, despite that vessel belonging to a good flag state. “PSC is not systematic, not constant,” he said.

He then gave an example of how he handled getting the message across about the Collision Regulations (COLREGS), following a spate of collisions a few years ago.

“I had to develop a hard hitting way to get the message of what the COLREGS were all about. Coupled with playbacks from VDRs of actual collisions, I would ask my audience of ships’ officers how many COLREGS there were.

“Various responses were received. My response was that I had developed my own set of COLREGS which were to be applied. There were only two – don’t hit anything and don’t let anything hit you!” he said.

As for simplicity, Bull said; “If you keep anything simple, it is more likely to work trouble free and that is equally applicable to systems as it is to equipment. KISS or KIS KIS are good slogans for this.

“On the equipment side we have the terrible ongoing situation of accidents with lifeboats. Although some can be attributed to ‘maintenance normally associated with good seamanship’, most are not,” he said.

“Without fail, all ships that I have visited in the last six years have one thing in common – all officers and crew are fearful of lifeboats. What a terrible situation that equipment intended to save life is in fact killing, or maiming seafarers,” he said.

It was his view that any ship fitted with all aft accommodation should be fitted with a free-fall lifeboat and a simple release mechanism. Side launched boats are a different story.

Finally, we have the onslaught of regulation. At times it can be overwhelming. The problem is when that regulation is poorly prepared and not fully thought out. For example, the use of the phrase ‘should be’, which any lawyer could drive a bus through.

“Using the world ‘should’ instead of ‘shall’ - tell that to a high court judge,” he warned. “We are suffering the mission creep of compliance. Emergency towing procedures are just one example of this. MLC 2006 is a classic. Or how about rest hours. No form will ever prevent fatigue. The story of fatigue is as old as the bible itself.

“I firmly believe that in times of crisis, the politicians are ready more than ever to pacify both the public and industry and so this would be an ideal time to repeal legislation that is no longer valid, or applicable. We have more than enough,” he concluded quoting the saying ‘time necessitates change, and change in itself is refreshing.’

Marine consultant Rajesh Chava’s talk was entitled - The Business Case for Investment in Resources.

He said that in small companies, the technical management takes as little risk as possible while the commercial department takes as much risk as possible.

Basically, it is the technical people that spend the money while commercial people make the money. If they are not careful, technical people can loose a lot of money.

He explained that the safety risks were well known, understood, managed every day They were physical, visible and felt.

However, operational risks usually take the form of risk of loss from inadequate, or failed internal processes, people and systems. They are difficult to perceive and quantify. “How many things did NOT go wrong? You only become aware of delays, claims and offhires, after the fact,” he said.

Compliance risks are ever increasing coupled with complicated regulations. You are under scrutiny from a multitude of bodies and some regulations have variable and unilateral interpretations.

There is an increasing severity of consequences in the form of fines/detentions, criminal investigations and arrests, for example for software, or documentation errors.

Process risks come from complex procedures, both on board and ashore, such as bottlenecks and delays in implementation, superfluous communications, which reduces the ability and agility to make decisions.

Cash flow and liquidity problems lead to delayed payments and increased costs. Supply chain delays mean missed opportunities and in claims handling procedures, the funds maybe blocked.

Cost reduction must go hand in hand with control. There is usually a need to reduce costs to survive today as the actuals are increasing, for example on annual services. In cost management there should be no ad hoc across the board reductions, but rather efficient spending and better utilisation of resources.

Every dollar should be scrutinised and a just-in-time inventory control introduced. Volumes should be used to your advantage and co-ordination and communication is essential.

When managing risks and costs an aggressive micro-management style should be adopted. Processes and procedures should be simplified by close supervision and monitoring, which will lead to effective spending, he said.

Resources do require investment to avoid losses and control costs. For example, innovative machinery is today well accepted. Investments in software systems are needed, but manage the data and don’t generate too many reports.

Enterprise solutions help in information processing, monitoring, decision making, avoiding repetition, better co-ordination, planning and just-in-time planning. The result is effective spending and the identification of risks.

As for manpower, this resource suffers growing demands and stagnated numbers. Companies should aim at personnel quality and not just quantity. Training is vital both on board and ashore. Too many demands on people will lead to a dilution of tasks. There should be a return on investment when thinking of hiring additional personnel.

Some savings can be made by spending as no ‘one size fits all’ solution is possible today. In a favourable return on investment concept, the extra costs will be offset by the savings. The shipping and IT industries have created a conventional versus a novel approach, the latter offering a range of solutions, both extensive and simple.

There are new concepts in organisational structures, new ways of doing things and not just new things to do- an out of the box thinking methodology.

Finally, Chava warned; “Do the same thing - expect the same results.”

DNV GL’s head of environment and energy efficiency maritime advisory, Bjorn Berger stressed that the Ship Ship Energy Efficiency Management Plan (SEEMP) is the dollars and ticket to trade.

Be adaptable to change and optimise the vessel to what you want it for. Fuel savings potential of between 6-15% is possible.

For example, polish the vessel’s propeller every six months, as it will start to degrade as soon as it hits the water. A monthly main and auxiliary engine test should also be carried out to ensure that the machinery is working efficiently.

He calculated that on a 46,000 dwt products tanker sailing laden at 14-15 knots, savings of up to 16% were possible, while at 15-16 knots in ballast, the savings could go up to 19%.

On a chemical tanker of up to 19,999 dwt, annual savings of $300,000 should be possible, he said.

Energy efficiency is a strategy to change the overall culture of a company.

Capt Tim Crowch, president Advanced Systems Safety Management gave a paper entitled - The Necessity for Standardisation in the Maritime Industry.

Complex situations need organisation to determine all the processes.

The organisation should take in – defining goals, organising, managing, communicating, designing, operating and maintaining. The tasks and, or environment, can lead to error, or violation producing conditions, he said, while individuals can also engender errors and violations.

“Violations will become critical down the line - determine the seafarers actions,” he warned.

Holes, or weaknesses, in defences will result in an incident. The causes of an incident usually run deep in an organisation and numerous in depth defences are needed.

A company’s Safety Management System’s information must include work place environment and organisational factors.

Safety management is a profit centre. Safety management = risk management; risk control leads to cost control, leading to efficiency, which in turn gives productivity, ending up with a profit, he explained.

Human error is usually the product of the environment, both on the vessel and shoreside organisational factors.

For example, training budget cuts could lead to a rise in exposure to risk.

Another problem besetting the shipping industry is that a chronic lack of standardisation on board ship falls on deaf ears, or come too late in the day, he thought.

In the aviation industry, standardisation is illustrated by the design of the cockpits of the Airbus A320, A330 and A380. This way, a pilot can be trained on both long haul and short haul flights and cost savings can be made in maintenance, training and spares inventories.

There were no industry norms before ECDIS came along, he said, continuing that the. IMO should have standardised the electronic chart system from the start.

“Customers should be more closely allied to their suppliers and the suppliers should listen to their customers,” he said. “We like the old things which make us comfortable – behaviour pattern- well drilled habits- we don’t adapt well- we tend to resist change.”

For example, a crew preoccupied with a new bridge won’t have time for the abnormal.

During the panel and delegate discussion, it was agreed that ergonomics was very important, as outlined by Capt Crowch.

People were serving systems not focusing on goals, not giving any functionality to the task. The question of proactively analysing VDRs came up.

Talking IT- Chava said that a single report doesn’t make sense, while Berger thought that the crew didn’t receive any feedback, once data had been analysed.

Shaw said that IT can destroy a culturemanagement systems should support and not dominate. The IT return on investment should be looked at and the question asked - what does IT do for us.

Berger said that today there is too much data. “We need quality data not great quantities,” he said.

The question is – how to balance the data? Chava said.

Navigating officers should understand that their role is to get a ship safely from A to B in any visibility, Bull said.


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