A market in decline put pressure on cutting costs. Six key areas were identified and changes were implemented, which ultimately led to savings of more than 100M DKK.
The freight market was turbulent, with falling freight rates and a poor outlook. Based on a successful project in a different segment of the company, the company decided to engage Mantec to conduct an analysis of ship operations, estimate improvement potential and come up with a project action plan for implementation of the improvements.
The analysis indicated significant improvement potential in all departments, both on-shore and off-shore. Based on these findings, the company decided to continue into the implementation phase.
The implementation phase of the project comprised six key areas:
Manning on board; Reduction of manning to safe manning levels on all ships.
Maintenance; Institution of a planning and productivity culture. Implementation of a new maintenance system.
Bunker optimisation; Undertaking more than 60 actions to change on-board behaviour.
Turnaround time; Creation of a KPI to measure and improve loading efficiency.
Supply Chain management; Creation of a through supply chain system to include demand planning and process automation.
Management system; Design and implementation of a new governance system across all 28 ships and land terminals. This included the creation of five KPIs to be recorded and measured on a daily basis.
The project also supported the selection and implementation of a new preventive maintenance system, a complete and new ship portal system connecting ships to shore, and a new supply chain system.
In total, successful implementation of the project led to savings of over EUR 14 million
manning reductions: EUR 1.6 million
maintenance improvements: EUR 3.2 million
improvements in supply chain management: EUR 4.6 million
bunker and turnaround optimisation: EUR 5.1 million
Another important but less quantifiable benefit of the project has been that on-board staff now feel much more a part of the overall business, because of better communications and relationships with land-based colleagues.