Learn how to succeed with a digital maritime procurement system. This article presents the complexity of marine procurement and demonstrates why regular ERP systems are not the perfect match for shipping companies
Topics covered:
- The complexity of Marine Procurement
- Data access without internet connection
- The Benefits of Data Transparency
- Integration to Third Party Systems
- Track your data to stay competitive
The complexity of Marine Procurement
Most ERP systems are designed to manage the same element every day. This is perfect if you are a ballpen manufacturer producing thousands of pens every day. But in the maritime business days and productions are not alike.
Each shipping company has its own organizational structure, flows, processes, vessel ownership, budget, account layouts, OPEX and CAPEX management, approval matrixes and IT landscapes (just to name a few). The ERP vendors and standard procurement systems simply cannot satisfy these requirements and needs.
The need for a flexible system matching these specific workflows sometimes pushes a shipping company to create and develop their own Procurement system. But developing a procurement system takes a lot of effort and time as the maritime business is constantly changing. New regulations and requirements are introduced all the time and shipping companies often give up with their home-made systems.
We all know that marine procurement is not a straight line from A to B — something unexpected can and will happen. This could be a supplier who cannot deliver on-time, price changes, damaged goods, freight costs that are not as expected, the port of call changes, urgent situations — and we could keep going with examples.
This complexity is one of the main reasons why shipping companies need a Procurement system developed specifically for the maritime industry. It needs to support the special flows of the industry and the specific shipping company.
In addition, it allows shipping companies to control costs and analyze how to reduce costs without compromising quality and operations.
Data access without internet connection
Land based procurement is easy to plan because you can get fast and easy delivery of spare parts, materials or manpower directly to a fixed location – and you always have internet connection!
Marine procurement is much more complex because vessels move from location to location. You need to plan according to when a vessel is in port and be creative in your planning in case a vessel changes its itinerary. The only thing you know for sure is that plans can quickly change, and you have to deal with bad internet connections.
The internet connection (or lack hereof) is one of the reasons why the shipping industry is divided into two worlds.
You could probably argue that shipping companies operate with two procurement systems: one at the office and one onboard the vessel.
The office has pioneered in adapting e-procurement and shipping companies have agreed to a standard communication enabling them to exchange data such as prices, delivery terms, payment conditions and order confirmations electronically.
E-procurement is another story for the crew onboard the vessels since they often have bad internet connection. But even if the vessel is sometimes off-line, it still needs to be able to operate the Procurement system. The people onboard the vessels need be able to create request for spares, goods and services.
To overcome this challenge, your Procurement system must include offline functionality and a strong synchronization engine to ensure both office and crew have access to the same data – even without internet connection. This data exchange is a vital element to ensure easy operation even in an environment with bad internet connections.
Shipping companies need to be able to trust the data and have constant access to the system.
The Benefits of Data Transparency
Ten years ago, many shipping companies practiced decentralized data management. Each vessel built its own data based on daily tasks and procedures. This resulted in great flexibility and each individual ship could control its own data.
Today, the tendency in the business is moving towards a more centralized data management and data control. This data transparency enables fleet managers to compare data from sister vessels to improve internal workflows and KPIs.
