Ensuring maximum value from shipboard data

Rob Bradenham

Jeremy Wilson

September 2014
Copyright September 2014 ESRG Technology Group

Table of Contents
Executive Summary ............................................................................3
Overview of the industrial internet of things (IIoT) concept ................5
Value of the IIoT in Marine Industry ...................................................5
Maintenance ............................................................................................................................................. 5
Fuel and Energy......................................................................................................................................... 6
Environment ............................................................................................................................................. 7

What does the IIoT look like today? ...................................................8

Implementation .................................................................................8
How owners should think through investments....................................................................................... 8
Define objectives ...................................................................................................................................... 9
Identify needed Data and Information ................................................................................................... 10
Select Equipment and Determine Equipment Integration Plan ............................................................. 11
Open standards to share data across machines ..................................................................................... 12
Data Sharing and Ownership .................................................................................................................. 12
Retrofit sensors and integration ............................................................................................................. 13
Communications bandwidth ................................................................................................................... 13
Integrated or stand-alone solution ......................................................................................................... 13
Security ................................................................................................................................................... 14
Value of Data vs. Information ................................................................................................................. 15
Flexibility for Custom Applications ......................................................................................................... 15
What types of specifications should be demanded during new-build process? .................................... 15

Conclusions ...................................................................................... 17
About the authors ............................................................................ 18
About ESRG...................................................................................... 18
Endnotes ......................................................................................... 20

Copyright 2014 ESRG

Executive Summary
Using data analytics to improve shipboard
operations and maintenance has the potential to
create billions of dollars of value in the marine
industry today and even more in the future. This
industrial internet of things (IIoT) concept,
connecting machines and using automated data
analytics along with domain expertise to
optimize operations and maintenance, has
already created significant value in many
industries like power generation and commercial
aviation and is now becoming a reality for the
marine industry. While the opportunity across
industries will exceed 10 trillion dollars per year
in the next 15 years, the opportunity for asset
owners, operators and managers to reduce
costs, improve fuel efficiency, and increase
uptime and reliability is approximately 20 billion
dollars today and will exceed 50 billion dollars by
2030.
Potential annual value creation for
individual ships could be as high as $1M or
greater when considering potential fuel savings,

optimizing maintenance, decreasing downtime

and increasing utilization1.
While the potential value is clear, it is less clear
to owners, especially those unfamiliar with
technology being used in the marine space and
other industries, how to capture this value.
Vessel owners need to think carefully about
what are the right investments to make, both
during the new-build process as well as for
retrofits. Owners need to think through what
their objectives are today compared to what
they might be in the future, as well as compare
solutions and technologies that are available
today with what could come in the future.
Making the right investments today will help
increase the Return on Investment in both in
new build situations and retrofits by ensuring the
investment is minimized and the return is
maximized.
This opportunity exists across marine sectors,
ranging from super-tankers to inland tugboats

Figure 1: Value of using automated analytics to optimize operations and maintenance for large cargo vessel

Copyright 2014 ESRG

and offshore platforms. The value potential

includes fuel and maintenance savings, increases
in uptime and productivity and decreases in risk
associated with non-compliance, specifically with
regards to environmental regulations. Recent
fines for environmental regulations have
commonly been over one million USD, with some
fines in excess of ten million USD.2 Figure 1 lays
out major value creation levers for a large cargo
vessel (e.g., tanker, container, roll-on roll-off,
etc). While newer vessels will have the greatest
potential value creation due to existing sensors
and technology infrastructure, there are likely
between 20,000 and 30,000 vessels in the
current global fleet which will likely have an
attractive ROI, provided the right investment
decisions are made3. Many of these vessels
already have sufficient sensors and a robust
technology infrastructure making the required
investment minimal. The value gained from the
existing onboard data will enable substantial
improvement in how the business is operated.
While there is tremendous value at stake, it will
also take individual owners and operators time
to fully capture the value. In the mean-time,
before performance analytics are fully
incorporated into all business processes, even
partially capturing the value in the short term
will be attractive to many owners and operators.

implicitly without strategic direction from the

owner, potentially resulting in costly problems in
the future. This white paper is meant to follow
the authors previous white paper, Bringing the
industrial internet to the marine industry and
ships into the cloud4 and presents a framework
for thinking through these issues in a
comprehensive way to maximize ROI today and
in the future. The previous white paper provides
more detail on the value of the IIoT concept and
sector specific applications of the IIoT.
For many organizations, the IIoT presents an
opportunity to increase profitability, provide
greater
customer
value
and
create
differentiation in the market. Owners are
making investments in expensive, complex
equipment with the expectation that the
equipment will perform for many years or even
the life of the vessel. As the complexity of the
equipment increases, using data analytics is
necessary to determine the condition of the
equipment and ensuring proper operation and
maintenance. For those who do not proactively
begin to incorporate data analytics into their
decision making and operations, there is a risk of
becoming less competitive in an increasingly
challenging market.

This white paper walks through how a ship

owner should think about potential investments
in technology and data analytics for their new
and existing vessels. The basic principles for
technology investment for new builds and
existing assets are the same; how they are
applied is where there are often different
decisions made. Owners need to think about
several different aspects of the ship, ranging
from what data is needed to accomplish both
current and future objectives, what level of
technology infrastructure is needed onboard,
what non-engineering data is needed and of
course how is the ship connected to the cloud or
shore systems. There are many decisions that
need to be made and requirements that need to
be defined. Often, in a new build situation,
many of these decisions are being made
Copyright 2014 ESRG

Overview of the industrial

internet of things (IIoT) concept
The IIoT concept is quickly transforming into the
next industrial revolution. It is becoming more
widespread across a variety of industries from
power generation and healthcare to commercial
aviation and manufacturing.
McKinsey & Company estimated that in 2025,
the industrial internet will be creating 2.7-6.2
trillion dollars per year of value5. Cisco has
estimated that the internet of things would
connect 50 billion devices and create over 14
trillion dollars of additional profits over the next
decade in increased productivity6. General
Electric estimated the market for industrial
internet technology and services to grow to
$500B by 20207.
The basic concept is connecting machines with
each other and with people to get more out of
assets, help people be more productive, make
supply chains more efficient, enhance customer
experience and drive innovation. There are
three primary components of the industrial
internet.
General Electric, in their recent
whitepaper Industrial Internet: Pushing the
Boundaries of Minds and Machines defines
these as: Intelligent Machines, Advanced
Analytics and People at Work8.
Newer ships launched recently are equipped
with more sensors, providing performance and
condition data that can be used to operate and
maintain equipment at a higher performance
level and lower cost. This wealth of data, while it
can create value, does create a challenge as it is
overwhelming without analytical tools. For
example, a new vessel today might have over
1000 data points, which would create 2.6 billion
pieces of data over a month. When extrapolated
across a fleet of 100 assets, this equals more
than 3 trillion data points per year. Software
analytics can integrate a variety of data sources
in a variety of formats and use automated
algorithms to help users make sense of the data
Copyright 2014 ESRG

turning it into actionable information. Lastly,

new information is consumed by people as they
make more informed decisions ranging from
planning maintenance to optimizing equipment
configuration to prioritizing resources across an
enterprise.
To transform the data into
actionable information, people involved need to
have domain expertise in how the machines
operate, how the business works, and how to
analyze data. These people need access to the
data and information through multiple channels,
including web, mobile, intelligent reports, and
enterprise applications.

Value of the IIoT in Marine

Industry
The marine industry stands to reap significant
rewards from applying the IIoT concept. Like
other industries, improvements can be expected
in fuel and energy efficiency, reliability and
availability of assets, worker productivity, value
delivered to the customer, and greater supply
chain and logistics efficiency. While the high
level components of the value proposition are
common across the marine industry, magnitude
differences exist across market segments.

Maintenance
With assets operating all over the world,
including some of the most remote locations on
the planet, the potential value created by
improving how maintenance is conducted is
higher than in industries with greater asset
concentration and easier access.
Any
improvements in maintenance planning and
moving more maintenance from unscheduled to
scheduled will help to reduce all costs associated
with emergent work, which are magnified when
assets are greatly dispersed and in remote
locations.
The marine industry also operates increasingly
complex assets. It brings together equipment
manufactured by multiple OEMs and requires a
very diverse skill set to operate and maintain.
5

Figure 2: Potential value of analytics in the marine industry

This complexity, combined with the continued

pressure to reduce crew size and costs, creates a
mismatch between the skills required to
successfully operate and maintain all of the
equipment, and the skills and experience that
the onboard crew possesses.
In addition to geographic remoteness and asset
complexity, executing in-depth maintenance
often involves putting a vessel into dry-dock.
This is a significant expense, both in terms of
cost of dry-docking the vessel as well as the
downtime created. As such, there is a significant
incentive to ensure that all maintenance to be
completed during the dry-dock period is
understood and can be planned prior to the
vessel entering dry-dock in order to avoid
expensive delays and penalties by extending the
period in dry-dock. This increases the incentive
to have a thorough understanding of the
performance and health of all of the equipment
onboard on a continuous basis.
Applying the IIoT concept to marine
maintenance will enable a shift from the
Copyright 2014 ESRG

operate-break-fix paradigm to a predictoptimize-prevent paradigm. This shift will help

reduce
maintenance
costs
(preventive
maintenance instead of high-cost overhauls or
replacements)
and
reduce
operational
downtime. Condition Based Maintenance (CBM)
is often referred to in the marine industry as the
next shift in maintenance philosophies and the
IIoT concept is necessary to effectively move to
CBM. In addition to CBM, this also enables
Condition Based Operations. CBO is focused on
the optimize step in predict-optimizeprevent.
By enabling operators to use
information produced by their equipment and
analytics to make better real-time decisions,
operators can better configure and operate their
equipment to maximize reliability today and
optimize total cost of ownership, including
maintenance costs, in the future.

Fuel and Energy

The marine industry brings together the
complexity of both power generation assets
(main engines, generators) and energy
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consumption assets (shaft, compressors, air

conditioning, water production, electronics, etc).
While many industries focus their efforts on just
one piece of this, a ship has to focus on both the
energy production and consumption sides of the
equation. This complexity underscores the value
that collecting operational and condition data in
real-time and automatically analyzing can have
above what an onboard operator can do with
simple spreadsheets. For large cargo ships,
owners and operators have already acted on
many of the low hanging fruit opportunities for
energy efficiency, such as slow-steaming. The
next wave of increased efficiency will require
optimizing the entire ship as a system, instead of
just a single asset (i.e., the main engine in the
case of slow-steaming).
Like maintenance savings, fuel and energy
savings will also be shared by several
stakeholders. Owners and ship-management
companies often are not responsible for fuel cost
in the short run, but are incentivized to improve
their fuel efficiency to make their vessels more
attractive to charterers. Charterers, who are
often responsible for purchasing fuel, are often
not in the position to make long term
investments in a vessel, as their charter contract
may only be a fraction of the estimated payback
for a technology investment. Owners will need
to take some risk in making technology
investments, and then actively market the
benefits to prospective charterers to achieve
either higher effective charter rates or higher
utilization.

regulations, the commercial shipping industry is

coming under increasing scrutiny with regards to
how ballast water is exchanged or treated to
prevent the introduction of invasive species.
Lastly, the industry continues to operate with
regulations around discharges, including oily
waste. Both ballast and oily waste systems can
be monitored and automatically analyzed to
ensure compliance and transparency for a wide
variety of stakeholders.
The IIoT will enable vessel owners, managers and
operators to have visibility into the actual
performance and operation of their equipment.
Regulatory organizations will also eventually
move to electronic reporting, using actual data
from the equipment, whether it be an oily water
separator or an emissions monitoring sensor, to
be transmitted ashore and automatically verify
compliance without any human intervention.

Environment
There is significant value that can be created
from an environmental perspective in the marine
industry. The transportation sector, as a whole,
accounts for 13% of the total, global greenhouse
gas emissions.9 Marine, with many applications
consuming heavy fuel oil, is a significant driver.
This has led to various international, national
and local organizations to impose stricter
regulations on the types of fuel being consumed
and resulting emissions. In addition to emissions
Copyright 2014 ESRG

Figure 3: Global Greenhous Emissions by Source

In contrast to fuel and maintenance incentives,

almost all stakeholders are incentivized to
ensure environmental compliance. While value
to an individual ship-owner or charterer is likely
to be less than potential fuel or maintenance
savings, environmental compliance is likely to be
an initial driver for many owners, managers and
charters to make investments in the technology
onboard their vessels.

What does the IIoT look like

today?
Many owners are already moving in this
direction, whether they realize it or not. There
are many standalone and integrated IIoT
applications that are being used with greater
frequency across different sectors in the marine
industry. For example, many owners/operators
are using more operations decision support tools
to do things like optimize trim, optimize voyage
planning, plan a route optimally using weather
data. Others are using higher level applications
to help manage their fleet position and
performance or do remote troubleshooting.
Others still are using remote equipment
monitoring to better understand equipment
health and better plan maintenance. Many of
these applications are stand-alone applications,
while some are integrated with other onboard or
shore-based applications.

Implementation
There are several challenges that will need to be
overcome for the broader IIoT: increased sensors
and smarter equipment, increased bandwidth to
share data, open standards to communicate
across different types of equipment and systems,
more advanced analytics, and availability of data
scientists with the skills and domain expertise to
turn that data into actionable information.
These same high level challenges are essentially
the same as those facing the marine sector in the
adoption of the IIoT, however, the details of
what enablers will help overcome these
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challenges vary from other, traditional landbased industries.

Vessel lifecycle is an important factor in how the
IIoT is adopted in the marine space. New vessels
are often being built with significant sensors and
a strong technology infrastructure. This will
make it easier for data to be consumed by
analytics applications to convert it into
actionable information. Onboard new builds,
the required investment could be very low,
enabling fast payback times and therefore fast
adoption of the IIoT concept. Older ships,
without electronic engines and fewer sensors,
will face a different required investment than
newer ships with built in sensors to capture
value. Owners of older, existing ships must
weigh the increased investment in sensors, data
integration, networking and communications
with the potential return. While the benefits will
likely significantly overcome the required
investment for higher value assets, it will be less
clear cut for older, lower value vessels with little
existing technology infrastructure.
Based on an analysis of the approximately
100,000 ships in the global fleet today, there are
20,000 - 30,000 ships sailing the oceans that
already have some technology infrastructure in
place and would be able to easily justify the
investment required to start taking advantage of
the onboard data. This number is expected to
grow at 3,000-7,000 per year, with most newbuilds incorporating a solid technology
infrastructure during construction.

How owners should think through

investments
Instead of making individual investments in
individual solutions, owners should conduct a
more comprehensive and holistic assessment of
their needs and what the optimal solution is to
achieve those needs. First, owners should start
by clearly defining and understanding their
objectives. Once objectives are defined, then
the owner needs to identify the data and
information that is required to measure
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performance against those objectives as well as

enable operators and managers to make better
decisions to achieve the objectives. Once the
objectives and data/information needs are clear,
the equipment and integration should be
analyzed to determine the best way to obtain
the required data. Once integrated, one or more
analytics solutions will need to be used to
provide decision support to stakeholders to
make better decisions, as well as to provide
performance transparency to senior leaders to
measure against objectives.
Lastly, this
actionable
information
needs
to
be
communicated to the right people at the right
time. The right people includes both onboard
and shore based managers, requiring a
communications solution to be put in place. By
going through this process holistically, owners
can begin to reduce investment in individual
systems and retrofit efforts and maximize the
ROI on strategic investments, enabling owners to
achieve their current objectives while also
positioning well for unknown future objectives.

Define objectives
The first step in making the right technology
investments is to determine the objectives.
Ideally all stakeholders are a part of this process,
including
owners,
managers,
operators,
customers, consultants, OEMs, Classification
Societies and 3rd party technology providers. It is
helpful to lay out each organizations objectives,
which may or may not overlap with each other.
This group should define both high level
objectives, as well as how to measure
performance against them. For instance, an
owner may be very focused on managing
maintenance
expenses
and
minimizing
unplanned downtime, both of which directly
impact his bottom line. A charterer may be also
focused on avoiding unnecessary and unplanned
downtime (which could disrupt his schedule), but
is also likely focused on reducing fuel
consumption as this expense is often the
charterers responsibility. In the long term,
owners are also often concerned with fuel
efficiency, as that can impact the charter rate the

Figure 4: Process to analyze potential data and analytics investments

Copyright 2014 ESRG

owner is able to get in the market when

competing against other more or less efficient
vessels for contracts. According to Jacobus
Varassieau, Operations Manager at Nordic
Hamburg, similar vessels with better fuel
efficiency
performance
can
command
significantly higher rates in the market, with the
owner often able to capture some of value
created by better fuel efficiency.
Other
stakeholders also have their own objectives:
OEMs are often focused on the performance of
their specific equipment, while Class is focused
on ensuring the vessel remains safe and
seaworthy.
Objectives may also differ across time. While an
owner and charterer may agree to an objective
of reducing fuel consumption by 5% this year,
which requires a specific set of operating or
maintenance changes, achieving an incremental
5% the following year may require an additional
set of optimizing actions, which may require new
data and information in order for the operators
and managers to achieve. Owners of new-builds
may be focused on fuel efficiency over a 10-20+
year period, an owner of a 20 year old vessel
may be focused on a much shorter time horizon.
In addition to objectives within a specific area
changing over time, the focus areas may also
change. At some point, additional investments
in one area will yield a lower return than
investments in another area. For instance, while
in 2014 many ship-owners are focusing their
resources on fuel efficiency improvements, in
the future, investments in reducing emissions,
ballast water treatment, or improving up-time
may have a higher return on investment and
thus may drive different objectives. These
should be thought about in advance, as the right
infrastructure investments now will enable
owners, operators and managers to shift focus
without significant additional investment, as
opposed to just solving todays problem and
likely having to make additional investments to
solve new problems in the future. In addition to
shifting focus, environmental regulations are
projected to get stricter over time, necessitating

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higher levels of productivity and efficiency in the

future.

Identify needed Data and Information

Once objectives have been clearly defined, the
different stakeholders must determine what
data and information is needed to achieve those
objectives. For this purpose, raw data is the raw
output from various sensors onboard a vessel,
while information is the output of data analysis
that is useful for one or more stakeholders. Data
is often raw, potentially overwhelming and often
not actionable. Information provides insight and
can be used to make better decisions and take
action.
The first step is to determine what information is
needed. If assessing vessel performance, an
owner or operator would want to understand
the vessels hull, propeller, engine and generator
fuel performance, normalized for operations and
external conditions and ideally compared to a
relevant baseline (point in time, fleet average,
sister ships, etc). The right metrics would need
to be determined based on the vessel
application, which would then dictate what data
is required in order to calculate those metrics, as
well as normalize them.
In addition to
calculating metrics, actionable information to
support operator decision making would also be
required.
This might include operator
applications like trim optimization, speed
optimization, generator or engine configuration
optimization and weather routing information.
It might also include decision support for the
maintenance team which could identify
maintenance actions to be taken to improve fuel
efficiency.
If an objective is to maximize equipment
reliability and uptime, then another set of
information is required. In this case, the focus
would be on understanding health and condition
of equipment, both to monitor and track that
condition as well as to help the maintenance
team make better maintenance decisions. When
comparing to the fuel efficiency example above,
if maintenance and reliability is a potential
10

Figure 5: Overview of typical data and analytics system architecture in a marine application

objective, than more equipment operating data

would be helpful to create more actionable
maintenance plans.

Select Equipment and Determine

Equipment Integration Plan
Once the data and information that is required is
identified, the next step is to determine the
source of that data and how to integrate it into
the technology infrastructure onboard or
onshore. If outlining initial requirements for a
new build vessel, this is an area where moderate
initial investment can enable significant savings
and flexibility in the future.
Before determining the integration plan,
equipment must be selected.
Since the
information and data that is required is already
identified, this should be incorporated into any
equipment selection process, whether in a
Request for Proposal (RFP) or dealing with
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trusted partner suppliers. In either case, this

information and data requirement should be
written into the specification prior to final
equipment selection and financial commitment.
In addition to contracting for specific sensors,
interfaces, etc; the owner and/or shipmanagement company should verify that the
supplier can provide the equipment as per the
specification. During delivery, an owner does
not want to hold up acceptance of an entire
vessel because a single piece of equipment does
not have the proper sensors or data interface as
per the specification; often the owner already
has charter commitments that will make it
financially difficult to wait until the discrepancy
is addressed by the supplier. In light of this, it is
imperative for owners and their shipmanagement companies to be proactive in
ensuring suppliers are able to comply with the
specifications.

11

Open standards to share data across

machines
Historically, each OEM that was involved in data
integration would have their own data protocol
for transferring data or making it available to
other systems. This increased the integration
costs to bring together data from relevant
equipment, for example a main engine, fuel flow
meter, torque meter and ECDIS system. While
other industries, such as power generation, have
already moved to common open standards data
protocols, the marine industry is just starting to
move this direction. Instead of a different
proprietary data interface for each piece of
equipment, more and more marine equipment is
starting to communicate with Modbus, NMEA or
OPC standards. Additionally, there are standards
evolving such as ISO 13374-3:2012: Condition
monitoring and diagnostics of machines -- Data
processing, communication and presentation.
This is enabling new-build ships to more easily
transition to the IIoT. In addition to enabling
communications across systems, open standards
will also allow for the creation of standard
equipment hierarchies across maintenance
management programs, Classification equipment
registries, and OEM equipment databases.
These standard hierarchies will help facilitate
seamless data sharing between different
potential data consumers to maximize value
creation for vessel owners.
As part of the specifications that should be
defined by the owner and/or the owners ship
manager, open standard interfaces should be
specified. The term open standards indicates
that the data is available for consumption in a
standard format that is accepted across
companies and industries and can be digested by
other systems without custom software bridge
development work.
There are several open standards which are
becoming more common in the marine industry:
Modbus and NMEA. Modbus is a standard that
is used across many industries outside of the
marine industry and has several different
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physical delivery mechanisms, including TCP and

RTU. NMEA is a marine industry standard that is
emerging and also becoming more common.
There are also several variants of NMEA,
including NMEA 0183 and NMEA 2000. In the
future, it is hoped and expected that more
equipment suppliers will utilize an open standard
called OPC. OPC is currently the standard in
many industries outside of the marine sector.
For those who wish to learn more about these
data interfaces, see the Appendix for a list of
more detailed technical sources.

Data Sharing and Ownership

Some OEMs are adopting an open standards
approach while some are utilizing internal,
proprietary data protocols which can limit
integration options.
Asset owners should
carefully consider the trade-offs between having
open standards communications and having a
solution provided by a single vendor via
proprietary communication protocols. If other
industries, which have previously moved
towards open standards, provide a good
prediction of potential marine industry
dynamics, then OEMs who do not adopt open
standards data protocols might be penalized by
some customers, as their solutions could be
perceived as less valuable than solutions that can
more easily communicate with other systems.
In addition to specifying that a supplier provide
equipment that can communicate via open
standards, owners also need to specify that the
interface is established and activated. Many
OEMs today are already providing equipment
and systems that can communicate via open
standards, however, it takes a configuration of
the interface in order for this data to be
accessed. Once the equipment or system is
already installed, the owner is likely to incur
unnecessary additional costs in trying to get the
OEM to enable an interface. This can lead to
excessive costs for these interfaces to be
enabled which could have been prevented had
the interface been specified in advance.

12

Owners also need to understand who owns the

data that is being captured and used and what
rights are granted to different stakeholders.
There should also be a clear understanding of
how data will be used by other parties. Lastly,
the ownership of the data analytics should also
be clarified to avoid any misunderstandings or
conflicts. As far as Intellectual Property rights
and the ownership of the analytics, there needs
to be a balance that incentivizes solution
providers to continue to evolve analytics for the
marine space, while balancing the need for the
asset owner to have access to their data. A
potential path forward would be that the actual
analytics (algorithms, etc) be owned by the
provider (OEM or another third party), with the
raw data being owned by the asset owner.

Retrofit sensors and integration

While equipment is becoming more sensorized,
there is still equipment without proper sensors
being installed on ships and not integrated into
the technology infrastructure. This is definitely
changing and some early adopter ship and asset
owners are driving this forward.
It is now possible to either retrofit specific
sensors (i.e., coriolis fuel flow meters, torque
meters, water speed sensors, more robust
weather sensors, emissions monitoring sensors,
oil quality sensors, etc) or integrate diverse
systems. When evaluating retrofit options,
owners and managers should find a partner who
thoroughly
understands
the
integration
challenges, yet is not vested in particular
hardware. It is critical for owners and managers
to be able to make an objective analysis of the
different options that are available for their
specific retrofit situation as the implementation
costs can vary tremendously for similar
functionality.

Communications bandwidth
Ship-owners continue to upgrade their ship-toshore communications as the cost of satellite
communications decrease to less than $1 per
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megabyte of data.10 This cost level reduces the

impact of communications on the overall
business case, especially when combined with
other emerging requirements for ship-to-shore
communications such as video-conferencing,
email, social media, etc. With the utilization of
existing satellite networks continuing to
increase, the per-unit cost will continue to
decrease over time. As the amount of data
onboard gets larger, there are many creative
solutions for identifying the right data to be sent
ashore, instead of just streaming it all. Various
forms of compression, qualification and
validation can be used to reduce the required
data to a more manageable level that will further
reduce costs. For example, a large, modern
vessel might have 500-1000 data points available
once per second. There is no reason to have
each data point transmitted ashore every second
or even every minute. Instead, analytics can be
used to validate and qualify the data to ensure
that the right data is selected and transmitted
ashore, which can result in bandwidth needs of
approximately one megabyte per day.

Integrated or stand-alone solution

Equipment OEMs and software providers are
focusing on how to utilize available data to
create actionable information to help drive
better operational and maintenance decisions.
Many OEMs are starting to use data from their
specific piece of equipment to help ship owners
and operators operate or maintain their
equipment more effectively.
If this trend
continues with each OEM providing their own
IIoT solution, only for their equipment, owners
and operators will become overwhelmed with
information technology and not get the value
out of each system.
In addition, each
component on the ship is not operating in
isolation and needs to be analyzed as part of the
larger system. For instance, an increase in fuel
consumption could be driven by decreased
engine condition, change in fuel pressure,
increased fuel temperature, lack of maintenance,
increased marine growth on the hull, a fouled
propeller, heavier than expected sea state,
13

higher speed requirements, headwinds, or a

different fuel type among many other potential
reasons. If the engine is analyzed in isolation, it
may lead to an issue not being identified or an
incorrect diagnosis and a decision being made
without the most accurate and comprehensive
information.

control systems, stand-alone sensors, navigation

systems, and ballast and tank management
systems. This is necessary to minimize up-front
investment in sensors and data integration to
maximize the owners return. Early adopters are
starting to move this direction across different
marine sectors.

Integrated analytics that consume data from

multiple sources and help users transform that
data into actionable information are the logical
next step in the marine industry. As many
vessels already have sensors and some level of
data integration, monitoring and analytics
solutions should be flexible enough to leverage
existing onboard systems such as integrated

Security
Security is a top concern for many leaders in the
marine industry. Some owners and operators
are concerned about their data and information
(which they protect) being accessed by
unauthorized parties.
Some owners and
operators are worried that by connecting

Figure 6: Wide landscape of data analytics applications in the marine industry

Copyright 2014 ESRG

14

equipment to the external internet that their

vessels operations or equipment could be
compromised and result in an event with a
financial loss. These are real concerns, however,
many of these concerns have been addressed in
the past in other industries that also have high
value assets engaged in activities where the cost
of failure is very high. The commercial aviation
and power generation industries are two
examples of industries with assets that are worth
hundreds of millions or even billions of dollars
and with potential risks that could cause
significant human and/or financial loses. These
industries have addressed these security
concerns and mitigated the risks such that the
return they receive from connecting and
analyzing machines greatly outweighs the real
likelihood adjusted risk. This paper is not
intended to provide a thorough explanation of
accepted security standards, however, there are
extensive documents published by industry
groups that are focused on industrial automation
and controls security; several of these are listed
in the Appendix.

Value of Data vs. Information

Another challenge in the marine industry
regarding analytics is how to deal with real-time
data analytics onboard a vessel, near-real-time
analytics on-shore, and the additional ship and
shore based business systems (i.e., maintenance
planning, purchasing, supply chain, fuel
management, cargo management, etc.). The
software package needs to enable ship and
shore based users to interact with data and
create actionable information.
In addition to the analytics to transform data
into actionable information, data validation and
qualification must also occur. Data should be
qualified and validated to ensure like data points
are being compared, both over time and across
vessels.
These analytics must not only take the manual
effort out of moving from raw data to actionable
information, they must also be easy to use with
minimal training.
For example, the user
Copyright 2014 ESRG

interface should be simple and intuitive to

enable an onboard operator or a shore-based
manager to utilize the software with as little as
an hour of training.
When making an investment, owners should
ensure that their solution will have flexible,
configurable, easy to use analytics that enable
operators and managers to have access to
actionable information to make better decisions.

Flexibility for Custom Applications

In addition to common focus areas of overall
maintenance, equipment reliability, general fuel
efficiency and environmental compliance,
specific sub-sectors within the marine industry
will require custom applications to realize the
full potential of the industrial internet. Owners
should think about this and discuss with their
peers what types of custom applications they
could envision for their sector.
These
applications may or may not be available
presently, but could be introduced in the future.
The most critical thing for owners to consider
when making an investment is to think about
whether other systems could be integrated with
the investment they are making or custom
applications could be built on top. Ensuring
there is flexibility to help future-proof will
increase the likelihood that the investment is
evaluated favorably in the future.

What types of specifications should be

demanded during new-build process?
Owners of in progress new build ships are in an
ideal position to make investments that will
likely be more cost effective than waiting until
after vessel delivery. For an owner who is trying
to put in place an analytics decision support
system to help his onboard and shore based
team with operations, fuel, maintenance and
environment decisions, there is a basic set of
specifications that can be used as a starting
point. Of course, this will vary based on the
application, size and value of the asset,
complexity of the systems, etc.
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Control system: Owners should try to include an

integrated control system in their specifications.
This control system should have data from all
relevant equipment and make it available via an
open standard (usually Modbus, OPC or NMEA in
the marine industry). The interface should be
pre-enabled, with sharing of unlimited data
points possible at a minimum of 1Hz frequency.
The control system manufacturer should provide
a signal registry to the owner upon delivery
listing all data points with relevant technical
specifications to enable integration with other
systems. It should include performance data
from key equipment:

Propulsion engines
Generators
Major or critical auxiliary equipment
Fuel flow meters
Torque/power meter
Emissions monitoring
Ballast water treatment
Tank levels and draft
Oily water separator
Key bearings
Key alarms
Additional condition monitoring sensors
Any other application specific equipment

minimum, the ships network needs to have one

or more connections available in any space with
equipment that could be monitored or sensors
might be installed (engine room, control room,
cargo control room, bridge, tanks, etc). As well
as having connections where data will be
acquired, connections should also be put where
users are likely to use the analytics. Of course,
connections need to be established within
proximity to the off-ship communications as
well.
For retrofit vessels, and even in some new-build
situations, data over power line can be a viable
alternative to running network cables
throughout the ship11. This is an especially
attractive option in a retrofit situation where
running cables through watertight bulkheads can
greatly increase the cost and time in order to put
the network in place.

ECDIS: Owners should specify that the ECDIS

system also contains key information necessary
to determine and normalize ship performance
and also make that data available. Similar to the
control system, the interface should be preenabled, with sharing of unlimited data points
possible at a minimum of 1Hz frequency. It
should include and make available key data, such
as:

Location
Speed over ground
Speed through water
Wind speed/direction
Sea state or wave height
Depth

Ship network: The ships network should be

installed during the new-build process. At a
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Conclusions
The industrial internet of things (IIoT) presents a
huge opportunity to the marine industry, with
the potential to create over 20 billion dollars of
value annually.
While not all ships are
positioned to immediately capture the IIoT
benefits, that number will grow significantly, as
almost every new-build ship is having technology
built in to capture these benefits.
The benefits to marine stakeholders are
significant. Substantial fuel savings, reduction in
maintenance and repair costs, and greater
assurance of environmental compliance are the
largest drivers.
Organizations need to start thinking now about
how they are going capture benefit from the
IIoT. Owners need to be thoughtful about the
investments they make and look beyond the
immediate problem they are trying to solve. In
order to do this most effectively, owners should
follow a high level methodology:
1-Define business goals and objectives: Owners
need to think through what is important to them
and their customers, both in the present and in
the future. It is important to define metrics to
be monitored in near real time and then monitor
periodically to compare anticipated benefit to
actual benefit realized.
2-Define information and data needs: With
objectives and goals defined, owners need to
identify what information will be needed to
measure progress towards the goals, but also to
provide better information to operators and
managers to enable them to make better
decisions that are aligned with achieving the
goals. Owners need to think through how to
obtain the required information and what data
and analytics are needed.

the information that is required is identified, the

owner needs to ensure that their equipment
selection is aligned with their data needs. This is
relevant for both new-build and retrofit
situations, as well as for RFPs and working with
long-term trusted suppliers. Owners need to be
very clear about what sensors and interfaces are
required, ensure that the supplier can deliver
and work together with the supplier to ensure
success. Selecting equipment needs to be done
in the context of all the other equipment and
systems onboard the vessel (and across the
enterprise) instead of as individual components.
This will then lead to the creation of the
integration plan which should specify what data
will be integrated from what system using what
interface.
Those that do not start to embrace the value
that technology and data analytics can create
risk becoming less competitive and being left
behind. The marine industry has the opportunity
to learn from other industries which are further
down the industrial internet of things road,
such as commercial aviation and power
generation.
Learning from these industry
examples will help marine organizations mitigate
challenges and minimize costs.
While those who do not start to explore the
value that the IIoT concept can bring to their
business risk falling behind, those who do not
think through their investments also risk making
investments that do not achieve the desired ROI,
and also put them at a disadvantage. Many of
these investments are not insignificant, and so it
is important to think through objectives,
information and data needs as well as
equipment selection and integration as part of a
comprehensive plan, not just individual
investments.

3-Select equipment and define integration plan:

Once the goals and objectives are defined and

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About the authors

Rob Bradenham
Rob Bradenham is the General Manager of ESRG, a leader in marine data analytics software. ESRGs
flagship product, OstiaEdge, can help owners and operators reduce fuel consumption, optimize
maintenance costs, reduce downtime and ensure regulatory compliance. Mr. Bradenham has spent
most of his professional career in maintenance and operations of industrial equipment, both as an
Associate Partner with McKinsey & Co, the global management consultancy, where he served a widerange of large industrial organizations on their operations and maintenance, and as officer in the US
Navy, where he managed maintenance and operations on surface ships. Mr. Bradenham has a
Bachelors Degree in Finance and a Master of Business Administration from the University of Virginia.
Jeremy Wilson
Jeremy Wilson is the Chief Software Architect at ESRG for the OstiaEdge suite of applications. Mr.
Wilson has over 20 years of experience in enterprise machinery monitoring and analytics software and
technology. He also brings additional significant experience with CBO (Condition based operations) and
CBM (condition based maintenance), as well as software development, business analytics, automation
and controls and electrical engineering. Before joining ESRG, Mr. Wilson held roles in the US Navy, IDAX
and General Electric, working across the defense industry and multiple commercial sectors. Mr. Wilson
holds a Bachelors Degree in Computer Science from Old Dominion University and a Masters Certificate
in IT Project Management from George Washington University. Mr. Wilson has also been a leader in
helping to establish a standard framework for handling maintenance and operations data, both as part
of the Mimosa organization, where he has served on the Mimosa Technical Committee and on the
Mimosa Board of Directors as a contributor to groups such as SNAME (Society of Naval Architects and
Marine Engineers).

About ESRG
Since 2000, ESRG has provided leading edge data analytics and remote monitoring technology to
support commercial and defense marine engineering operations. Machinery owners and operators turn
to ESRG for expertise in data integration, automated analytics, reporting and dashboards. ESRGs
OstiaEdge, is a Platform as a Service, which combines onboard data acquisition, qualification and
analysis, shore based analytics and workflow management as well as business intelligence features.
OstiaEdge, which is based on Reliability Centered Maintenance (RCM) principles, enables users to
implement Condition-Based Maintenance (CBM) and Condition-Based Operations (CBO) to increase
reliability, achieve greater asset productivity, reduce fuel and energy consumption and decrease
operating costs.

Copyright 2014 ESRG

18

Appendix
Detailed technical resources for further information

NMEA 0183, Standard for Interfacing Marine Electronic Devices, National Marine Electronics
Association, Version 4.10, November 2008, www.nmea.org

OPC Data Access Automation Interface Standard, OLE for Process Control, Version 2.20,
February 4, 1999, www.opcfoundation.com

Increase the Security of SCADA Networks, Honeywell Process Solutions, August 2011, Houston,
TX USA

Modbus Application Protocol V1.1b3, Modbus Organization, Inc, April 2013, www.modbus.org

ISO 13374-3:2012: Condition monitoring and diagnostics of machines -- Data processing,

communication and presentation -- Part 3: Communication
http://www.iso.org/iso/catalogue_detail.htm?csnumber=37611

Mimosa: An Operations and Maintenance Information Open System Alliance: www.mimosa.org

Copyright 2014 ESRG

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Endnotes
1

ESRG analysis based on multiple data sources, including: Lloyds Register, IMO, AlphaLine, World Shipping
Organization, Clarkson Capital Markets, MAN Diesel Engine Outlook 2010, proprietary research
2
http://gcaptain.com/columbia-shipmanagement-fined/
3
Bradenham, Rob and Ken Krooner, Bringing the Industrial Internet to the Marine Industry and Ships into the
Could, ESRG, October 2013
4
Bradenham and Krooner
5
Manyika, James; Michael Chui, Jacques Bughin, Richard Dobbs, Peter Bisson, Alex Marrs, Disruptive
technologies: Advances that will transform life, business, and the global economy McKinsey Global Institute, May
2013
6
Chambers, John, Internet of Everything, Cisco, February 21, 2013
7
General Electric press release, June 18, 2013
8
Annunziata, Marco and Evans, Peter C, Industrial Internet: Pushing the Boundaries of Minds and Machines,
General Electric, November 26,2012
9
United States Environmental Protection Agency,
http://www.epa.gov/climatechange/ghgemissions/global.html#two
10
Ground Control Global Satellite Internet Solutions
11
FDN Marine www.fdn-marine.com

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