A report e-Procurement

in maritime
for C-level and
decision makers
in ship operating
companies

A roadmap to 2021 and beyond

 This report was commissioned by ShipServ and written by
Tom Holmes (the editor of the IMPA magazine).

We’re extremely grateful for the contributions of CPOs and Purchasing

Managers from the shipping industry. It is their expertise and opinion
that forms the basis of the report and that continues to drive the industry
forward.

ShipServ is the world’s leading e-Procurement platform for the marine industry. It enables
shipowners and managers to reduce OPEX via automating the procurement process, supplier
optimisation and analytics & benchmarking tools. See page 54 for more information.

2
Topics covered
1. Maritime e-Procurement: an overview

2. e-Procurement in shipping: where are we?

3. The case for enhanced digitisation

4. Agility in the supply chain

5. A roadmap to 2021: how will we be buying and how

will we get there?

6. What our experts said…

7. e-Procurement survey 2018 – results

3
 1
Maritime e-Procurement:
an overview
We live in a day and age where everything in
our personal lives is digitised. We are growing to
expect the same in our business lives. And why not?
Amazon has made buying everything you want as
simple as clicking a button on your smartphone. Is
that feasible for the B2B market? Is it necessary?
Undoubtedly the business marketplace has a different level
of attributes and requirements. Certain standards of quality
have to be met and guaranteed. It’s an enormous task. But
then won’t the convenience and simplicity be worth it? Won’t
the cost savings justify the outlay?
Consumer market platforms are built on intuition,
suggestion and availability. It’s the kind of functionality that
procurement departments would bite your hand off for.
4
Standardised products, categorised, itemised and tallied
with your inventory per vessel. Cost per unit, contract and
bulk discounts readily visible alongside accurate delivery
estimates. Automated contract spend taken care of. It’s the
gold standard – and in truth it might not be far away.
In the last 10 years we’ve seen greater technological
advances than in the previous 100. It is likely that the jobs
we have now and the ones our children are training for in the
next decade won’t exist. So why does this matter?
It matters because tech is a driver for change; it’s an
optimiser. What we expect to do in five years time will seem
archaic and perfunctory 10 years from now. Already we see
how changes to the workplace demographic are changing
cultures, practices and processes. If you are not fast you’re
last.
It’s for that reason that shipping has to sit up, take notice
and embrace advances in technology. Yes its challenges are
unique but no it’s not exempt from the tide of change –
and nor should it be. As we will see in the following pages,
there are a great many pioneers working to improve the
performance and sophistication of procurement. Running
down 400 line items with a ruler was old school in the 90s;
it should have no place in the procurement department of
2018.

The change in mindset is creeping into the industry. The

first movers have taken their initial steps. Smart buying is
If you are
replacing reactive buying, AI is being used to monitor voyage
data and optimisation of the entire supply chain is pushing
not fast
great change.
you’re last
There is still a way to go however. The industry is clearly in
transition – but crucially it is moving from talking to doing.
The integration of systems and use of data remain sticking
points; no single system has yet penetrated the shipping
market in the way Amazon has the consumer; but we are
edging closer.

5
 2
e-Procurement in Shipping:
where are we?
Shipping lags behind the times. Its adoption of
technology and strategic practice in procurement
are well off the pace of other industries. So why
does our industry drag its feet? Is it an obstinate
culture that refuses to change, or is it because
shipping has challenges that other industries don’t?
According to key figures in marine procurement, it’s
both.
Marine procurement might not be ready for enhanced
digitisation according to one person we spoke to; although
there are already possibilities to improve, the industry won’t
take advantage of them because the ‘marine business is full
of old habits and know how’ and ‘has a very sensitive sense
of pride and trust in the old ways of working.’
6
“It’s common in my organisation to hear ‘we’ve done it this
way for 30 years and it’s still fine,’” one source said. It’s a
problem they blame on the culture of marine companies
hiring former seamen to office roles and procurement
positions, positions that they are not suited to, despite their
undeniable technical knowledge. “Are marine companies
hiring procurement professionals? Or are they filling the
purchasing department with ex-seamen that quite often
have very limited knowledge of successful and objective
purchasing?”
According to many that we spoke to, the issue will resolve
itself in one of two ways. Some organisations will choose
to enact a change management programme, which, while
challenging, can be effective in shifting attitudes to software,
ways of working and to diversifying roles to meet a more
modern approach. There will be resistance, but increased
 digitisation see shifting demographics,” said one source. “Those that
and enhanced have never known any different other than Amazon in their
automation personal life will expect and demand that same type of
don’t spell interaction in the work place. Once the tech is there – and is

There will be
the end of ready and affordable – we will see a great change in the way
sound technical we work.”

a change in
knowledge
or experience Our source added that the evolution will be driven not solely
by people nor by technology but by improvements in on-
the type of
– they’re an
adjunct to it, and board connectivity and communication. “The two key factors
in this evolution are accessibility and cost; once those are in
individual
that needs to be
made abundantly place then we will see the technology improve rapidly. It will
be a slow process that depends on how the tech develops.”
that comes
clear.

The other resolution The issue of connectivity is what our source believes holds
into the relies on the tide shipping back, rather than an inherent lack of desire to
change alone. Maritime isn’t, he says, necessarily behind
of culture outside
industry the industry and other industries either.
the changing
“The connectivity just hasn’t been able to support better
demographics entering
technology, so that’s just a case of infrastructure. In the past,
the workforce.
you couldn’t guarantee internet access around the world.
“There will be a change What is helping now is reliable email around the world, so at
in the type of individual least connectivity and communication is improving. But over
that comes into the the last 20 years, the tech hasn’t been good enough. What’s
industry; already we going to drive this evolution is better communication.”

7
 Pain points
Two pain points define the current state of
e-Procurement in shipping: culture and technology.
Those familiar with shipping won’t be surprised to
hear that a lot of resistance to change comes from
people within the industry. It affects everything
from innovation and process, to investment and
growth. It’s a scourge on the profession.
“In principle there’s a limited appetite for sharing knowledge
and experience,” says Peter Schellenberger from OSERV, “and
that’s holding shipping back. That’s one of the main issues.
We’re now pushing initiatives that we’ve worked hard on and
are sharing them with competitors.
“During these times the market leaders should work
together, make some ground and achieve standardisations.
It’s not happened yet; a lot of advantages can be gained from
this. A lack of leadership defines the current situation.”
Internal resistance is just as prevalent too. One source
said that digitisation was not high on the organisation’s
list despite a ‘clear and obvious’ need for change. Clearly if
8
progress is to be made a change in mindset is necessary.
“Changing mind-sets is huge,” says Andrew Oxley of SIEM
Ship Management. “How do we convince people that the
system can help them to if they don’t allow it to? Digitisation
is fantastic if you can get everyone on board with it, and get
from it what you actually need.”
Part of the solution could be to eradicate – or at least
minimise – the slew of technological problems that pervade.
The single biggest issue is a lack of integration between
buyer and supplier systems, which in itself adds to the
administrative load.
Further issues such as unverified, inaccurate and siloed data,
poor or non-existent analytic tools and poor connectivity
with vessels are very common; and perhaps explains why
64% of respondents told our survey they were unhappy with
their e-Procurement system.
So where do we go from here? It is up to individual
companies to fix legacy problems; poorly implemented
systems can be optimised and those rarely updated by their
provider can be replaced by newer ones – or at the very
least optimised. There has to be a change in attitude from
organisations as to the value of improving digitisation; our
 survey showed that perceived high
cost is the main reason stopping
purchasers upgrading to an
e-Procurement system, while time to
implement is the next.

That indicates that as an industry

though, we need take a collective
Digitisation stance.

is fantastic if “The industry has to adapt and shift

very quickly,” one procurement manager

you can get told us. “How does that happen?

We will have to achieve some kind

everyone on of standardisation. There are many

versions of doing things in this industry

board with it and everybody thinks they’re very smart,

but we haven’t achieved anything yet
compared to other industries, so some
kind of association-guided standards would
tremendously help the development.”

9
 The lie of the land
Use of e-Procurement systems in the industry is a
mixed bag. More than 50% of the experts we spoke
to still used their systems mainly for transactional
purposes, though all were aware of the need to
evolve. Best practice therefore is patchy, though
that’s not to say it isn’t innovative, especially given
that respondents were working with systems of
varying degrees of sophistication and functionality.
At the upper end of the functionality scale, very clear
progress is being made. Peter Schellenberger of OSM, for
example, reports that his organisation is using one of the
most advanced systems in the industry. “At the moment we
are a first mover,” he says. “We’ve also completed close to 80
supplier contracts of our most important spend categories
and the supplier reaction was very positive. That enables us
to operate the platform and maintain our benchmarking and
professional contract management.”
Although organisations like OSM are in the minority at
the moment, there are reasons for those further down the
sophistication scale to be positive. In a survey ShipServ
10
carried out, 70% of those who used an
e-Procurement system said they made greater
than 20% time savings as a result; others reported
the transparency, simplicity of a single system
and ability to track their historical data as major
benefits of their current system. Others were
successfully extracting data, albeit in a piece meal
fashion, to report on anything from mapped spend
to supplier consolidation.
There is a clear desire to improve too. Teck Siang
Sim of Berge Bulk said that his organisation was
‘constantly striving for better planning,’ while
Andrew Oxley said that his company was planning
to introduce mobile invoice approval. It speaks of
a wider desire to evolve the whole landscape.
“The digital functionality is expected to be there,”
says ShipServ’s Liam Herbert. “As a discipline
in maritime, we need to better enable strategic
purchasing: category managers using the data
to categorise the products, to look historically at
what they have been doing and make predictions
for the future; there’s not just procurement data
out there either – there’s data that can be used
for planning and automating procurement, 6 to 12
 months in advance.”

“There’s a clear technological advantage to this,” agrees Peter

Schellenberger. “We have to combine the knowledge streams
and that will accelerate the implementation.”

At this stage it would tempting to go gung-ho into the latest

tech, adding reams of functionality - but there’s a sound
argument to be made for not reinventing the wheel. The

procurement thinking in the industry is, if you’re not a first mover, then
making incremental improvements on what you have is the

departments best use of your time and resource.

are burdened
In an industry where procurement departments are burdened
by administrative tasks, there’s little to be gained from having

by administrative
too much functionality and data, says Andrew Oxley. “It’s
very easy to drown in data. Right now we’re saturated. It

tasks
has to be closely aligned with strategy, simple and easy to
use because nobody has the time to be sat around reading
spread sheets; you want to be focusing on things that add
proper value and save cost over time.

“That might be through aligning your procedures with what

the system can do. It might be that you end up streamlining
the process more as you learn to use the current platform.”

11
 Clearly the industry is in transition, but it is important
to remember the technology is too. One of our experts
implemented a platform some years ago that connected the
organisation’s suppliers to its ships. That system has adapted
and evolved over time with technology, which is significant.

“We have been developing the system over a number of

years. It’s in line with developments in communications;
you reach a point where you cannot go further, you
wait for the comms to develop and in a better way,
and you begin again. It’s an on-going process; it’s not
something that is static and it couldn’t ever be that
way.

“The system itself should be adjusted to the way

the company operates. You can have a good
system but if it doesn’t suit the organisation
then it will be very difficult to use it or
maximise its use.”

12
you want to be focusing
on things that add
proper value and save
costs over time

13
 3

The case for

enhanced
digitisation On a scale where
perfection is a
10, currently the
The shipping industry is starting to adapt to
digitisation. Companies are evolving their approach
and data is driving all of us. Every company that has
a future in the industry will have digitisation on the
marine industry is
agenda; it’s shaping current and future strategies
and nobody of a significant size is preparing
at a two.
otherwise.

So, where are we?

On a scale where perfection is a 10, currently the marine

industry is at a two.

14
Archaic systems that don’t integrate and
cannot talk to one another prevail; they’re
labour intensive and make admin assistants
of intelligent and capable procurement
executives.
The industry is largely fragmented too;
suppliers and buyers use different systems.
The lack of success thus far is not for
want of investment. Consensus among
purchasing professionals is that we are five
to 10 years from moving the two closer to
a 10.
So, what does the future look like?
Increased functionality is key. Having full
spend transparency, automation, and real-
time inventories across the fleet are among
the most common requests purchasers
have. Being able to align purchasing power
with real tangible data is essential too, while
being able to see not only what is being
bought but also the value of what you have
on board the vessel is critical. The systems
themselves will be simpler. Procurement
departments don’t want to drown in data
and meaningless metrics – as with everything digital in our
personal lives, e-Procurement systems will be intuitive,
simple to use and easy to understand.
Finally, our old friend data: the engine underneath the
bonnet of enhanced digitisation. It is going to drive the
evolution of your department and transform the way you
work, provided you use it well.
Extracting meaningful data that is legible and easily found
are among the most common criteria our pool of experts
demanded of their systems – few have this right now. Some
complained that current systems were more concerned
with fancy functionality than with the quality of reporting
or measurements. Almost all said that data was hard to
extract, and many said they had more data than they could
reasonably use.
To that end, the volume of data you use should not be
too much; you should be specific about what you want to
measure, align it with your strategy and stay focused on core
metrics. Such an approach moves procurement into a fact-
based operation. You are no longer ‘buying half blind’ as one
expert told us. Rather you are using measurement tools and
real-time data to build an accurate picture of where you are
and where you plan to go.
15
 The need for
greater
transparency
Cost savings, efficiencies and
If you don’t know your
current position, how
time saving will be the most
can you act? And if you
take action, how do you
tangible wins, while being
know how effective it is
if you can’t measure the
able to use data to map
outcomes? The need for
fact-based purchasing is
processes, purchases and
pushing the development of
e-Procurement systems.
vessel-trading patterns will
The next generation will
provide clarity on what’s
have sharper measuring tools
that have the ability to align
been bought and inform
with procurement strategy,
offering greater transparency
quicker, smarter decisions.
of spend and improved supply
chain analysis.

16
 “We will have better spend
analytics, spend visibility,” says
Zois Dagkaris of Euronav. “This is
for value creation; these are things
that in other industries are common
but in shipping we are starting to
embrace.”
The enhanced clarity will lead to
benefits further down the supply chain
too. Analysing consumption and trading
patterns allows for better forecasting,
which in turn leads to volume discount
and increased lead times with happier,
more productive suppliers.
Current best practice in the industry
supports this trend. Peter Sundell of D/S
Norden says the company is using its
e-Procurement system in conjunction with
ShipServ to generate reports from clear and
accurate data; this gives them fresh insight
and enhanced performance. It’s given them
the possibility to see things they couldn’t
before as well.
“We are able to see the locations we are delivering to and
buying in,” says Peter. “There are big opportunities to find
better ways of buying with that information. For instance, we
buy a lot of spares from our suppliers in Denmark.
“All of a sudden we can see the delivery in ports for those
parts and use that data to negotiate agreements with
suppliers in those ports, which means a better deal and
savings – and time savings. It’s a big benefit because we are
saving time, money and creating efficiencies.”
Another buyer reports similar benefits, adding that the
enhanced information is allowing their company to act
quicker and develop strategy faster.
“The quicker you act the better results you get; the more
information you get and the better picture you obtain of
what is happening,” they said. “This gives you a better
understanding of the position you have and from that
you make better decisions. What we have developed is
something that allows maximum transparency between
office, ship and suppliers. It really helps and gives us an idea
of what we’re doing each day.”
17
 Innovation through
automation is essential to
increasing procurement’s value
and its strategic importance

18
 Automation:
cultivating
efficiency
Innovation through automation
is essential to increasing
procurement’s value and its
strategic importance. This
primarily comes through reducing
the manpower required to perform
essential tasks, and freeing said
manpower to get on with valuable
strategic work. So, what does this look
like?
a. Eliminating
transaction-related admin
The manual, email-based transaction flow between
procurement departments and their suppliers is one of the
biggest uses of manpower in the maritime supply chain
today.
The chaotic exchange of PDFs, excel spreadsheets, and
the printing, re-typing, and subsequent re-uploading
of documents is a source of glaring inefficiency. When
considered in the context of your entire fleet - every RFQ,
every order and every quote for every vessel – the scale of
the problem spirals, and the associated cost explodes.
So, what’s the solution? Increasingly, procurement
departments in the shipping supply chain are automating
transactions through their e-Procurement platforms. A
solution like ShipServ, for example, allows purchasing
departments to connect with suppliers using a single system,
meaning that RFQs and orders are sent from and received by
that system. The decrease in administrative tasks reduces the
procurement cycle time by half and increases productivity by
30%.
19
 Process automation, and the transaction efficiency
that results from it, is at the core of ShipServ’s
solution

200 ship operating companies are connected to

ShipServ’s e-Procurement platform and do their
procurement via ShipServ

It’s the biggest such platform in maritime

A single connection to ShipServ is all that is required

BEFORE: manual, unstructured, email based

procurement transaction flows

AFTER: transactions go directly from, and back into,

your existing procurement system. No PDFs, excels,
printing out or re-typing.

20
b. Automate c. Supplier consolidation
contracted spend means fewer risks and better
According to Teekay’s Allan Muir, if you have contracts in
savings
place, then very little spend under that contract requires
Too many suppliers and vendors put your organisation at risk.
human intervention. It should all be automated as far as he is
More suppliers mean more contracts, which means more
concerned.
time required to manage them - which is a drain on resource.
“We have contracts in place,” says Allan. “So, whether it’s
“Our platforms are connected to both contract prices and
with a chandler or a spares supplier, or whether it’s a request
to catalogues,” says Peter Schellenberger. “So that makes
for a widget – if it’s contracted the only decision that we
the processing easy and transparent information can be
make on that item is if it’s in budget – if the budget’s there
shared simply with suppliers. So in terms of transparency and
and it meets the maintenance cycle it should be automated.
corporate governance we jump all these hurdles.”
“There shouldn’t be any hands on that transaction. That
Additionally, automation helps to identify spend associated
would release manpower to focus on the serious part of the
with preferred suppliers and spend associated with suppliers
business – who we are transacting with, consolidation of
who are not on your preferred list. This in turn helps you
vendors and category management, for example.”
move certain suppliers into managed spend and allows you
to leverage volume discounts with suppliers in the managed
spend category.

To that end, automation can also help to facilitate integrated

supplier score carding through real-time performance data,
helping further with contract negotiations.

21
 4

Agility in the
supply chain
Automation can also add value and create efficiency further
down the supply chain. For example, Andrew Oxley (SIEM
The changing role
Ship Management), works with a forwarder that uses of the purchaser
e-Procurement from ShipServ. The forwarder picks up
SIEM’s POs from ShipServ and receives an introduction to
the supplier from SIEM; from there it establishes the date of The advances in technology beg an
readiness and collection. obvious question: what happens to the
role of the purchaser?
“That saves us a big job,” Andrew says. “Eventually, the
forwarder will fully integrate with us to receive our data Will they be automated or completely
directly because they understand we don’t have the time to obsolete in 5 years’ time as one survey
chase 40 suppliers. respondent told us? Opinion is divided.

“In the future, the forwarder can take the onus from us to In our survey, 68% of marine
consolidate shipments from single or multiple suppliers – procurement professionals believe the
that comes with more complete communication. The systems profession is set for major change in
and the data are a conduit to that.” the next five years, while 34% think

22
 it will totally
change beyond
recognition, with

Will they be automated or one commenting

‘the purchasing

completely obsolete in 5 officer’s job will be

history in 5 years’.

years’ time Liam Herbert is a little

more pragmatic.

“You won’t need the

team to do all the grunt
work,” he says. “You will
have automation, data
and algorithms doing that.”

Zois Dagkaris agrees.

The execs will concentrate “The execs will concentrate

more on category
more on category management, analysis,
development and strategy,”
management, analysis, he says. ‘It will be more fun
for them. The new generation
development and strategy won’t want to perform
monotonous tasks. We’ll be

23
 using machinery more and more with a view to liberating the
people to maximise their potential.”
Viva la revolution:
Naturally this will take a shift in mindset and an adaptation
what are the software
in skillsets over time. Esa Huotari of ESL Shipping said that developers saying?
‘training, training, training’ would be the way to change
mindsets, an opinion corroborated by several of the experts
The revolution in maritime e-Procurement
we interviewed, whose team were already training to be
systems is in its infancy, though the
category managers. The business case is strong.
technology that’s pushing it isn’t. Evidence
from other, more advanced industries
“A lot of purchases needn’t go through the RFQ process,”
indicates that the ideals sought from
Liam adds. “A fully integrated supplier will know stock levels
enhanced digitisation are not only real,
and lead times and the ships won’t have to worry about it –
but within reach.
the order will be waiting for them. In order for that to happen
there needs to be refined data and for a change in attitudes
The three areas identified by the
from the procurement departments. If you’re looking at this
software developers we spoke to are
from a strategic point of view and not a reactionary point of
well known, but their applications
view, it makes perfect sense.”
in marine e-Procurement are
less obvious. Cloud computing,
One buyer we spoke to, however, does not foresee a
blockchain and data will be
dramatic change. Purchasing they believe will be broadly the
familiar to all of you. In the not
same, only far quicker. “What will change is how the tech will
too distant future, they will
assist us. Instead of taking five days or three days, perhaps
revolutionise the way you
it will take 12 hours, or even quicker. The bottom line of
work, and the way you use
procurement is always going to be cost. We are now just
your e-Procurement system.
finding ways to change that by adding value, saving time and
working on innovation. Tech allows us to do that.”

24
Cloud systems is essentially gone. They also enable safe, secure
and automated two-way communications with your suppliers
throughout the procurement cycle.
Cloud-based e-Procurement
systems aren’t particularly
new, though they are Blockchain
increasingly becoming
the norm. e-Procurement
Blockchain has many benefits for procurement, and for
vendors are shifting away
the e-Procurement systems of the future. The software
from complex ERP-based
developers we spoke to agreed that it would become
systems to simple cloud-
embedded into systems that are being developed now and as
based systems that allow for
such will form a critical part of the e-Procurement system’s
app-driven interfaces and
evolution.
centralised analytics that
make automation easier and So why is that? By its very nature, blockchain circumvents the
more cost-effective. single biggest problem buyers and suppliers have: siloed data.
The current model is broadly thus: a buyer has information
Cloud-based systems
and sends an RFQ through a portal; this portal connects with
also allow purchasing
a supplier, collects the feedback from the supplier and passes
departments to share data
it back to the buyer. So you have enormous redundancy.
directly with their supply
chain because it’s stored in a Blockchain gets rid of that by distributing data to known
single, centralised location. members within an agreed network. Each item of data is
This means that the age-old shared and stored with the members of that network who
problem of sharing data with can accept its authenticity. It is much more efficient because
suppliers who use differing

25
 it uses a central, shared, secure record for storing data, as
opposed to non-blockchain systems that use multiple siloed
databases that are difficult to share, inefficient, limited
in functionality, and susceptible to unauthorized data
tampering.
“The biggest bug in the procurement cycle is that information
is stored in three places,” said Dimitris Theodossiou of
DANAOS. “Each party wants their own information. The
model in the future will look like this: the buyer will have his
own information and system, the supplier will have his own
system and information, and they will exchange information
in such a way that everyone will work in their own system.
“Blockchain will bring a new revolution into the industry. This
functionality will be built into systems. It will start to be more
widespread in shipping in the near future.”
Data
The range of applications for data in maritime procurement
are numerous and varied. They include identifying qualified
vendors and prospects, to forecasting spend, mitigating risk
26
and maintaining an accurate assessment of suppliers – all
aspects of the business that are tangible and quantifiable.
But, in an industry that lacks so much standardisation, it’s
hard to quantify how much of an impact structured and
standardised product data will have on the maritime supply
chain. When considered in terms of single spend categories
alone – stores for example - data is potentially the key that
unlocks the door to a whole universe of untapped savings,
efficiency and value.
“There is no standardised taxonomy of products in the
shipping industry,” says Liam Herbert. “The way that one
buyer describes a set of products may be different from
another. So a lot of the tools and techniques we are using
– AI, machine learning for example – are used to take a
product, analyse it and say ‘I know that’s a pump, I can put
that in your pump spend.’ – that’s the focus of that area of
development.”
The role of organisations like ShipServ and the wider
technology community is therefore to build procurement
systems that solve these problems simultaneously. Data is
at the base of that because, though the tech is evolving, the
meta-data that underpins won’t change.
“We’re making progress on data
categorisation and in two to
three years we expect to have
all the stores and consumables
mapped,” Liam adds.

“Data will change the way we

do e-Procurement. It’s the
area people are focusing
on the most and once that
is refined it will change
Data is potentially the
the whole supply chain.
It is the biggest thing
key that unlocks the
that will change the
industry.”
door to a whole universe
of untapped savings,
efficiency and value.

27
 Data, analytics and
benchmarking: two new
reports from ShipServ

28
Once a ship operator
connects to the platform,
they can benefit from
ShipServ’s data tools

Developing advanced data and analytics tools for

decision makers in ship operating companies is a key
priority for ShipServ and in 2018 two new reports will
be launched.

It’s a direct response to ship operators’ issues with the

structure and complexity of procurement transaction
data. We are working closely with customers to develop
the new tools.

29
 New: Spend
Analytics Report
It has been developed for senior
purchasers. It will clean and
categorise the transactions and then
present the data in a series of online
reports.

Buyers can see accurate spend

splits by category and sub-category,
by supplier, by vessel/port, and
key metrics like % of spend with
contracted suppliers.

The first spend category will be

available in late 2018.

For more information, and more

screenshots, please go to
www.shipserv.com.

Above:
This is a screenshot of the main dashboard of the new Spend
Analytics Report, showing category spend summary.

30
Price Tracking
See price trends over time

31
 New: Spend
Analytics Report
Here are some more screenshots of ShipServ’s new Spend Analytics Report.

Category Breakdown
Drill down further into each
individual category

32
 Spend Detail
See your spend by sub-category
by port and vessel

Supplier Spend
See what type of categories
and brands you are purchasing
from each supplier

33
 New: Supplier
Performance
Report
It gives 24 procurement
KPIs on every supplier that
a buyer trades with on
ShipServ, enabling them to
improve performance.

Amongst the KPIs included

are transaction totals, quote
and win rates, response
times, price and time
sensitivity analysis, most
commonly bought items and
spend history, and analysis
by vessel and by purchaser.

Unique benchmarks are

included and the whole
report can be printed.

34
ShipServ’s Supplier Performance Report. This and the previous page shows two screenshots from the new report.
There are 24 KPIs in the online report which are displayed graphically on different tabs. This shows the KPIs for a single
supplier that this buyer is trading with. This report is available for each and every supplier they trade with.

35
 5

A roadmap to 2021:
how will we be buying and
how will we get there?
We’re on the cusp of evolution. e-Procurement to pick up the slack in the system, do the heavy lifting and
systems are evolving quickly and they’re changing free time and manpower to build efficiency. That’s just good
the way maritime procurement is done. Much of business practice.

what we have discussed thus far is yet to reach So what we are seeing with the evolution of e-Procurement
fruition, and as such it’s steeped in idealism – but systems is the optimisation of maritime procurement. We are
there’s pragmatism to it as well. working towards an ideal scenario using pragmatic steps. As
we’ve seen, the first movers are on their way already.

There’s a lot of slack in the maritime purchasing system So what will this ideal scenario look like? By 2021, maritime
at present. And while optimisation is somewhat of a dirty procurement will be far less transactional and far more
business buzz word, it’s highly applicable in this instance strategic; automation will be standard practice, freeing
– because it’s both ideal and pragmatic to allow machines valuable time and manpower to work on gaining competitive

36
advantage through efficiency and optimisation.

The focus will be on smarter operations and smart

procurement with smart logistics, and better planning
and negotiations for important items. As communications
improve between systems and vessels, there will be less error
and more savings. Most of the
The systems in operation will be far more useful and much experts we spoke
to expected
more powerful too. Gaining real and tangible data from them
will no longer be a problem because data will be sat in a

to have fewer
single system as opposed to in silos across many. Information
specific to your strategy and operation will be readily

operators in 2021,
available and readable.

Increased functionality will be prevalent and will be a major

driver for generating value and innovation. Real time data will full spend visibility
allow for critical and accurate assessment across the supply
chain and create greater awareness of opportunities to and to have
mitigate risk, optimise, consolidate and make savings.

The strategic approach will be reaching a new level of quality.

developed vendors
Most of the experts we spoke to expected to have fewer
operators in 2021, full spend visibility and to have developed
into partners
vendors into partners that acted more as an extension of the
company than as suppliers.

37
 So how do we reach the Promised Land?
Don’t reinvent the wheel….
To make strides toward enhanced digitisation, you don’t have
to reinvent the wheel; for one, by the time you have, it will
have been reinvented several times over anyway. Instead,
using what you have, and refining your approach to make it
work optimally are a sound course of action.
“We need to ask what is useful and what’s not useful,” says
Andrew Oxley. “What is going to give me value? Using what
you already have is an efficient way forward - you don’t have
to reinvent the wheel just yet.
“As shipping takes a more digitised approach we find
ourselves in a transition period where we’re establishing
what is useful and what isn’t. That isn’t to say that
improvement can’t and won’t be made, just that some
aspects of digitisation are being used simply because that’s
the trend.”
….but do embrace technological change
Moving to a fully digital, fully electronic e-procurement
model which is a critical enabler for automation and
38
enhanced data is essential and is here to stay.
Those that have moved to such a platform
experience clear, ongoing, benefits.
What is less clear is whether an Amazon-style
emarketplace, at scale, will develop in maritime.
At present the industry is divided over whether
an emarketplace will work for shipping, whether
it’s viable or even necessary. Opinions range from
‘it will definitely happen’ to ‘highly unlikely.’ Our
survey found that few procurement execs thought
such a platform would make an impact. Our advice
is not to rule it out.
“A true market place allows you to see price,
stock, delivery times and to tally your inventories
per vessel with such a platform,” said ShipServ’s
Liam Herbert. “There’s an indication that certain
sections of the industry are willing to move in that
direction. It’s a few years away because we need
to figure out how to bridge issues over risk and
trust, among other things.”
Kerstin Hoffmann of CPO Containerschiffreederei,
agrees. “An Amazon-style platform is ok, but who
guarantees the quality? It’s a risk to buy items
 from suppliers you don’t know or aren’t sure
you can trust. There’s no possibility to audit and
analyse these suppliers – if we can’t do that then
it’s too much of a risk.”

Moving to a Blockchain, meanwhile, isn’t going away. The

fully digital, software developers we spoke to all agreed that

it had a role in the e-Procurement systems of the

fully electronic future. It allows companies to store and share huge

amounts of information with large numbers of people

e-procurement in the most efficient and secure way currently possible.

It also circumvents the problem of systems that won’t

model which is a
integrate. Make it a key consideration when you’re
reviewing your e-Procurement system.

critical enabler for On a slightly more mundane level, it is improvements

in on-board connectivity and communication that will
automation and drive a lot the evolution. “The connectivity just hasn’t
been able to support better technology,” one buyer told
enhanced data is us. “What is helping now is reliable email around the
world, so at least connectivity and communication is
essential and is improving. But over the last 20 years, the tech hasn’t been
good enough. What’s going to drive this evolution is better
here to stay. communication.”

39
 Prepare now for
cultural change
The mindset across the industry has to change. Enhanced
digitisation is improving other industries and other sectors;
shipping can no longer resist and nor should it try. Enact a
change management programme, which, while challenging,
can be effective in shifting attitudes to software, ways of
working and to diversifying roles to meet a more modern
approach. There will be resistance, but increased digitisation
and enhanced automation don’t spell the end of the sound
technical knowledge or experience your people have.
Be mindful of today’s cultural waves…
Why? Because they’re a reasonable prediction of what
tomorrow’s people will take for granted – and tomorrow’s
people are who will be running your organisation.
Online buying is becoming the new norm for businesses
outside the shipping industry - because nearly half of B2B
buyers are millennials, according to a Google report. They’re
young, tech-savvy and sophisticated, and unlike their older
peers they demand the same simple and intuitive platforms
40
in work that they’re used to in their consumer lives.
In the near future, cumbersome and laborious systems
won’t be tolerated and will be made obsolete by slick and
agile platforms that replicate the consumer experience.
Understanding this is critical not only to the growth of
e-Procurement systems in general, but to the direction your
organisation takes in the coming years.
Train your staff
now for future roles
The role of the procurement exec will change in most
organisations. The organisation of 2021 and beyond will
use them as category managers, or highly specialised execs
handling critical aspects of the operation.
“We’re currently training our team with the expectation that
they will be category managers by 2021,” said Zois Dagkaris.
“It’s the concept of the future. We’re consolidating. If we
get more and more people together that rely on that set of
specialists who can be in any location, it gives us tremendous
flexibility.”
Teck Siang Sim concurs. “At this moment each member of the
team manages a category; we’re easing them into a new role
to come when we are able to get more automation and get
better partners in our supply chain.

“By 2021 they will have the experience to adapt to the new
role. It’s necessary for the industry to head in that direction.”

No organisation
Collaborate is an island after
As the industry moves towards enhanced digitisation, the
need to collaborate is essential. No organisation is an island
all, especially not in
after all, especially not in the supply chain. Building and
adapting for the future is a joint venture. How that looks for
the supply chain.
each organisation will vary; but it’s important to consider that
to go far you have to go together.
To go far you have
Peter Sundell reports that D/S Norden has started to work
closer with its suppliers in that respect. “Lots of suppliers
to go together.
are asking us what they can do for us – what they should
list on their site, what sort of reports they should offer. We
say that we don’t need great functionality, just the ability to
access their data so that we can co-ordinate our strategy in
accordance with them.”

41
 Providing information from the ship all the way back to the “We are a first mover here,” says
manufacturers is the e-Procurement of the future. “Ideally Peter Schellenberger. “We are
you would like to know how much, where and when – that’s subscribing to the first OEM
the ideal option,” one of our experts said. “But ideally our platform that ShipServ has created,
systems would support that so that we can predict how using ShipServ functionality
much we have to spend and that allows suppliers to plan where the suppliers don’t have
accordingly. It’s about planning and using data.” to perform another integration
for another purchasing alliance.
Such initiatives bring the market place close to the end users,
which is essential for moving from transactional to strategic “We are procuring here for
models. “The suppliers can receive feedback from end users our own vessels and also
on board,” says Teck Siang Sim, “and end users on board for so called consortium
can have a better idea of what the suppliers and market members on volume
are offering and then the shore organisation can be the aggregators and also
moderator. created services around
outsourced procurement
“From there we can distance ourselves from a processing services where clients
model to a strategic model that takes in frame agreements trust us with complete
and volume purchases.” outsourcing of
procurement activities
On a technological level, we are beginning to see how
and we buy in their
collaboration is advancing platforms. ShipServ and OSM
name, but they can
have worked together to develop one of the most advanced
use our contracts
systems in the industry.
via the digital
platforms.”

42
From there we can distance
ourselves from a processing
model to a strategic model
that takes in frame agreements
and volume purchases.

43
 6

What our
experts said…
We’re extremely grateful for the contributions
of CPOs and Purchasing Managers from the
shipping industry. It is their expertise and
opinion that forms the basis of the eBook and I think there will
that continues to drive the industry forward.
definitely be an
Here are some sound bites from the
interviews. emarketplace –
it’s going to come
Allan Muir
Teekay Shipping

44
“Cost will always be a motivating
factor, but where you can
generate innovation and value, it
is a major driver for moving over
to new systems.”
Andrew Oxley
SIEM Ship Management
“Looking at the functionality
is important. It’s all very well
knowing the price over nut bolt
and screw, but is that where
you’re going to save your money?
Probably not. Generating
meaningless KPIs is not what you
want to do.”
Andrew Oxley
SIEM Ship Management
“The bottom line is that ecommerce is collaboration.
It is about the buyer and supplier working together to
achieve the best performance to deliver goods to the
vessel. The collaboration is not also just between buyer
and supplier. Collaboration is the main force driving
ecommerce.”
Dimitris Theodossiou
DANAOS
“The true market place does away with RFQs. With the
data and the processing we have, on the transaction
side we can start looking at offering better alternatives
to the products you’ve selected, based on quality,
different suppliers and price for example.”
Liam Herbert
ShipServ
45
 “In principle there’s a limited appetite for sharing
knowledge and experience – that’s holding shipping
back. During these times the market leaders should
work together, make some ground and achieve
standardisations. It’s not happened yet; a lot of
advantages can be gained from this. A lack of
leadership defines the current situation.”
Peter Schellenberger
OSM
“We get a lot of data in. I’d like to look at the total costs
of ownership for a piece of equipment; it’s not just the
parts we’ve put into the equipment, it’s the break down
of the man hours that have been assigned to maintain
it. We have this data hidden in the various systems but
it’s difficult to piece it together with what we have.”
Teck Siang Sim
Berge Bulk
46
“Part of this move to greater strategic thinking is
increasing the number of purchases under contract
and leveraging spend. With the age of internet, I can
conceivably see that if you have contracts in place that
ships could create their own orders and do their own
stores procurement. That pushes a bit of responsibility
onto the vessel and the crew to manage a budget.
“The landscape will change when there is better
connectivity on board ships. It will essentially move
from being a centralised procurement function to one
that is decentralised and on the ships.”
Liam Herbert
ShipServ
“The new generation won’t want to perform
monotonous tasks; some guys aren’t doing
procurement, they’re doing admin. We’ll be using
machinery more and more with a view to liberating the
people to maximise their potential.”
Zois Dagkaris
Euronav
 “We are starting to take the best practice from other
industries and adapt to the shipping industry’s reality
– which is the most demanding reality in modern
business. It’s a remote business you have to adjust
according to the vessel, which sometimes you won’t
know.”

There’s a lot of Zois Dagkaris

Euronav

reactive buying
in the shipping “The industry is very old fashioned. One major problem

supply chain,
is that the ships are running worldwide and the ships
aren’t well connected to the internet. When widespread

and not so much connectivity is on board the vessels there will be huge
development. We have to invest so much on board, but

smart buying it will transform the way we are able to work by shifting
responsibility for some spend to the vessel and crew.”
Kerstin Hoffmann
Peter Schellenberger
CPO Containerschiffreederei
OSM

47
 “We have probably realised as an industry that improve the efficiency with help from IoT and other
we are lagging far behind other industries in the technologies.
implementation of eProcurement and that we can Peter Sundell
get a lot better. There is still a gap in the market that D/S Norden

someone eventually will fill and in this game volume is

king.
“There seem to be a problem in standardisation in
general. Still a number of difficult and potentially
expensive decisions needs to be taken in parts of
our industry – not sure when this will happen but
eventually it will happen, otherwise companies will
lose some of their competitive edge. Those who crack
the nut in this area will play a leading role in the
transformation of our industry, I believe.”
Jesper Bak Weller
Marcas International
I think shipping is ready for change. Once the vessels
are all connected with a capacity similar to what we
have on land we will get tremendous possibilities to
“We need to be there in two years. That’s the challenge
for us. We need to have a really good digitised
procurement platform, with the full procurement cycle
covered – all the best tech. It has to be future proof.
That’s our target.”
Allan Muir
Teekay Shipping
“I think a system that integrates the inventory across
vessels and tallies with purchases is possible; hopefully
we will have that usable solution soon.”
Teck Siang Sim
Berge Bulk

48
“Ideally we would like automation – for RFQs,
greater capability to source services and detailed
reporting functions. I don’t need much – we have
to focus more on the quality we buy and that is
best served using our own data; being able to At this moment each
analyse our data and forecast and analytics.”
Kerstin Hoffmann member of the team
manages a category;
CPO Containerschiffreederei

“There’s still a long way to go. If you look

we’re easing them into
20 years ago the shipping industry was a new role to come
mainly using telex machines and radio
for comms. There’s more and more when we are able to
coverage around the world thanks to the
investments of comms companies, but get more automation
and get better partners
it’s taken some time to reach this point.
Now we are starting to benefit from
the opportunities with data exchange
between vessel and land in a way
in our supply chain.
that was sci-fi just a few years ago.”
Teck Siang Sim
Peter Sundell Berge Bulk
D/S Norden

49
 7

e-Procurement
survey 2018
– results
ShipServ carried out a survey of maritime
professionals. Thanks to all those who responded.

Here are the summary results.

50
There are a lot of purchasers
not that happy with their
procurement system...

18%

36%

46%

51
 Perceived high cost is the Even though it’s
main reason stopping transformed
purchasers upgrading to an other industries,
e-Procurement system (35%) if there was a
marine version
of Amazon,
most marine
purchasers
70% of those with an (71%) don’t
e-Procurement system think it
make greater than 20% time would have
savings as a result a sizeable
impact

52
Get ready for change:
68% of marine procurement
professions believe the
profession is set for major
change in the next 5 years

There is a great difference in views about the

nature of change:

“Category buying will be essential”

“Purchasing officers will be pure administrators”

“My job will be done by a robot within 5 years”

“More educated, more trained, more strategic,

more modern”

53
 How ShipServ helps
shipowners and managers

If you manage
10 ships you $300,000
to $1.2 million
can save
between
...every year with ShipServ

54
We have worked with
hundreds of purchasing
departments, who have
stated that cycle times are
too slow, procurement costs
are too high, processes are
plagued by errors and a lack
of reliable data means that
it’s hard to make strategic
decisions.

These problems all stem from

what we call communications
chaos – the problems caused
by inefficient, email-based
transaction flows.

Take all those emails, excels,

PDFs, printing out and re-typing.
And then scale that up to the real
world….all your orders for all your
fleet and you can see the waste,
and its cost.

55
 ShipServ
How it works
ShipServ is the market leader in operating
an automated procurement solution, and is
now in partnership with over 200 leading
shipowners and managers.

5
1
You make a
single simple
connection to
ShipServ

56
2 4
Importantly, you All your transactions are
make this connection sent from, and received
from your own directly into, your current
procurement system procurement system

3 5
We guarantee Emails, excels, PDFs and
connections to all re-typing become a thing
your suppliers of the past

57
 ShipServ
The benefits

1
Cut your
purchasing
cycle times
in half

58
2 4
Typical savings from Finally, because all the
increased productivity data is now digital, the
is 30%, so you can run quality is far better. This
more vessels with enables us to produce
the same number of online insight, analytics
people and benchmarking reports
for our customers

3
The time liberated
can be spent on We’d love to speak with you about how we can
strategic purchasing reduce waste and save OPEX.

59
 200 10,000
ShipServ Shipowners Vessels
today / managers trading

$3.5bn 7m 70,000
Total trade Total Connected
per year transactions suppliers
per year
www.ShipServ.com
Visit our website for more information:
www.shipserv.com

Or email:
data@shipserv.com