Smart shipping would bring about a much greater integration of ship operations with the internet and big data. The Smart Shipping model focuses on the transport performance of the company/fleet as a whole, rather than a collection of individual ships, resulting in wide reaching improvements in transport productivity; safety; personnel development; and logistics. The need is to spend an appropriate amount of money on how assets are going to be used.
Four problems with the existing business are identified; firstly that the technology used was old and economies of scale had been taken to an extreme; second there was a real problem in attracting crew; third a change in the market so that two-thirds of the cargo was controlled by non-OECD countries; and fourth the industry has very weak customer relationships.
1. From Gambling to Management
Shipping needs to move from gambling to management The problem with the bulk shipping business over the last 20 -30 years is its been a gambling business not a management business,”“It's a management solution, you semi-automate ship operations, you semi-automate navigation and you implement door-to-door logistics.". The focus here is on optimizing the overall management of the business by treating the transport performance of ships as a single production unit, like a BMW car plant. The result is QA systems that really work, not a set of manuals nobody consults.
The challenge for shipping is: Is shipping smart enough to embark on becoming a Wirearchy? “a dynamic two-way flow of power and authority, based on knowledge, trust, credibility and a focus on results, enabled by interconnected people and technology”.
The 'smart' in smart shipping may signal a move to a knowledge economy and intellectual capital.
2. Customer relations and innovation
“We need to put these things together and squeeze some more value out the transport chain and put a smile on the customer’s face. The customer should not be the person you are beating to death over the negotiating table.”
Eric von Hippel and his team at MIT have made the case for user-centred innovation, where ideas from users and customers are sought and used. 'Lead' users may not just be a source of innovation, they may be the innovators themselves
As regards the necessity for such disruption, do remember, if you don't disrupt yourself, someone else will do it for you.
3. Jobs, Job To Be Done (JTBD), careers, incentives
The need is for a business model which allows employees in a shipping company to be effective as a single team, with better and more rewarding career opportunities for young people and greater integration between ship and shore. Tomorrow's shipping is most of all about people.Better use of people as a resource. Manage ship and shore personnel into a more productive team with better career opportunities. Break down ship-shore barrier, create a team spirit, opportunities for a career. Build a whole new culture. Run the fleet as a team. Experienced engineers ashore, junior ones at sea getting responsibility early, with support. We’ve got 1.7 people onshore, 20 people on the ship, the 20 people on the ship hate the people onshore and the 1.7 onshore think the guys on the ship are a load of idiots. Is that the way to run a business? Integrate the systems and get it to run better.
Automate & de-skill ship operations & navigation: "It's not about the crew, it's about automation of navigation"
There will need to be a careful watch on incentives that block progress:“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” Upton Sinclair
4. Getting there - managing change
We should not assume it will be easy.
The need for change is clear: "The Internet is nothing less than an extinction-level event for the traditional firm as we have known it for the past 100 years. The Internet makes it possible to create totally new forms of economic entities." Esko Kilpi Bandwidth limitations have sheltered shipping from the full force of the internet. That protection is ending.
As regards the process of organisational change, it is important to remember Virginia Satir's remark "No one likes to be should upon" For a few resources on change, see here.
5. The 'Human Error' Reduction FallacyUnsurprisingly, Martin Stopford has fallen for the 'human error' reduction fallacy being pushed by the 'toys for boys' autonomous ship/car/toaster crowd. However he recognises that driverless ships are a very difficult topic which should only be considered when the industry has much more experience and depth.
"Human error is the symptom of system failure, not the cause" Dan Maurinho "In their efforts to compensate for the unreliability of human performance, the designers of automated control systems have unwittingly created opportunities for new error types that can be even more serious than those they were seeking to avoid." James Reason
The 'human error' reduction fallacy is an unhealthy way to approach the design of automatic or autonomous systems.It is also likely to miss any big business opportunities that emerge. Human-Centred Automation based on Billings would be the basis of safe and effective operation.
6. Big data and safety
Centralise analysis. Moving to shipping and maritime economics, this could turn out to be a tremendously exciting era for Maritime analysts.
"In the real world, a big factor in patient health are social factors like mental health, social isolation, and transportation issues. Since this data is not typically collected, it is largely ignored by Big Data analytics. By collecting this data in a structured way, it can combine with the clinical data to create a truly complete care plan for the patient."
Centralised analysis may be right for economics, but for management, big data needs to be used to support smart people who can appreciate the context. "Appreciate the situation, don't situate the appreciation".
7. Automation to support a new business model.
Smart phone style apps and standard interfaces. De-skilling. Don't just automate navigation, but onboard operations, systems.
De-skilling by automation has usually been counter-productive. Changing the organisation to give more responsibility to junior people by supporting them with a network of other people plus automation - that is do-able.
Automation and IT need to be seen as oxygen, not lubricating oil. Chris Boorman has a nice piece on the difference between human-centred automation and human replacement automation. "Automation enables enterprises to automate those core processes not to make cuts, but to free up resource to work on new disruptive projects. Faced with an increasingly complex world of technology - cloud, mobile, big data, internet of things - as well as growing consumer expectations, every business needs to turn to automation or perish....Every industry is going through a period of change as new technologies and new entrants look to disrupt the status-quo. Automation is a key enabler for helping enterprises to disrupt their own industries and drive that change. Acquiring new customers, retaining customers, driving business analytics, consolidating enterprises following mergers or driving agility and speed are all critical business imperatives. Automation delivers the efficiency and enables the new way of thinking from your brightest talent to succeed."
8. Setting expectationsAs Martin Stopford has recognised, moving to smart shipping is not going to be easy. A detailed passage plan is obviously inappropriate, but some sort of route with easy stages might be welcome.
9. Early actionsSome early actions are obvious:
- Set the means of achieving scalable learning in place, including trying out some creation spaces.
- Chris Boorman again:"Automation needs to be ingrained in an organization’s DNA early on and not deployed later as a replacement measure for existing job functions. It should instead be used to allow people and resources to be more focused on driving the business forwards, rather than on just keeping the lights on." The ingraining needs to start now.
- Rob Miles has proposed levels of enlightenment (later slides in the presentation) as regards integrating safety into business. Smart shipping will need to have some enlightenment, and this will need to include the regulators.
The gloomy bits: From the CyClaDes EU project on crew-centred design, it has become apparent to me that shipping is far from ready to do crew-centred design - there is a long way to travel for all stakeholders. The 'human error' issue also goes to the heart of matters, from accident investigation through to daily operations.The smart people needed for smart shipping includes all sorts of people. e.g. engine experts who fit the wrong rings in the wrong grooves.