7 January 2011
ShipServ Cruise industry customers are featured in an article in Passenger Ship Technology magazine, Winter 2010 edition.
Titled “Sourcing supplies online reduces admin” it outlines “how everyone (in the cruise industry) is looking to improve productivity and reduce costs these days, and one company that seems to be getting thumbs up is ShipServ.”
Here’s the article:
Everyone is looking to improve productivity and reduce costs these days, and one company that seems to be getting thumbs up is ShipServ. In July, Prestige Cruise Holdings – which operates the Oceania and Regent Seven Seas brands – became the most recent to go live on the company’s marine and offshore e-commerce trading platform, ShipServ TradeNet. Other cruise operators to make use of ShipServ include Holland America Line (HAL), Princess and Seabourn.
Prestige will use TradeNet to purchase spares and supplies for its current fleet of six ships and two newbuildings, which are to be delivered in 2011 and 2012. The company went live on the system in July this year.
John Gustafsson, Prestige’s director of technical purchasing, comments: “A tremendous time saving can be made by having all your suppliers in one place, and as a result we expect to be able to manage our new tonnage without adding to headcount. What ShipServ is doing is freeing up time.”
HAL has been a customer since 2006 but today uses TradeNet to link with 95 per cent of its suppliers and is working towards a figure of 100 per cent. Nick Ranade is deputy director of technical purchasing, with a team of five in the US and
four in The Netherlands; they are responsible for purchasing all technical spare parts for the engineroom and deck areas. As well as planning for capital projects, renovations and drydockings, the team has to work around an annual fixed cruise schedule. He explains: “We need to run a flawless operation – delaying a ship is not an option for us.”
In the past, time-consuming processes were involved, with requisitions being sent in from ships, to be followed by requests for quotations (RFQs) either being sent by mail or faxed out. Mr Ranade says, “The information was not always clear and there was a lot of going back and forth to check things. It was a highly inefficient way of doing business.”
Everything then had to be entered manually into the SpecTec Amos purchasing system. With up to 15,000 different spare parts potentially in play, it is easy to see how time-consuming this could be. According to Mr Ranade, “We could not afford to have people inputting all day long. We needed to find a better way.”
Working with ShipServ allowed HAL to trade electronically with over 800 suppliers immediately. Integration with the Amos system was a “painless process,” according to Mr Ranade, taking less than a month to set up.
Its implementation has led to each member of the purchasing team gaining between two and three hours a day due to the reduction in manual processing. Wading through paper trails to check on the status of purchasing processes is a thing of the past.
By sending and receiving RFQs electronically, HAL has found it is now easier and faster to compare quotes, as pricing is populated instantly into the purchasing system. Mr Gustafsson has had a similar experience and agrees: “The first improvement for us was that, instead of dozens of clicks to create and e-mail a purchase order to a number of suppliers, ShipServ enables us to reach several in one go.”
Having instant visibility into which suppliers have received and responded to RFQs not only helps expedite orders – the company has experienced a 13 per cent increase in products reaching vessels on time – but it has also proved invaluable when evaluating suppliers and renegotiating contracts. Mr Ranade says: “Suppliers know that they have to respond within a certain timeframe. With the data from our system we can now hold suppliers accountable to the details of an order and to providing on-time delivery.”
The suppliers themselves can benefit as well, with HAL rewarding those who respond quickly. Mr Ranade says, “We give reliable suppliers bigger orders. We expect larger rebates in return, of course, but overall it is a win-win situation for both of us.”
The efficiency of using this system has led to savings in labour costs. The recent addition of two vessels to the HAL fleet has been possible without adding more people to the purchasing team.
Having more time also means that HAL can secure better prices, as the team can ask for quotes from more suppliers. The team also makes use of ShipServ Pages, an online supplier directory, to find local suppliers or source difficult-to-find parts. Mr Ranade points out, “This helps us find suppliers on our more exotic itineraries where we do not know the local market so well. It has also helped us find ‘oddball’ spares, which on several occasions has meant we did not need to replace an entire system.”
Finding alternative sources of supply close to the ship has enabled the company to reduce the lead time for procuring parts, sometimes from months to weeks. Another advantage is that instead of chartering a plane to move parts, the team is able to ship spares to vessels, resulting in significant cost savings.
ShipServ estimates that a large cruise ship can generate up to eight times more purchase orders a year than a standard cargo ship. In other words, a single cruise ship can generate as much as a small fleet of cargo vessels.
ShipServ founder and chief executive, Paul Ostergaard, concludes that, “Cruise operators have been amongst the most active users of TradeNet since the cruise industry has some unique conditions which we can address directly. In particular, we can respond to a requirement for a fast and comprehensive service with global scope.”
(Download a PDF of the article here).
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