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Martin L Shaw
Managing Director
Marine Operations and Assurance Management Solutions Ltd
Tanker Operations
2012
Succeed, Survive or Sink?
Tanker Operator Conference September 2012 ‐‐ Hamburg
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Outline
• Where we are today
• What are
the
choices
you
face?
– Succeed Survive or Sink
– Cost versus
Risk
– Resilient/Brittle?
– Cost Management versus Cost Cutting
• Where are
you
now?
©Marine Operations and Assurance Management Solutions Ltd 2012
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Freight Markets from 1973
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Building Booms From 1950
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Is it just the 1980’s again?
What's the Same as the 1980’s?
• Low Freight Rates
• Oversupply
• Global Recession
• Energy Costs
What's Different?
• Finance
• Technology
• Manning
• Corporate Structure
• Global Village
• New legislation
• Environment
• Complexity
• Quality, Charterers and Port
State
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Quality improvement since the 1980’sIntertanko Statistics
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0
120
240
360
480
600
0
210
420
630
840
1050
1 9 7 9
1 9 8 1
1 9 8 3
1 9 8 5
1 9 8 7
1 9 8 9
1 9 9 1
1 9 9 3
1 9 9 5
1 9 9 7
1 9 9 9
2 0 0 1
2 0 0 3
2 0 0 5
2 0 0 7
2 0 0 9
2 0 1 1
Fire/Expl
Miscellaneous
Hull & Machinery
Grounded
Coll/Contact
Oil pollution
No. of incidents ‘’000 tons pollution
Information based on reports from Lloyd's MaritimeInformation Unit and The International TankerOwners Pollution Federation
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Why the recent increase?Macro
• More ships more accidents
• Better reporting due to
TMSA
• New ships
– Teething problems
– Understanding of
new
technology
• Experience gap from lost
recruiting in the 80’s and
90’s
• Complexity
Micro
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• Multiple (conflicting?) goals
– GHG/Air quality/Ballast Water
– Piracy
– 9/11 Security
• Motivation
– Freight rates
– Cost pressures
– Finance Costs
• More regional
rules
• Consensus weakening
(GHG)
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Simplicity Clarity Confusion DistortionAnarchy
P r o c e d u r e s R e q u i r e m e n t s
a n d C o m m u n
i c a t i o n s
C o m p l i a n c e
C a p a c i t
y t o
A b s o r b
Complexity in Operations
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Box Ticking
Culture
Corner Cutting
Risk
Time
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Time
L o s s v e r s u s F i n a n c i a l S t r e n g t h
Succeed, Survive or Sink
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What are the Choices?
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Safe Profitable Operation
P R O T E C T I O
N
PERFORMANCE
After James Reason
Managing the Risks of Organisational Accidents
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Choices‐Squeezing Operations
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P R O T E C T I O
N
PERFORMANCE
After James Reason
Managing the Risks of Organisational Accidents
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Choices‐Another View
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Your Company
Legislators and
Customers
The Banks
Shareholders
Creditors
Source Scylla and Charybdis by ~EarthDefect on deviantART
To
succeed
owners
will
need
to
adapt
and
be
resilient
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Resilience
• The ability
of
an
organisation
to
succeed in
changing circumstances not just survive
• Finds
opportunities• Clarity and Agility
• Learns
• Anticipates
• Monitors
• Adapts
• People who can think not just follow rules
• Bends but
does
not
break
under
pressure
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Operating Mode
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Normal Abnormal Emergency Normal Abnormal Emergency
Resilient Brittle
Resilient organisation will adapt from
normal operation
to
abnormal
operation and recover. In emergency
will be able to adapt further to avoid
catastrophe
Brittle organisation will need all its
resources to
maintain
normal
operation leaving limited capacity to
deal with the abnormal. Rule based
mentality will be unable to cope with
novel emergencies and will fail.
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Resilient Shipping Company
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Resilient
Operation
Owner
Operations Management
Customer
RequirementsRegulators
Requirements
D o w n w a r d
R e s
i l i e n c e
U p w a r d
R e s i l i e n c e
Downward Resilience
•What the Owner Wants
oStrategy
oValues and philosophies
oGoals and Goal Conflict
•How the owner wants it to work
oCulture
oMotivation
•How the
owner
is
seen
oLeadership
oCommunication
Upward Resilience
•The Human Contribution and Motivation
oNot human error !!
•Choosing the
right
people
oSelection
oRetention
•Learning and Training
oTechnical Skills
oNon technical skills
( the human element)
oDecision making
oOn board
training/learning
Operations
Management•Learning and Knowledge
•Change Management
•Procurement and technical backup
•Budgets and targets
•Managing Complexity
•Creating simple and useable process
•Reinforcing owners goals
•Compliance
Knowledge
and Learning
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L
o s e V e t t i n g A c c e p t a b i l i t y
Time
S l a s h a n d B u r n
C o s t C u t t i n g
I m p r o v e E a r n i n
g s a n d C u s t o m
e r F o c u s
C o s t M a n a
g e m e n t
F i n a n c i a l S
t r e n g t h
I n c i d e n t s a n d
r e l i a b i l i t y p r o b l e m s
Succeed, Survive or Sink
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Cost Management
• Budgets/management accounts are symptoms not causes
– Find what the root causes of cost are.
– Beware of ‘across the board’ cuts.
• What drives
Costs
and
Lost
Value?
– Yesterdays decisions, philosophy, goals and assumptions
– How you apply imposed requirements and legislative changes
– Rigidity in
the
organisation/Decisions
at
the
boundaries
of
functions
• Understand the Consequences
– Understand the risks, costs, value, value loss
– Understand your organisation and how it works
• Implement and make sure the change is fully integrates
– Communicate more , listen to feedback, monitor
– Training and Procedures
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Conclusion
• Challenging Times
– Markets/Oversupply
– Customers and Legislators
– Complexity
• Choices
– Succeed, survive or sink
– Cost versus value
– Resilient/Brittle
– Cost management versus ‘slash and burn’
• Where are you now‐resilient of brittle?
• Not just surviving but succeeding
©Marine Operations and Assurance Management Solutions Ltd 2012