Tim C. McAloone
Professor of Product/Service-Systems
The globalized maritime service market under revolution: Future product/service-systems and business models
April 2016 Tim C. McAloone 2 DTU Mechanical Engineering, Technical University of Denmark
Disposition
• Why service in a product-oriented world? And how to
incorporate it?
• Maritime product/service-systems: a recent project in
Denmark
• From frameworks and business models to
environmental and economical business cases
• Your readiness to innovate..?
• Questions
April 2016 Tim C. McAloone 3 DTU Mechanical Engineering, Technical University of Denmark
Disposition
• Why service in a product-oriented world? And
how to incorporate it?
• Maritime product/service-systems: a recent project in
Denmark
• From frameworks and business models to
environmental and economical business cases
• Your readiness to innovate..?
• Questions
DTU Mekanisk Teknologi, Danmarks Tekniske Universitet 11/11/2015
Add Presentation Title in Footer via Insert; Header & Footer
A fundamental shift in the market demographics of modern society
11% 30%
9% 50%
Mat
eria
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atio
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org
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Products Services
[Karmarkar, 2007]
Introduction
So what about the maritime industry?
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April 2016 Tim C. McAloone 6 DTU Mechanical Engineering, Technical University of Denmark
Challenges and opportunities in the Danish maritime industry
• The maritime business is the most globalised in the world
– …now also for ship-design, -building, and -operations
• The marketplace is less loyal
– …but this gives opportunity for more and other business
• Products are commoditised
– …embedding services may be the answer … but how to do it?
• Sustainability permeates everything
– …international regulation provides an opportunity.
Product/Service-Systems (PSS)
• Product/Service-Systems (PSS) is an innovation strategy.
• At its core, is the notion of supporting the customer’ activities with products and services instead of just selling a product.
• PSS provides a number of tools for aligning the supplier’s solutions with the needs of the customer.
Viking Life Saving equipment:
From selling life rafts to selling safety and compliance.
8
Disposition
• Why service in a product-oriented world? And how to
incorporate it?
• Maritime product/service-systems: a recent
project in Denmark
• From frameworks and business models to
environmental and economical business cases
• Your readiness to innovate..?
• Questions
April 2016 Tim C. McAloone 9 DTU Mechanical Engineering, Technical University of Denmark
What we’ve been doing to address future trends? (past tense)
•PROTEUS PROduct/service-system Tools for Ensuring User-oriented Service Methods and implementation in the maritime branch Innovation Consortium Feb 2010 – December 2013
April 2016 Tim C. McAloone 10 DTU Mechanical Engineering, Technical University of Denmark
Click to edit Master title style
Presentation title PROTEUS Innovation Consortium
The PROTEUS
consortium companies
Plus research partners:
• DTU
• CBS
• IPU
April 2016 Tim C. McAloone 11 DTU Mechanical Engineering, Technical University of Denmark
The extended PROTEUS workforce Core staff Steering group Project students 2010-2013
Former staff
Rassvet.dk
April 2016 Tim C. McAloone 12 DTU Mechanical Engineering, Technical University of Denmark
Charting what services were on
offer
• Popularity and adaptation of different offerings
• 48 offerings charted
[Mougaard K. (2016) “A framework for conceptualisation PSS
solutions: On network-based development models”, PhD Thesis,
Technical University of Denmark]
April 2016 Tim C. McAloone 13 DTU Mechanical Engineering, Technical University of Denmark
Introduction Studying best practice
Pictu
re: ww
w.m
arinelo
g.com
[Mougaard K. (2016) “A framework for conceptualisation PSS
solutions: On network-based development models”, PhD Thesis,
Technical University of Denmark]
April 2016 Tim C. McAloone 14 DTU Mechanical Engineering, Technical University of Denmark
Product/service affinity mapping…
[Mougaard K. (2016) “A framework for conceptualisation PSS
solutions: On network-based development models”, PhD Thesis,
Technical University of Denmark]
April 2016 Tim C. McAloone 15 DTU Mechanical Engineering, Technical University of Denmark
Research evaluation
DS2
15
Co-facilitator + live coding
Service project manager
Manager of after-sales
Service analyst
VALUE NETWORK
OFFER PORTFOLIO
OFFER PORTFOLIO
Understanding and supporting partnerships in reality
[Mougaard K. (2016) “A framework for conceptualisation PSS
solutions: On network-based development models”, PhD Thesis,
Technical University of Denmark]
Some final results from the consortium 1. Maritime branch
analysis
DK has a leading branch, with respect
to quality and efficiency
5. How to organise company for PSS?
Understanding of the change situation of the company, for the adoption of PSS
2. What do other industries do?
It’s difficult to servitise, but the
benefits are considerable
4. How to design a PSS?
Comprehensive development of own
tools, plus design methodology
3. If/when to servitise?
Each company we studied is different
and therefore needs careful guidance
6. What can PSS partnerships give?
Many cost and energy savings, new
business, greater global presence
7. How to make business out of this?
Creation of business model concepts and trialling of these in
the branch
Plus: • 25 academic publications
• and more in pipeline • 3 PhD projects • 6 bachelor projects • 10 master projects • 2 open industry conferences • PSS Configurator...
[www.proteus.dtu.dk]
April 2016 Tim C. McAloone 17 DTU Mechanical Engineering, Technical University of Denmark
Disposition
• Why service in a product-oriented world? And how to
incorporate it?
• Maritime product/service-systems: a recent project in
Denmark
• From frameworks and business models to
environmental and economical business cases
• Your readiness to innovate..?
• Questions
28/04/2016 MBO - MARCOD 18 DTU Mechanical Engineering, Technical University of Denmark
PSS types Production and distribution
Use End of life
Product-based
Product-related services
Advice and consultancy
Use-based
Leasing
Renting/sharing
Pooling
Result-based
Activity management/ Outsourcing
Pay per unit use (e.g. pay per wash)
Functional result (e.g. move object from A to B)
Product/Service Systems in the maritime industry
28/04/2016 MBO - MARCOD 19 DTU Mechanical Engineering, Technical University of Denmark
Product/Service Systems in the maritime industry – The network perspective
Sales
Business development
R&D
The network perspective of the business is influencing the way the suppliers collaborate
Supply chain stakeholder
Supplier
Vessels
28/04/2016 MBO - MARCOD 20 DTU Mechanical Engineering, Technical University of Denmark
Product/Service Systems in the maritime industry – The operational perspective
Performance
department Local service provider
Technical management
Sales
Business development
Dry docking yard
Vessels
R&D
The shipowner is the connecting link between the network of supplier, the vessel and other stakeholders in the maritime world. So it is important to consider this perspective as well.
Classification society
Supplier
Shipowner
April 2016 Tim C. McAloone 21 DTU Mechanical Engineering, Technical University of Denmark
What we’re currently doing to address help proaction (present tense)
• Decisions to be made based on Total Cost of Ownership (TCO).
From PSS design to PSS procurement
[Lars B. Jørgensen, Christian H.P. Johannessen (2013) An Exploration Of The Customer’s
Perspective of Product/Service-Systems - The Case Of TORM, Masters Thesis]
Project outputs: • Data specifications • Company specific cases • Equipment specs. • Benchmarking LCC • Management tool • Performance specs. • TCO guidelines • Ecology = Economy • Integrate data from other
shipowners • Compare & collaborate
with TORM’s existing project on LCC/LCE
Universities: • LC Model • Data testing • Publications
Life Cycle Cost
Models Practices Scenaria
Data
Life Cycle Environment
LCA C2C / Circular Economy
Scenaria Data
Research Project
Industry
Existing research
Shipowner input
Suppliers’ input
Data from other
stakeholders
COMMON LIFE CYCLE
MODEL
PSS Procurement Project co-funded by TORM Foundation
[Louise L. Kjær: PhD Project (2014-16) “Product/Service-System Design from a Life Cycle Environmental Perspective”
Aris Pagoropoulos: PhD Project (2014-16) “Product/Service-System Design from a Life Cycle Costing Perspective”]
29-04-2016 23 29-04-2016 23
Ship Life Cycle Model
Industry
[Louise L. Kjær: PhD Project (2014-16) “Product/Service-System Design from a Life Cycle Environmental Perspective”
Aris Pagoropoulos: PhD Project (2014-16) “Product/Service-System Design from a Life Cycle Costing Perspective”]
28/04/2016 MBO - MARCOD 24 DTU Mechanical Engineering, Technical University of Denmark
Product/Service Systems in the maritime industry
Should someone sell Product/Service-Systems in the maritime industry?
Should someone buy Product/Service-Systems in the shipping industry?
[Louise L. Kjær: PhD Project (2014-16) “Product/Service-System Design from a Life Cycle Environmental Perspective”
Aris Pagoropoulos: PhD Project (2014-16) “Product/Service-System Design from a Life Cycle Costing Perspective”]
28/04/2016 MBO - MARCOD 25 DTU Mechanical Engineering, Technical University of Denmark
Product/Service Systems in the maritime industry: methodology
• Goal: Evaluate the potential of performance agreements, where the supplier guarantees the performance of the product system
• Building the business case: Use Life Cycle Costing to extrapolate performance from current service delivery into the performance agreement
• Assess its impacts on service strategy: series of interviews & workshops to assess supplier & customer perspectives
[Louise L. Kjær: PhD Project (2014-16) “Product/Service-System Design from a Life Cycle Environmental Perspective”
Aris Pagoropoulos: PhD Project (2014-16) “Product/Service-System Design from a Life Cycle Costing Perspective”]
April 2016 Tim C. McAloone 26 DTU Mechanical Engineering, Technical University of Denmark
Some first results: PSS evaluation in the maritime industry
[Louise L. Kjær: PhD Project (2014-16) “Product/Service-System Design from a Life Cycle Environmental Perspective”
Aris Pagoropoulos: PhD Project (2014-16) “Product/Service-System Design from a Life Cycle Costing Perspective”]
April 2016 Tim C. McAloone 27 DTU Mechanical Engineering, Technical University of Denmark
Some first results: PSS evaluation in the maritime industry
0,00%
20,00%
40,00%
60,00%
80,00%
100,00%
120,00%
140,00%
Baseline With PSS No1 With PSS No2
Life cycle cost
Environmentalimpact
[Louise L. Kjær: PhD Project (2014-16) “Product/Service-System Design from a Life Cycle Environmental Perspective”
Aris Pagoropoulos: PhD Project (2014-16) “Product/Service-System Design from a Life Cycle Costing Perspective”]
PSS is not necessarily the most optimal…
28/04/2016 MBO - MARCOD 28 DTU Mechanical Engineering, Technical University of Denmark
Next level of depth: The operational perspective
Performance
department Local service provider
Technical management
Sales
Business development
Dry docking yard
Vessels
R&D
Classification society
Supplier
Shipowner
Should someone sell Product/Service-Systems in the maritime industry? Should someone buy
Product/Service-Systems in the maritime industry?
Supplier
Shipowner
Evaluation of the economic potential of Product/Service-Systems based on actual data from the operation of the vessels
[Aris Pagoropoulos: PhD Project (2014-16) “Product/Service-System Design from a Life Cycle Costing Perspective”]
28/04/2016 MBO - MARCOD 29 DTU Mechanical Engineering, Technical University of Denmark
Product/Service Systems in the maritime industry – Key findings
Performance
department Local service provider
Technical management
Sales
Business development
Dry docking yard
Vessels
R&D
Classification society
Supplier
Shipowner
Should someone sell Product/Service-Systems in the shipping industry?
Implementation depends on company strategy
Should someone buy Product/Service-Systems in the shipping industry?
Depends on their ability to implement and gain from the offering
Supplier
Shipowner
Great economic potential
Current lack of fundamental demand
Results
28/04/2016 MBO - MARCOD 30 DTU Mechanical Engineering, Technical University of Denmark
Product/Service Systems in the maritime industry – Promising results
Supplier Supplier
Shipowner Alfa Laval
Aalborg Service
Collaboration on optimising the steam system shows immediate savings of up to 25%
[Aris Pagoropoulos: PhD Project (2014-16) “Product/Service-System Design from a Life Cycle Costing Perspective”]
28/04/2016 MBO - MARCOD 31 DTU Mechanical Engineering, Technical University of Denmark 31
LCA/LCC on hull cleanings
Purpose: Test LCC and LCA method on maritime case
Scope: PSS comparison (comparing business as usual with performance agreement)
Type of PSS and improvement strategy: Product-oriented and optimised operational performance (use-stage)
Avoided costs and impacts: Reduced fuel consumption
Induced impacts: Extra hull cleaning service
Costs: Direct: Costs of the service. Indirect: potential off-hire
Environmental impacts: Direct: Potential sea water pollution. Indirect: Impacts from the service (materials and energy used).
[Louise L. Kjær: PhD Project (2014-16) “Product/Service-System Design from a Life Cycle Environmental Perspective”
Aris Pagoropoulos: PhD Project (2014-16) “Product/Service-System Design from a Life Cycle Costing Perspective”]
28/04/2016 MBO - MARCOD 32 DTU Mechanical Engineering, Technical University of Denmark
Disposition
• Why service in a product-oriented world? And how to
incorporate it?
• Maritime product/service-systems: a recent project in
Denmark
• From frameworks and business models to
environmental and economical business cases
• Your readiness to innovate..?
• Questions
28/04/2016 MBO - MARCOD 33 DTU Mechanical Engineering, Technical University of Denmark
Our continuing work
Our ideas for future work:
• Create the groundwork for designing, implementing and evaluating Product/Service-Systems
• Create synergies and improve shipowner-supplier integration
• Design & implement new business cases
Strong optimisation potential within HVAC:
“It is a well-known fact that A/C is a heavy consumer of power and fuel. Most of our vessels are only insulated with 50mm of insulation – even the ‘Super Ice’ class”
Chief Engineer
28/04/2016 MBO - MARCOD 34 DTU Mechanical Engineering, Technical University of Denmark
Your readiness to innovate..?
• Do you understand how to integrate service into your current offerings?
• Do you know how to calculate the business case?
• How to convince – or even better, work together with – the customer?
28/04/2016 MBO - MARCOD 35 DTU Mechanical Engineering, Technical University of Denmark
Chance to collaborate…
• Would you like to join us in a consortium? We’re currently building a project proposal to the Danish Innovation Fund, called CIRCit: Information technology solutions to enable circular economy in Danish industry. Let me know if you’re interested. - Deadline Monday 2nd May!! • Through-life
maintenance of long-life
equipment
• Responsible upgrade to
new technologies
• Service-partnerships
between supplier and
shipowner
• Life cycle data collection
for decision-making
Maritime industry:
Susta
inabili
ty
and P
SS
© Technical University of Denmark, Department of Mechanical Engineering, Section of Engineering Design and Product Development
Thank you for listening!
© Technical University of Denmark, Department of Mechanical Engineering, Section of Engineering Design and Product Development
Tim McAloone, Professor, PhD
Technical University of Denmark (DTU),
Department of Mechanical Engineering
Section for Engineering Design and Product Development
Building 426, Produktionstorvet, 2800 Lyngby,
Denmark
Telephone (+45) 4525 6270 Homepage www.kp.mek.dtu.dk
Email [email protected] www.proteus.dtu.dk
www.ecodesign.dtu.dk