Maritime Procurement Manager 4.0

In a new series of one-to-one interviews exclusively for the MT Journal, IMPA COO Stephen Alexander delves into the minds of marine procurement leaders to share their insights and thoughts, and to ask what’s next. For this issue, Stephen travelled to Scotland to meet Allan Muir, Director of Digital Supply Chain at Teekay Shipping

A lot is going on in the world; global economics and markets continue being uncertain, the Brits are facing Brexit and other issues are constantly arising. Despite all this, we are also living through a revolution – it is the fourth industrial one and is characterised by the pace, scale and level of technological innovations. Acutely disruptive, it is really fuelling momentous change and it would be naïve to think that the maritime industry is immune to it. K D Adamson, premier futurologist to the maritime industry who was IMPA London’s keynote speaker last year, called this revolution the e-naissance, predicting that the next 30 to 50 years will bring more change than there has been in the centuries since the beginning of the renaissance. 

The good news is that so far, the maritime industry has been holding its own in this environment. Consider 3D printing, which is often used as one of the headliners describing industry 4.0, alongside nanotechnology, robotics and AI. A good case in point? Fieldlab, a business unit based in the port of Rotterdam, has already piloted the 3D printing of marine spare parts and plans to produce both plastic and metal parts in a three- to five-year window. Another case in point is autonomous ships. Three years ago, I was invited to sit in on a meeting where a confidential project with multiple stakeholders was established; the project would explore crewless shipping and it continues to receive large-scale investment today. There really is something new reported every day; this morning, there was a LinkedIn post on Wilhelmsen’s link-up with Airbus for shore-to-ship drone delivery. 

“THE GOOD NEWS IS THAT SO FAR, THE MARITIME INDUSTRY HAS BEEN HOLDING ITS OWN IN THIS ENVIRONMENT”

What matters to IMPA members, however, and what I am interested in for this article is how this new revolution and the disruption it brings will impact the maritime supply chain and what is being done about it. To find out, I have turned to a procurement leader who has wholly embraced this new domain, as seen with his relatively recent change in job title.

Allan Muir is well-known to many as the Head of Procurement at Teekay Shipping. Based in Glasgow, Allan has a long-standing record in the maritime procurement profession and brings forward an impressive CV. 

He spent time with ship-managers Acomarit and then a role as CEO at buying organisation Marcas when it was based in Geneva (which gave him the introduction to Teekay), so you could say that Allan knows a thing or two about procurement. Add to this resume a passion for the technical side of the business in which he is self-taught and what you get is an all-round maritime procurement practitioner of the highest level.

In any case, you can imagine my surprise when I saw that Allan’s job title had changed from Head of Procurement to Director of Digital Supply Chain. To anyone who knows him well, however, this change did not come as a surprise – Allan is known as dynamic, thoughtful and highly creative in the way he views the business and the role of procurement. He is the perfect person to ask about industry 4.0 and what it means for IMPA members.

When I put the question to Allan, he smiled. He quickly launched into a clear explanation about how there is a lot of hype around this subject and how important it is to focus on the practicalities of disruption. According to Allan, procurement has a unique opportunity in the digital arena and the starting point is to embrace the concepts instead of fearing them. Excellence in procurement is the goal, while the tools that get us there come afterwards; you utilise the available technology to enhance and further develop the efficiency and quality of procurement processes. Shipping companies are not software developers, he added, and they should only utilise IT as a support function. 

“Allan firmly believes that when you start a close analysis, you will realise that more than 50% of the business can benefit from automation in some way or another”

For Allan, procurement is all about adding value and data is the tool to do so, as it helps to leverage complex advancements to the procurement function. New trends in how you can manage and gain access to data provide the commercial opportunities that can add real value to the organisation. These opportunities can be efficient operation and improved technical understanding and management.

The strategy Allan employs is highly creative and adaptable. He began this journey with a careful analysis of the supply chain and a fresh look at processes. In particular, he looked closely at the company’s road map and the affecting road blocks to efficiency. From here, he formed a dynamic strategy for digital transformation.

Allan firmly believes that when you start a close analysis, you will realise that more than 50% of the business can benefit from automation in some way or another; he drew on the airline industry and the space sector to make his case. These organisations, he demonstrated, are redefining their business through looking at continuous innovation now and long-term, the latter being influenced by political, geographical and economic trends.

More importantly, Allan was keen to explain that embracing technology and adapting to change does not involve spending a lot of money. He described it as a mindset to adopt new ideas, be more creative and try new approaches. To him, it is more of an experiential process; if something does not work, then stop and try something different. He introduced me to the concept of ‘fail fast, fail forward’; on researching it, I see it now as a key approach adopted by some entrepreneurial thinkers. It is about believing in a strategy of trying something, getting immediate feedback, then rapidly inspecting and adapting. I would really encourage others to look at this approach.

He also emphasised how you should always start by looking at where there might be quick wins, i.e. things that you can change and make an immediate impact. Getting these quick wins under your belt always builds confidence and sets the tone. This involves looking at ways to streamline the supply chain and identifying process delays. Allan coordinates teams that explore such issues in creative ways and mixes different people in the business to consider how to improve delivery speed; that is key to efficiency. He admits that culture plays a large part in this; you need to have people around you with the right mindset, combine experience with young fresh minds and have the right attitude.

According to the founder and chair of the World Economic Forum, Klaus Schwab, developing a culture and climate for fast-paced change is a challenge that requires strong and capable leadership and it is something that could really hold back the pace of change. Writing in his book titled The Fourth Industrial Revolution, Schwab suggests that the adaptability of leaders in this new domain is one of the two principal factors that will prevent progress in this domain, with a need to rethink economic, social and political systems. The other factor is a consistent, positive and common narrative that sets out the opportunities and challenges, and one that empowers many individuals to avoid any backlash to change. To my mind, this means creating greater levels of understanding between all industry actors and something that IMPA has as a cornerstone of its purpose.

“It is about time to give suppliers a break and work together to leverage efficiencies”

In this respect, Allan pointed to collaboration and his work with his key suppliers. Like many procurement leaders over recent years, Allan has had a focus on reducing his number of supplier and moving towards contracting, with about 80% of his suppliers on contracts. He has a vision for supplier knowledge exchange and a strategy that leverages data and information via a cloud-based virtual planned-maintenance system; this system is a kind of super-data network that combines information from the ship, the office and selected key suppliers. Allan believes that, within a window of one to two years, he will be accessing all aspects of the ship’s operation from his desk.

Allan’s vision involves total transparency with his supplier network; his suppliers may access the system and report quickly on what is happening on board. He thinks it is about time to give suppliers a break and work together to leverage efficiencies, combining their expertise with that of the procurement and technical teams. After all, as marine products and services develop and advance faster than ever, it will become impossible to keep up with the data unless we rely on the supplier organisations and, in particular, the OEM companies. 

Allan sees a roadmap for managing data on a massive scale. These initial efforts represent baby steps towards machine learning. It is a roadmap that takes account of what technology can do now and what it could do in the future. It includes machine learning, remote diagnostics of ships’ equipment and automated product-updating, the ability to predict and remotely fix technical errors with equipment and prevent potential failures from occurring before they do. Allan’s new contract system, another project in his digital pipeline, has the ability to look at machine learning right now, but he did suggest that a degree of patience and pragmatism is needed, as the industry is not quite ready for the scale of big data management needed. Some platforms are yet to be developed by the industry, he added.

Clearly, the industry has work to do and it is already working towards the goal; what is happening right now is exciting already. Talking to Allan, it has become clear that what is important is an attitude that combines pragmatism with creativity, so as to generate innovation. Anyone who is interested in what route to take? My suggestion is… Follow the leaders!

Stephen Alexander