Going Digital, Enterprise-Wide
When working in an organization with multiple business units, like a shipyard, it’s typical for managers to focus on adopting digital solutions that optimize their own project. In this post, we explore how to unlock even more value by taking individual use cases company wide.
Many of the executives we speak to say they are looking to standardize their digital tools and platforms across their enterprise. When done successfully I have seen, first-hand, how it breaks down communication silos and improves collaboration because more data is being shared.
The Top 3 Company-Wide Digital Use Cases Developed for the Shipping Industry are
- OPTIMIZE DESIGN – Creating central libraries for designs elements so they can be repurposed on sister ships. This tool also supports the uptake of modular construction methods.
- OPTIMIZE RESOURCES – Gaining a company-wide view of resources to optimize who is going to do each job, and the things they need to do it. This tool also supports a quicker response to change orders.
- IMPROVE MARGINS – Consolidating cost data from multiple projects to increase the accuracy of future bids and improve profit margins.
Developing company wide use cases like these also makes it easier to replicate on multiple projects and to introduce to new workers.
Start Small and Go-Digital from There
As they say, timing is everything, especially in shipbuilding. Quite often, the best time to take a digital solution enterprise-wide is after it has been successfully piloted at the business unit level and even piloted again in a second business unit. Both user uptake and measured results demonstrate the digital solution’s scalability and potential to be applied company wide.
A Use-Case Example
We know the costs of material and equipment represent more than half of the costs of a delivered ship.
One shipyard embraced the potential of enterprise-wide use cases by using standard interfaces for mounting equipment. Even though equipment may have differing bolting arrangements and dimensions, it is still technically feasible to create flexible mounting systems which can accept a variety of equipment.
Another shipyard embraced the potential of enterprise-wide use cases, beginning with standardizing the specifications for thermal insulation. Previously, the company had sourced similar products from different suppliers. Why? The products were not coded in their resource management system, so designers creating insulation systems for hulls, bulkheads, and decks could not determine what elements were similar. The manager was looking for a solution that would enable them to use fewer products in place of the many different ones ordered previously.
By digitizing and standardizing material element data (starting with insulation and moving onto other raw materials and components), the company gained an enterprise-wide view of element volumes, which allowed it to standardize specifications, and aggregate purchase orders to obtain savings. This also meant the shipyard benefited from reduced supply chain management costs and much greater responsiveness by the preferred supplier. Correspondingly, the supplier benefitted from lower costs of sales, and the ability to reduce costs through better understanding of shipyard’s needs.
Improving Cost Estimating Company Wide
While many companies maintain databases of parametric cost factors for bidding, they rarely follow up with the actual costs at the end of their projects to gauge the accuracy of those estimates. By using software to analyze individual drivers of past project costs, companies are able rapidly assess a realistic level of effort and cost for a project and compare those figures to subcontractor quotes.
Imagine if a shipbuilder (or a ship owner) took the initial contracts from all their past projects, incorporated amendments and change orders, to create a database of all final costs by both time in labour and materials. This would serve as statistical model to determine the factors that would most accurately predict final project costs, such as the likely number of structural engineering hours required for changing the hull dimensions, or projected materials cost of high-density steel for high stress areas.
The result is a procurement tool that identifies benchmarks of a project’s final cost. When bids come in, you will immediately know if these are within the expected range for that type of work. Today, managers using enterprise-wide cost-estimating software can evaluate bids for procured contracts within an average of two days, down from the weeks spent in negotiations with subcontractors. This gives companies confidence to estimate costs more accurately and project margins.
Five Practices for Going Digital
Most shipbuilders and shipowners have embraced the idea of going digital. All of us at InnovMarine are determined to see your software platforms bear fruit by helping to streamline your digital solutions.
We want to help you make bold moves that embed digital technologies in your operations, enterprise wide. Our experience shows that adopting the five practices covered in this series improves the odds that your digital transformation will yield measurable results.
- Focus on fixing pain points, not installing new technology
- Scale your digital twin by adding schedules, contracts, construction documents and more
- Choose digital tools that promote collaboration
- Develop a digital execution
- Roll out digital solutions enterprise-wide to optimize design, resources, and profits
If you are just getting started or looking to scale up your digital solutions to transform your business, we’re here to help you double your efforts. Just email us to get started.
Warmest regards,
David Males