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Tuesday, June 19, 2018

Maritime Logistics Professional

Digital Twin (Ship) Is NOT just for Cost Cutting

Posted to Shipbuilding and Offshore Software (by on April 6, 2018

A focus on “cost cutting” is not optimal, unless you plan on just competing on price alone.

(Image: SSI)

A common strategy that is being implemented throughout our industry is to have a Digital Twin (Ship). However, many companies are falling into the trap of using their digital strategy to only improve the way they are working today. This focus on “cost cutting” is not optimal, unless you plan on just competing on price alone.

There is no doubt that a digital environment will significantly reduce the many non-value activities you have throughout your business. However, if cost cutting is the main driver you will be on a path to have minimized your costs for a world that no longer exists.

Technology is terraforming a new world where we need to rethink and change the value we are providing our clients. The future will not be an extension of the present and therefore a pure cost cutting initiative is short lived.

This is not to say that we should not continue to improve our processes and implement technology to reduce cost, it just simply should not be our primary focus. The primary focus needs to continue to be focused on adding more value and differentiating you from your competitors and then optimizing the areas which can accelerate the value.

Future is not an Extension of the Present
The path that the future of business will take in shipbuilding and shipping is unknown. The only certain thing is that the future will not look like the present. In essence, the present (status quo) is on a totally different trajectory.

We have already seen huge disruption in other businesses such as the automotive industry. In the future, ride sharing companies/people might even be the main consumers of cars. If that happens, it will totally change what we value from a car.

That sort of change is starting to happen everywhere, including in shipbuilding. Increasingly, the value that people are looking for is an end-to-end solution for things that are not part of the customer’s business. For example, Rolls-Royce is extending their “Power-by-the-Hour” strategy from aerospace to shipping by providing a solution to monitor and manage all equipment on several cargo ships. The operator of the cargo ships which business is “Transporting widgets from A to B” was happy to offload the burden of ensuring their assets run reliably and perform well. This leaves the shipping company to focus more on adding value to their customers.

The technology that is available to you today is expanding the possibilities and can significantly change the value you could offer. Thus, I really want to stress that having a digital strategy that simply focuses on cost cutting is ignoring that you can boost your business value in other ways. This could be by providing post deliver services, creating the required deliverables to support the future of autonomous/semi-autonomous/unmanned ships, embracing customer changes at a minimal cost, and many other strategies.

Closing Remarks
Price is always a consideration for most of your customers, but low price is probably not the value you offer. It is important to always be looking at how you can increase your value, not just efficiency.

We are seeing the world changing in front our eyes with many new businesses disrupting long-time successful behemoth companies.

Many of us have already started our business transformation where we are looking at digitizing our company and even started the journey to the digital twin. This will most definitely reduce cost, but more importantly, it will allow us to do the things we were not able to do before.

The future is not an extension of the present and the value your customers will require tomorrow will not be the same value they are asking for today.

Create value first, optimize it second.


The Author
Denis Morais is CTO of SSI where he is responsible for developing and directing the strategic product vision for SSI’s software and services. This involves analyzing industry needs and technological trends to prioritize SSI product creation and enhancement. Denis oversees SSI’s development team and consults with clients directly to implement optimized solutions that address their unique constraints and business requirements. Denis is a world authority regarding the future of shipbuilding and technology. He is an award winning author, writes a popular blog, and is a sought out presenter at international conferences. He is an active participant in several shipbuilding and technology organizations such as RINA, SNAME, the Autodesk Developer Network, VIATeC and Autodesk University.

Tags: technology shipbuilding

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