Best practice study 2013

Overview and study results / Case study – Aegean Bunkering Services Inc.

Kevin M. Brunn Director Clients & Markets GL Maritime Software

Marina Ritsou Superintendent Engineer Aegean Bunkering Services Inc.

Digital Ship Athens 28.11.2013

www.gl-group.com | www.gl-maritime-software.com Agenda

• Part I: Presentation of results of Best Practice in Ship Management Study Kevin Brunn – Director Clients & Markets Maritime Software, DNV GL Software

• Part II: Case Study Aegean Bunkering Services Inc. – Best Practice Examples Marina Ritsou – Technical Superintendent, Aegean Bunkering Services Inc.

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 2 DNV GL Maritime Software | Digital Ship Athens 2013 Introduction

• Best Practice comprises all approaches, procedures, business models or tools that ship managers use to do their business smarter, safer, and greener – i.e. to be on top of competition. • Ship managers are under increasing pressure. Overcapacity in the market is driving charter rates down. Ship owners face higher costs to finance vessels. Ship operators fight for cargo and drive down their main cost block, which is fuel. Ship managers sit in the middle with increasing burdens for the same management fees. • In 2013, GL () and Fraunhofer Center for Maritime Logistics and Services conducted a study involving around 100 ship management companies worldwide to find out what they are doing to improve their operations and what they consider as “best practice” in the industry. • We would like to share these best practices with you and to give you the chance to reflect against your own operations and get inspiration and ideas on additional improvement areas.

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 3 DNV GL Maritime Software | Digital Ship Athens 2013 The best practice study serves as a guide to reflect own ideas, priorities and have a look “over the fence”

• Collection of over 50 common qualitative observation and quantitative statistics across all companies • Derivation of 30 best practice measures in the 5 key areas of all ship managers • Many connected context boxes with subjects that came up

A “Best practice” is not understood as recipe that fits in all circumstances to all companies.

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 4 DNV GL Maritime Software | Digital Ship Athens 2013 Shipping companies are using the crisis to sort themselves – our study should help

We have asked around 100 shipping companies around the globe: • What are the areas you are working on to improve your business? • What have you seen in other companies you consider as “best practice”?

“Best practice” in this study comprises all approaches, procedures, business models or tools that ship managers are using to do their business smarter, safer and greener, i.e. to be on top of competition.

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 5 DNV GL Maritime Software | Digital Ship Athens 2013 Is looking at best practice common?

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 6 DNV GL Maritime Software | Digital Ship Athens 2013 The role of information and communication technologies

• Shipping has in the past largely underinvested in software (e.g. compared to Oil & Gas industry) • Despite crisis majority of respondents do not cut back IT budgets • Enabling function for best practices is well understood among respondents

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 7 DNV GL Maritime Software | Digital Ship Athens 2013 Where are the biggest perceived challenges?

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 8 DNV GL Maritime Software | Digital Ship Athens 2013 Results summary: Best practice in crewing

Representative quotation:

Getting the same senior officers back onboard of the same vessel is the ultimate goal of crew planning. Fewer crew changes mean lower costs and more commitment from senior officers for ‘their’ vessel.

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 9 DNV GL Maritime Software | Digital Ship Athens 2013 Results summary: Best practice in crewing

Common observations Best practices • Organizationally, many shipping companies re- • Invest in culture and teamwork insource crewing activities • Invest in crew welfare packages again • Integrate training, appraisal and • Culturally, a lot of focus is development management systems given to training, development, • Use a combination of personal and welfare package and computer-based training teamwork. • Use an integrated crewing solution • Process-wise, re-insourced onboard and onshore crewing processes need proper system support

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 10 DNV GL Maritime Software | Digital Ship Athens 2013 Results summary: Best practice in financial mgmt.

Representative quotation:

Managers with field experience should be employed in Finance.

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 11 DNV GL Maritime Software | Digital Ship Athens 2013 Results summary: Best practice in financial mgmt.

Common observations Best practices • Separation of finance from operations seen as issue • Integrate Operations with Finance • Too much complexity built • Simplify and harmonize the accounting up in last years structures • Centralize the invoice registration • State-of-the-art finance process systems not common • Harmonize and automate reporting • Invest in cash management procedures

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 12 DNV GL Maritime Software | Digital Ship Athens 2013 Results summary: Best practice in quality & safety mgmt.

Representative quotation:

The critical success factor is awareness of the individual crew member that he can make a difference in both quality and safety, and all focus of a Quality & Safety Management system is directed towards this.

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 13 DNV GL Maritime Software | Digital Ship Athens 2013 Results summary: Best practice in quality & safety mgmt.

Common observations Best practices • Dedicated QS teams reporting to MD common • Move from QS to QHSE • Staff awareness on QS issues • Deploy and monitor regular crew is critical success factors training on safety issues • Nurture a “no accusation / blame” • Process supporting systems culture start to come in • Use integrated Quality & Safety solution • Automatically produce regular quality and safety KPI reports fleet-wide • Have risk assessment integrated in regular processes

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 14 DNV GL Maritime Software | Digital Ship Athens 2013 Results summary: Best practice in procurement

Representative quotation:

Our goal is to move from “just purchasing” to a more strategic supply chain management perspective. This includes materials and vendor management as well as the whole transportation, storage, material and information flow.

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 15 DNV GL Maritime Software | Digital Ship Athens 2013 Results summary: Best practice in procurement

Common observations Best practices • Organisational and process measures common to increase • No purchase outside the system (no data quality “maverick buying”) • Purchasers are bound into • Harmonize and centralize the management of master data processing and have too little time for sourcing activities • Communicate with suppliers electronically • Supplier treatment changes to • Plan demands fleet-wide a more long-term partner approach • Embrace strategic sourcing activities • Reduce number of suppliers

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 16 DNV GL Maritime Software | Digital Ship Athens 2013 Results summary: Best practice in technical mgmt.

Representative quotation:

We have focussed too much on ‘papers’ and we are asking every day for more and more paperwork, forgetting the ‘hardware’, i.e. the ship’s structure.

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 17 DNV GL Maritime Software | Digital Ship Athens 2013 Results summary: Best practice in technical mgmt.

Life Cycle Management is a growing trend in Technical Management • 82% - focus on machinery • 74% - focus on hull structures

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 18 DNV GL Maritime Software | Digital Ship Athens 2013 Results summary: Best practice in technical mgmt.

Common observations Best practices • Different organisational options are tried out, “fleet • Organize along processes teams” becomes common • Build processes around a state-of-the- • Planned Maintenance art planned maintenance system Systems standard • Harmonize and centralize the management of master data • Life cycle management view with increasing importance • Manage a key element of your maintenance budget: dry dockings • Pay attention to hull maintenance • Embrace condition based maintenance

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 19 DNV GL Maritime Software | Digital Ship Athens 2013 Aegean Bunkering Services Inc.

• Aegean Bunkering Services Inc. is a subsidiary of Aegean Marine Petroleum Network Inc. (AMPNI) an international marine fuel logistics company that markets and physically supplies refined marine fuel and lubricants to ships in port and at sea, listed in the NYSE since December 2006. • Aegean procures product from various sources (such as refineries, oil producers, and traders) and resells it to a diverse group of customers across all major commercial shipping sectors. • Aegean has a global presence in 21 markets, including Vancouver (BC), Panama, Jamaica, Trinidad & Tobago, Gibraltar, U.K., Greece, the United Arab Emirates, Mexico, Montreal, Singapore, Morocco, Antwerp-Rotterdam- (ARA) region, Gran Canaria, Barcelona and Algeciras. • Aegean Bunkering Services Inc. operates 65 vessels, 34 of which are between 1-6 years of age. The vessels operate in 11 bunkering stations worldwide.

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 20 DNV GL Maritime Software | Digital Ship Athens 2013 Aegean Bunkering Services Inc.

The Challenge: • Create a preventive maintenance system that will help us monitor the condition of our ships around the globe, in a real time & efficient manner. • Create an “all-in-one” system to monitor routine jobs, as well as, defects. • Give our people a simple tool to manage outstandings on board and from shore. • Set the milestone for a maintenance history database that we can draw upon as time passes.

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 21 DNV GL Maritime Software | Digital Ship Athens 2013 Aegean Bunkering Services Inc.

Our Approach • Management commitment. • In-house creation of database for an electronic, vessel-specific PMS & implementation ashore (particularly using the Fleet Equipment Register of GL ShipManager to centralize fleet technical data) • Installation on board & tailor-made crew training by company personnel. • Continuous exponential improvement (fine-tuning) through all users feedback.

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 22 DNV GL Maritime Software | Digital Ship Athens 2013 Aegean Bunkering Services Inc.

Our Future Goals • New approach for Dry-dockings and Hull Maintenance • Procurement Management • Quality & Safety Management

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 23 DNV GL Maritime Software | Digital Ship Athens 2013 Get your copy of the Best Practice study at Stand 30

DNV GL Software: Most innovative portfolio of software for a safer, smarter and greener future

GL ShipManager Innovative fleet management

GL HullManager Hull Integrity Management based on a vessel-specific 3D model GL CrewManager Complete crewing and crew management GL FleetAnalyzer KPI monitoring, fleet summaries

DNV Navigator Smarter ship and fleet operations

Sesam Survey Simulator 3D hull inspection simulation

Superintendent‘s Manual Industry knowledge and best practice

Best Practice Ship Management Study / Case Study Aegean Bunkering Services Inc. | No. 24 DNV GL Maritime Software | Digital Ship Athens 2013 Thank you! Kevin Brunn Director Clients and Markets Tel. +49 381 673 11 37 Email: [email protected]

[email protected] www.gl-maritime-software.com www.gl-maritime-software.com