As the first shipping company, MSC cracks complex supply ordering of marine provisions and general marine supply by moving their 700+ vessels from traditional analog provisions, stores and consumables ordering to real-time digital platform charting a path for transparent, streamlined procurement and accurate, time efficient deliveries in the marine industry within categories such as provisions, stores, spare parts, chemicals, paints, and lubes.
From the initial discussions with Source2Sea, when MSC was presented with the concept and the platform, MSC’s direction has been clear: Make a digital transformation of their procurement and supply processes that substantially improves efficient working ashore and at sea, “easy-to-use” and crew welfare onboard.
“The first and most important step in this transformation journey has been to acknowledge that, until now, the industry has not been ready to an extent necessary to drive the transformation. Our close collaboration with Source2Sea and key suppliers of ours has accelerated this journey that has been pivotal for MSC and is poised to be so for the marine supply industry as well. We are now rapidly expanding to other suppliers who are either already on the platform or coming on the platform in the coming period,” says Luigi Staccoli, Chief Procurement Officer, MSC.
Luigi Staccoli continues “We needed to create a common framework with suppliers through the assortment and move from generic items to specific items through a digital platform. There should be no ambiguity regarding what to expect. Just like you are never in doubt, when you order online as a private person.”
The transition from traditional analog trading of generic items, where the supplier is trying to figure out what the customer actually wants, hoping to be able to deliver it, to specific items always available, is all driven by shared data via the Source2Sea digital platform. With this shared data, there is only one source of truth for both the shipping companies and their suppliers, thereby preventing misunderstandings and mis-deliveries. Today, MSC Procurement, MSC Technical Management, MSC Fleet and the suppliers know exactly what is being ordered and delivered and the price.
“In essence, we have seen a development where the Source2Sea platform has made provisions ordering and delivery as well as controlling vessel spend a much easier process across our procurement and fleet management functions as well as the fleet itself. Errors have been almost eliminated meaning no time and frustration spent on substandard products, products that has not been delivered, returning products, emergency supply etc. Our vessels are very satisfied as the ordering and delivery process is similar to ordering at a wholesaler or retailer ashore. The vessels get onboard exactly what has been ordered in the right quantity and quality at the agreed price. Allowing our crews and purchasers to focus on their core tasks, removing the time-consuming analog provisions, stores and consumables ordering and delivery, is something I am particularly pleased about in this transformation,” Luigi Staccoli concludes.
Over the years, shipping companies and their suppliers have been spending endless resources on handling requests for quotation for particularly provisions, stores and consumables and trying to eliminate or at least streamline these highly analog transactional processes. Purchasers typically spend 50% of their time on only 8% of the vessel’s total spend (provisions, stores and consumables). The primary reason most shipping companies have not overcome these analog practices yet is the lack of transparency and real-time insight into the precise products available. As a result, the vessels are at risk of not receiving what they ordered at the right time, thus driving time-consumption, hassle and costs up. In addition, despite its small share of Operating Expenditure (OPEX), having the right provisions, stores and consumables onboard has an outsized impact on seafarers’ wellbeing and safety.
Mikael Weis, CEO Source2Sea explains “The shipping and ship supply industries have been slow to join the digital transformation, but now that broadband satellite connectivity has become available onboard all vessels, things are changing fast. Our digitalization of marine procurement and supply reduces complexity, enables reduced cost through greater efficiency and transparency, and will finally benefit all stakeholders in the supply chain, including the vessel crews.”
The shared data is accessible in real-time on the Source2Sea platform. It is seamlessly integrated with the shipping companies’ Fleet Management Systems and the ship suppliers’ order and ERP systems.
Mikael Weis continues “On the supplier side, the processes have also become much more efficient and effective. The former analog ordering – and at times unintentional communication disconnect – was inefficient, time consuming and costly for both MSC and the provisions, stores and consumables suppliers. In place is now an efficient process eliminating endless Requests-for-Quotation and orders that has to be more or less interpreted by suppliers, hassle free delivery of the right products in the right quality onboard the vessels reducing returns to almost zero and – most importantly – strong customer satisfaction at all levels”.
It is a vital feature for MSC that they are now able to control that the items meet their ESG demands. This information is made accessible for the crew, which helps MSC manage their waste on board – mitigating overspend and food waste.
“What you click is what you get” has become a reality at sea and to fleet and catering management.
