Outsourcing – The Green Answer (Ari Marjamaa, Dnv Maritime Advisory)

Outsourcing – the green answer?
Performance critical outsourcing for the maritime industry

Ari Marjamaa, Director
DNV Maritime Advisory Nordic

November 18th, 2009

Framing the issues
Can outsourcing
- Play a role in helping ship
owners conform to new
regulations?
- Contribute to a company’s
green profile?
Is the growth of outsourcing a
threat or an opportunity for
class?
18 November 2009
© Det Norske Veritas AS. All rights reserved. 2

Change in
regulations?
What
changes?

18 November 2009

Environmental regulations are here to stay
BEYOND CO2PENHAGEN FUTURE REGULATIONS
BALLAST WATER
EEOI
RECYCLING
EEDI
SEEMP CO2 NOx, SOx & “PM”
SCRUBBERS
FUEL LEVY
VOC
ETS
+++

But also: Increased stakeholder awareness
18 November 2009

Compliance depends on your capabilities

TECHNOLOGY

PROCESSES PEOPLE &
& ACTIVITIES COMPETENCE

18 November 2009

Most companies face the capability gap
NEW TECHNOLOGY
INCREASING FLEET &
CAPABILITY COMPLEXITY
INCREASING
COMPETITION
ities
abil
cap CHANGING
ired
ny requ REGULATION
pa
Com
Status quo NEW MARKETS
Compan
y capabi
lity outlo
ok LOWER EMPLOYEE
RETENTION
FINANCIAL PRESSURES
COST CUTTING

TIME

18 November 2009
11 November 2009 Slide 6

Your capabilities determine your green performance
Technology vs capability – what matters the most?

World class
5 Arctic spills
capability
4 CO2
Waste
CAPABILITY
VS 3
Alien Species
TECHNOLOGY Mammal
2

1 NOx
Technology

0
0 1 2 3 4 5
Environm ental im pact
ENVIRONMENTAL IMPACT
(Measured as environmental significance, impact on brand, cost
and compliance)

18 November 2009

Access to capabilities increasingly drive outsourcing
EXAMPLE: SHIP MANAGEMENT
COST AS DRIVER

DILEMMA
1970s 2000+ TODAY:
ACCESS TO
LOWER COST
&
1990s CAPABILITIES
AT THE SAME
TIME
CAPABILITIES AS DRIVER
18 November 2009

The same discussion…in 1998
It's a sad thing that people who
have known about the imposition
of ISM becoming mandatory for
the past four years are now, some
of them, still rushing to gain
certification.
BRUCE W.B.
LUCAS
Atlantic Marine

Vessel owners with smaller
number of vessels would benefit
RAMESH BHAT
by having 3rd party managers to
Jardine Ship deal with the ever demanding
Management maritime legislation worldwide.
18 November 2009
http://www.marinelog.com/DOCS/sman.html

So, can outsourcing help
ship owners conform to
new regulations?
And does it contribute to
a company’s green
profile?

18 November 2009

YES…

18 November 2009

…but it all depends on what you can outsource

Strategically
important In-house

IMPORTANCE
TO PRIME
PURPOSE

Outsourced
Not
strategically
important
Not needed Critical

CORE COMPETENCE TO ACHIEVE PURPOSE

18 November 2009

Managing uncertainty and risk through outsourcing
If you do not have the technology…
…outsourcing might give you cost efficient access to it

If you do not have the right people & competence…
…outsourcing might let you get access to them quickly,
without developing from scratch

If you do not have the right processes & activities…
…outsourcing might let you leverage on something that
already exists

But will you need the capabilities in the future?
18 November 2009

Outsourcing places demands on the company

Fundamental
competence 3rd party
available in- support to
house to select, OR select, monitor
monitor and and control 3rd
control 3rd party party services
services

18 November 2009

Partnerships contribute to company image and brand

Green Ship of the Future

Sustainable shipping

Clean Cargo

SEAaT

BUT ONLY REAL CAPABILITIES CAN BUILD A REAL GREEN PROFILE

18 November 2009

All in all, outsourcing can be good for you

SOME ADVANTAGES… …AND SOME BUTs
Good for the company The 3rd party supplier
- Quicker needs to offer significant
- Cheaper advantage
- Less hassle
You still need to be in
Good for the industry control
- Quicker ramp up to meet
requirements You will not be a green
- Knowledge diffusion champion solely through
- Drive innovation outsourcing
18 November 2009

Is the growth of
outsourcing a
threat or an
opportunity for
class?

18 November 2009

The survey is still a complex process…

18 November 2009

…with some critical success factors
Efficient organization of
TIME work
Decision making

Number of parties involved
TRANSACTION
COST Effective organization of
work

COMPETENCE Competent counterparties

18 November 2009

Opportunities – and some challenges too

Drive development
Need for verification
Competent counterparties

Conflict of interest
Lack of clear mandate
Interaction with too many
parties
18 November 2009

Peanuts does
not always get
you monkeys
Monkeys, or
elephants, are
not always
what you need
Some times,
all you need is
a cost efficient
expert
18 November 2009

Safeguarding life, property
and the environment

www.dnv.com

18 November 2009

Outsourcing – The Green Answer (Ari Marjamaa, Dnv Maritime Advisory)

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