Crowley Petroleum Services, Inc.
Speeding up ordering, reducing administration
and saving money with ShipServ TradeNet
Case Study: Crowley Petroleum Services, Inc.
• On track to achieve a 2% reduction in spend
• Time spent per vessel reduced by 23%, from 9.2 hours to 7.09 hours per week
• More vessels managed with the same number of people
• Better on-time delivery of orders reduces the risk of delays in port and off-hire days
• Enhanced vendor performance data leads to additional contract discounts
The Company The Challenge Crowley Petroleum Services - a snapshot
Crowley Maritime Corporation began life in Crowley is well-known in the shipping • Locations: Jacksonville, Florida and Long
the 1890s on the west coast of the USA as industry as a progressive organization. A Beach, California
a ship vessel support company. Today the prime example of this is a top manage- • Fleet type/size: 100 petroleum barges and
company has six major lines of business ment directive for the company to be a tankers
with operations that span the United States, “paperless organization” by 2010. So it • No. Of Employees: 2500-3000 including
Central America, and the Caribbean Islands, was no surprise that Crowley began look- vessel crews
with support operations in key locations ing for ways to further streamline its pur- • Departmental responsibilities: The
in Canada, Europe, Asia and Africa. The chasing organization and create increased Jacksonville, Florida operation supports all east
company is privately owned by the Crowley visibility. Crowley had two major objectives: coast USA petroleum services, US government
family and the company’s employees. firstly, to be able to increase the number contract vessels, Crowley Logistics and Crow-
of vessels without the need to add more ley’s salvage and marine organization.
The focus of this case study is Crowley people in purchasing; and secondly, to • ShipServ customer since: August 2008
Petroleum Services, Inc., which operates reduce spend by 2%.
100 petroleum barges and tankers. Crowley
Petroleum’s Vice President of Procurement Having first seen ShipServ at a trade
is based in Jacksonville, Florida, with pur- show, Crowley’s VP of Procurement went
chasing teams in the same location on the on to see the system in use at two other
east coast, and another on the west coast shipping companies. Following a success-
in Long Beach, California. Richard O’Malley ful trial, Crowley signed up for ShipServ
is Purchasing Supervisor for the east coast TradeNet in August 2008.
division, supported by nine buyers and a
warehouse management team. Together the Starting with the commercial side of the
team manages purchasing for 55 vessels. business, the company then went on to
A ShipServ customer since August 2008, extend its use of ShipServ to the vessels
the company is using ShipServ TradeNet in it was managing under military contracts.
this location first, and is planning to extend “It took us a little longer to get things up “Our buyers can now point to a
its use out to the west coast operation at a
and running on the military side due to the vendor’s performance with regard
more complex nature of military contracts,
but overall the implementation went rela-
to response times and prices – this
tively seamlessly,” said O’Malley. definitely helps them negotiate
discounts in contracts.
It’s been a big boon.”
Richard O’Malley, Purchasing Supervisor,
Crowley Petroleum Services, Inc.
Case Study: Crowley Petroleum Services, Inc.
The ShipServ difference
Fast, measurable returns
The Solution is now more effective. “Not having to waste TradeNet system in order to reap the maxi-
time doing things like standing by the fax mum benefits. A willingness to use TradeNet
ShipServ TradeNet is integrated with machine allows us to do other parts of our is now part of Crowley’s vendor evaluation
Crowley’s NS 5 purchasing system (from jobs that were done a bit more haphazardly criteria. As a result, the company is well
ABS Nautical Systems LLC). Requisitions before,” said O’Malley. on the way to achieving its goal of trading
are sent by the ship managers for approval with 80% of its vendors through ShipServ
by the port engineers. Approved requisi- With 15% of orders not reaching vessels on by August 2009, making it easier for the
tions are sent on to the buyers who are time, expediting deliveries is a major part purchasing team to manage an increasing
then tasked to go out to market to find the of a buyer’s job. number of vessels with
best deals. By January 2009 – six months Thanks to ShipServ the same number of
into the implementation – Crowley had releasing time Increase in the timely arrival of people. As Crowley is
already achieved significant success trading spent previously on materials to ships still within its first year
electronically via TradeNet with 46.5% of manual purchas- using ShipServ only
its 3900 vendors. In the last quarter this ing activities, the buyers are now able to time will tell if the company’s second objec-
accounted for 1340 (46%) of the 1571 be more proactive in following up delayed tive will be achieved, but O’Malley believes
Request For Quotes (RFQs) sent out. orders and resolving invoice and purchase that they are already “on track” to achiev-
order mis-matches. This has had an obvious ing the desired 2% savings – an impressive
The Benefits impact on the vessels: in a recent internal achievement in a relatively short space of
survey the ship crews reported an increase time.
The benefits of doing business through in the timely arrival of materials. Although
TradeNet have been twofold. Firstly, it has Crowley has not yet quantified the decrease About ShipServ
meant the team is more productive. With in time the vessels are held up in port wait-
much visibility into the process, the buyers ing for materials, O’Malley is certain that ShipServ is the leading maritime e-market-
spend less time chasing up responses from by being more effective in expediting orders place, helping the buyers and sellers of ship
vendors. “Time is the biggest saving,” said that purchasing has been able to make a supplies to reduce the costs associated with
O’Malley. “We significant contribution doing business together. In 2008 ShipServ
have detailed Time spent per vessel reduced to avoiding costly off-hire helped its members save an estimated
data that tells us days. $100m and transformed the way they do
that the amount by 23% business.
of time we spend Buyers are also able to
per vessel each spend more time working Whether a Buyer needs to streamline its
week has dropped from 9.2 hours to 7.09 on contracts and negotiating more favoura- purchasing operations or a Supplier wants
hours.” Crowley is able to track this to an ble terms. Using ShipServ, Crowley now has to reduce the cost of attracting or retaining
even higher level of detail: the time it now more accurate vendor performance data. customers, ShipServ is unique in helping
takes to convert a requisition to a purchase “We use this data when we conduct vendor businesses of all sizes to find each other
order has reduced from 33 minutes to 24.1 evaluations,” said O’Malley. “Our buyers can easily, connect cost effectively and trade
minutes – creating valuable minutes that now point to a vendor’s performance with efficiently.
add up over time. regard to response times and prices – this
definitely helps them negotiate discounts in As of May 2009, the ShipServ community
Being more productive has not only meant contracts. It’s been a big boon.” numbers over 130 buying organisations,
that the team is able to take on more 4,500 vessels and 27,000 suppliers. For
vessels (currently being added at a rate of It’s important to Crowley that more vessels more information visit www.shipserv.com
three per year), but it means that the team and vendors are progressively added to the
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