Bringing the industrial internet to the marine industry and

Copyright 2013 ESRG 1

Bringing the industrial internet to the marine

industry and ships into the cloud

Rob Bradenham Ken Krooner

October 2013

Copyright October 2013 ESRG Technology Group

Copyright

Table o

Execut

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Executive Summary The industrial internet concept, connecting machines and using automated data analytics along with domain expertise to optimize operations and maintenance, has already created significant value in many industries like power generation and commercial aviation and is now becoming a reality for the marine industry. While the opportunity across industries will exceed 10 trillion dollars per year in the next 15 years, the opportunity for asset owners, operators and managers to reduce costs, improve fuel efficiency, and increase uptime and reliability is approximately 20 billion dollars today and will exceed 50 billion dollars by 2030. Potential annual value creation for individual ships could be as high as $1M or greater when considering potential fuel savings, optimizing maintenance, decreasing downtime and increasing utilization1. This opportunity exists across sectors, ranging

from super‐tankers to inland tugboats and offshore platforms and takes into account savings across fuel and maintenance, increases in uptime and productivity and decreases in risk associated with non‐compliance, specifically with regards to environmental regulations. Figure 0 lays out major value creation levers for a large cargo vessel (e.g., tanker, container, roll‐on roll‐off, etc). While newer vessels will have the greatest potential value creation due to existing sensors and technology infrastructure, there are likely between 20,000 and 30,000 vessels in the global fleet today which likely create an attractive ROI. These vessels already have sufficient sensors and robust enough technology infrastructure such that the required investment level is minimal and the value gained from the existing onboard data will enable substantial improvement in how the business is operated. While there is tremendous value at stake, it will also take individual owners and operators time to fully capture the value. In the mean‐time, before performance analytics are fully incorporated into all business processes, even

Figure 0: Value creation levers and potential value creation using data analytics

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ure the valuee’s competitioto transformnew technof equipmentanalytics, otheir hum

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planners ta clear reexample, event (fuelined out propagateduring dmaintenasurprises maintenavalue crenew” conconsumpt

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technologeasier foapplicatioinformatioinvestmenpayback tindustrial electronicface a difships witOwners oincreasedintegratiowith the plikely siginvestmenclear cut fexisting te

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gy infrastrucr data to bons in order toon. Onboardnt could betimes and theinternet conc engines anferent requirth built in sof older, exis investmeon, networkipotential retugnificantly nt for higher for older, lowechnology inf

n an analysships in the g0,000 ships have some ted would be nt required toard data. Th3,000‐7,000 incorporatingcture in ion. Based ocross all marhas the potenn USD of valmarine fleet ssels in the for applyinn the marineollars in the

computer cations, and s

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ture. This e consumedo convert it ind new builds, very low, erefore fast adcept. Older

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sis of the alobal fleet tosailing the

echnology infable to easo start takinghis number iper year, witg a solid the shipy

on the breadtrine sectors, ntial to createue per year and even mfuture. Weg the induse industry winext five ye

hardwareservices.

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will make d by analyticnto actionabl, the requireenabling fasdoption of thships, withousorization, wint than newecapture valueust weigh thensors, datmmunicationhe benefits withe require, it will be lesssels with littl

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match betweessfully operpment, and tonboard crewstries, this samcost of havingoad to an ash less than hato help a shem.

dition to geoplexity, exec

in fuel and vailability oue delivered y chain and laspects of ththe value cror technology

erating all f the most repotential v

maintenance industries wnd easier n maintenanntenance froelp to reduceork, which arly dispersedstance, instearts to a remnicians to d monitoringter predict pobe resolved ost effective,

stry also opewhich inc

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often invThis is a cost of ddowntimeincentive completeunderstoovessel enexpensiveperiod in to have performaonboard ocan be usas well aprocess tdefined m

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Figure 4:

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volves puttinsignificant e

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rial internetwill enable a paradigm to

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The maiinternet stakeholdcourse, beon maintwill be abmaintenawith Berninvolved data, desable to astime, withmore conbased tecafter creathrough atechnical Classificatindustry safe will bdoing asswill be aand effectheir afteJaime TetCaterpillafuture as,into a poperatorsoperationincludes optimizingconsumptand evenowner eremote en

This sharione singachieve investmenmust woinvestmenthe entire

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ntenance bewill be

ders. Ownere able to reduenance. Shile to reduce tnce. Guentnhard Schultein monitoringcribed the bssess the equh qualified danstructive dichnical superating the visia long term superintendetion society sby ensuring be able to reessments eleble to delivectively, and rermarket custrault, Directr Marine Po, “Selling soluproactive mos and pnal challenges

extending g vessel tion, reducingtually and penvironment ngaged opera

ng of savingsle stakeholda necessa

nt. In this cork togethent costs, as we value chain

enefits of tcaptured

rs and chartuce the amoup‐managemetheir costs in ter Sell, a Ce Ship‐managg and analyzbenefits as “Nuipment perfata, I am alsoiscussions wrintendent. ibility, I was sensor probent and get surveyors whships are se

educe their suectronically. er service moreduce their stomers. Asor of Producower Systemutions movesode, partnerpredictably s and prevenmaintenanc

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ators.”12

s creates a sitder may notary businesase, multipler, sharing well as the remore efficien

the industriaby multiplterers will, ount they spenent companiedelivering th

Chief Engineegement who zing shipboarNot only am formance oveo able to havwith the landFor exampleable to wor

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11

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more fuesooner arefrigeratspeed. Thvessels tdisplacemof power change. onboard oand enginfuel consuother situmaintain This transby shore‐informatioand betteway, themanage consumptimplicatio

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t 2013 ESRG

el to arrive and burning ed containerhis same conhat carry ca

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nt value thaental perspecnsportation sof the total, Marine, with fuel oil, is avarious internizations to e types of fuessions. In addommercial shreasing scrutier is exchangoduction of try continuesnd dischargeast and oily wnd automatie and transplders.

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12

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offshore analyze afrom oRegulatormove to from the separatorbe transmcomplianc

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t 2013 ESRG

industries lieand act uponoperations ry organizatielectronic reequipment, wr or an emissmitted ashorece without an

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13

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Figure 5:

t 2013 ESRG

alytics and ue information. This integrnd Chief Engieet manager,er to have traformance of tion, powerd environmen

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for transfother syscosts to equipmenmeter, toother indindustry, standardsjust startidifferent piece of equipmenModbus, enabling transitionto enablopen stanstandard maintenaClassificatequipmenhierarchiesharing consumerowners. approachtheir ownthus limitbe achievmoved thpredictiondynamics,standardsmarket, athan if thethe broad

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t 2013 ESRG

ferring data stems. This bring toget

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15

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In additiointo actioqualificatibased inindustriesvariety ofessentiallybeing uselanding; aat a vardisplacemacceleratietc. In tsimple toflights. Iqualified are beingvessels.

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t 2013 ESRG

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16

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GeneratoContainerfluctuatiocontainervarious pmany concombinatrequired systems tgeneratorpractice, differentlyresults ingeneratornumber ogeneratorBy betteperformaoperatorsoptimal cthat point

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Figure 6:given ele

t 2013 ESRG

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17

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automate

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t 2013 ESRG

ed analytics in

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kill set is veryy Chief Eendents. Autated into a soto bridge thees and the value capturtrial internet.

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18

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ConcluThe indopportunpotential annually. currently industrial grow signship is hthese ben

The bensignificantmaintenaassurancelargest dr

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t 2013 ESRG

usions ustrial inteity to the mto create ove While only positioned internet be

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About the authors Rob Bradenham

Rob Bradenham is the General Manager of ESRG, a leader in marine data analytics software. ESRG’s flagship product, OstiaEdge, can help owners and operators reduce fuel consumption, optimize maintenance costs, reduce downtime and ensure regulatory compliance. Mr. Bradenham has spent most of his professional career in maintenance and operations of industrial equipment, both as an Associate Partner with McKinsey & Co, the global management consultancy, where he served a wide‐range of large industrial organizations on their operations and maintenance, and as officer in the US Navy, where he managed maintenance and operations on surface ships. Mr. Bradenham has a Bachelor’s Degree in Finance and a Master of Business Administration from the University of Virginia.

Ken Krooner

Ken Krooner, President ESRG Solutions, LLC based in Virginia Beach, VA, is a graduate of Old Dominion University (BS Engineering Technology). He has over twenty years of experience in operations, planning, and program management in the marine engineering field. He has over 15 years of experience with designing, developing, and implementing condition based maintenance (CBM) and condition based operations (CBO) strategies within the Navy and commercial industry, using the Shipboard Level and Enterprise level Performance and condition monitoring technologies.

About ESRG Since 2000, ESRG has provided leading edge data analytics and remote monitoring technology to support commercial and defense marine engineering operations. Machinery owners and operators turn to ESRG for expertise in data integration, automated analytics, reporting and dashboards. ESRG’s OstiaEdge®, is a Platform as a Service, which combines onboard data acquisition, qualification and analysis, shore based analytics and workflow management as well as business intelligence features. OstiaEdge, which is based on Reliability Centered Maintenance (RCM) principles, enables users to implement Condition‐Based Maintenance (CBM) and Condition‐Based Operations (CBO) to increase reliability, achieve greater asset productivity, reduce fuel and energy consumption and decrease operating costs.

Copyright

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Bringing the industrial internet to the marine industry and

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