Guido Försterling, CEO of the German Dry Docks Group (GDD), on digitisation, industry 4.0 and the future of German repair yards in times of change:
What effect does digitisation and Industry 4.0 have on the repair of ships and thus on repair yards in Germany? Opportunity in times of crisis or an additional threat? Change or standstill?
The Penguin Principle shows how changes in a crisis can lead to success. “The Penguin Principle” is a book about Penguin Fred and his colony. Fred and his colony live on an iceberg. One day when Fred is watching the ocean, he sees that the iceberg is slowly beginning to melt. Fred decides to act and calls on his comrades to think about how to change the situation before the iceberg is completely melted. While some then panic and jump into the water, some others are eager to find a solution to the problem – while most of them are convinced that the iceberg is not melting. The next winter is sure to come.
The fable of Penguin Fred is symbolic of the repair business – our market, i.e. the iceberg, is literally shrinking. Revenue per docking, i.e. per repair, has almost halved in recent years. A turnaround is not expected – ship repair has become a cut-throat market. The repair business is accordingly price-sensitive. Shipyards in low-wage countries have a clear advantage from the outset. This raises the question of how we need to change to survive in the market as a repair yard in the medium term. What added value can we offer? How should we organise our work in order to survive in competition with shipyards in Asia or Eastern Europe? Is ship repair in Germany still viable?
We envision bringing the shipyard to the ship
The answer to our melting iceberg is the German Dry Docks 4.0 project: we see an opportunity in digitisation and Industry 4.0 and therefore a future. GDD 4.0 is a project set to last at least three years with the goal of being transparent and mobile in organising repairs based on an interactive client platform. The project head should be able to undertake repairs on demand and across locations so as to organise the work around the schedule of a ship. Our vision is that the ship does not come to the shipyard but the shipyard goes to the ship: Repair made in Germany – organised globally.
The key to success lies in the availability, exchange and processing of relevant data and information for the repair. This involves issues such as Big Data, but also standards and norms, binding and transparent processes with clear guidelines and control mechanisms. How else are we to supply a cross-location service with defined qualitative and quantitative standards at a fixed price? Accordingly, GDD 4.0 not only creates euphoria and enthusiasm, but also causes people to fear the loss of freedom as well as to worry about their own jobs.
To understand what demands our customers will place on tomorrow’s maintenance services, we invited ship owners, managers and line services to accompany us – the response was very positive.
We successfully achieved the first milestone on 1 November, 2016, which was to activate a new IT infrastructure and successfully transfer our ERP to AMS 7.0. The next major step is planned for June 2017. The modelling and programming of future target processes in AMS 7.0 and a specially tailored project management software is to be completed by then. Full implementation is still a long way off and above all a great deal of persuasion will be needed. The real challenge is not in the hardware or the programming of suitable software, but in the change to the company as such.
Digitisation is a tool that must be exploited
Shipyard 4.0 is primarily a change to the working world, with new job descriptions, work processes – and it ultimately questions the very purpose of the company. In our view, digitisation is an opportunity, although it means that we must change. It is crucial that we do not allow ourselves to be blindly led by digitisation or that we look at digitisation as the solution to all our problems, but understand that digitisation is a tool which should be exploited. Digitisation has helped us find our way into the future. The German Dry Docks Group stands for Repair made in Germany 4.0. Our employees are proud to deliver German quality – and that should be preserved. The ways and means by which we provide our services in the medium term will, however, be different to today’s model.
Thus in the medium term we see the German Dry Docks Group in the role of a global repair service provider which organises worldwide work based on interactive consumer platforms with the help of a partner network – that’s Repair made in Germany 4.0.