A Norwegian shipping giant is embarking on a digital transformation journey to improve operation efficiency, achieve higher sustainability, enable new business models, and enter new markets.
With 130 vessels and 9,500 employees in 29 countries, the shipping giant is one of the largest transportation players in the world. To enable a new digital era, the vessel company partnered with Cognizant. It all started in March 2019 with a comprehensive 10-week assessment of the company’s future digital needs. The company lacked internal resources within digital transformation and needed a strategic and experienced sparring partner to consult, plan, and execute the ambitious goals.
Erik Larsen, Country manager for Cognizant Norway, explains that it was immensely important to have a strategy assessment with leaders and specialists from both the vessel company and Cognizant.
“It’s essential to create a common understanding of the current situation and the road ahead when starting digitalization projects. Decisions made at an early stage will influence the business and its ability to create value for a long period of time.”
A Holistic Approach Necessary
Due to old data systems and the complexity of the value chain, a holistic approach was needed.
“In the existing system, data was residing in data warehouses, mostly in silos with manual processes,” says Erik Larsen. “This data was mainly utilized for reporting purposes. It was challenging, nearly impossible, to extract valuable insights from this data.”
During post strategy assessment, it became clear that the shipping company needed a solid data platform to provide foresight and insight to metrics such as fuel efficiency, vessel operations expenses, and asset utilization as well as data-driven optimizations across the vessels and the value chain.
“One of the key objectives was to implement a modern data platform to support intelligent and automated data driven processes to serve the growing and ever more complex needs of its customers,” says Erik Larsen. “The data platform will be steered by advanced analytics and machine learning models.”
A Digital Foundation
The transportation company has now implemented a digital foundation with the help of Cognizant – a data lake using Microsoft Azure technologies. Enormous amounts of data are stored in raw format and will be used to reduce risks and optimize operations.
It was important to the company that one single platform handles all the data.
“The data lake gathers and structures data from multiple sources, such as ERP systems, IoT devices and machines. It’s the digital foundation that will allow the company to enter a new digital era, where processes and operations are optimized, and data-driven decisions can be made in real time.
Strong Team Efforts
A strong team of 14 specialists from Cognizant has built and implemented the data lake, according to Erik Larsen.
“We are proud of the time-to-market in this project. We’ve had skilled workers both on land and offshore to implement the data lake in the best and fastest manner possible.”
Cognizant used the agile scrum methodology for the implementation of the data lake – a development process that’s based on lean and agile values and principles. The framework allows for more effective collaborations among teams working on complex projects.
Data-Driven Operations for 2020
After the successful launch of the data lake in 2019, Cognizant is now helping the company to gain insights and operational improvements from the data lake.
“With a solid digital foundation in place, we are now starting to build automation, AI and machine learning capabilities,” says Erik Larsen. “Without a doubt this will enhance their competitiveness – data-driven decision will be made in real-time which is a big leap in the right direction.”
Practice leader for Cognizant‘s Artificial intelligence and Analytics practice in the Nordics, Anoop Sharma, explains that the data lake combined with sophisticated AI and analytics capabilities will take the shipping company from a reactive approach to a proactive one.
Big Savings Ahead
The main cost in the shipping industry is bunker cost, in other words fuel. Fuel consumption can be radically reduced with AI, analytics and machine learning capabilities.
“Let’s say a cargo ship travels from A to B with an average speed of 30 nautical miles. When arriving at the port, the captain is informed that the port isn’t ready – the ship must wait for two hours before entering,” says Anoop Sharma. “During the wait, the vessel burns more fuel. If the shipping company had a more sophisticated data platform with intelligence and predictive features, the captain would be informed that it wasn’t necessary to travel at 30 nautical miles. The speed can be reduced, which in addition to save fuel, also reduces the wear and tear of the engines.”
According to Anoop Sharma, the savings can be enormous.
“In one day, a vessel can save up to 20,000–30,000 dollars by optimizing fuel consumption and route planning. If you take maintenance and other risk factors into the consideration, the benefits will be even greater.”
“We are proud of being part of this very company’s digital transformation journey. The data lake with its sophisticated capabilities, will enable them to improve operation efficiency, achieve higher sustainability, enable new business models and enter new markets,” Erik Larsen summarizes the partnership.