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Jan Meyer speaking in Meyer Turku Oy symposium

City of Turku arranged a symposium around the newborn Meyer Turku Oy, company owned by Finnish government and Meyer Werft. In the symposium, the governmental owner represented the Minister Vapaavuori described the acquisition process in rather humoristic way which reflected the relief of the industry. Mr. Vapaavuori told stories about the very start of the process 2 years back into latest negotiations between the Meyer family and Finland. The stories were many times spiced with comments of the importance of the industry and Meyer Turku to Turku and Finnish maritime cluster. Basically the message was, that the current industrial owner is a perfect match as I speculated in the blog post of mine earlier as well.

Jan Meyer convinces continuance

The CEO of Meyer Turku Oy, Jan Meyer

The CEO of Meyer Turku Oy, Jan Meyer

Mr. Jan Meyer was very proud to be the CEO of the newborn Meyer Turku Oy and convinced that the acquisition is a big step for them and they intent to stay in Finland and continue to create innovative, high-quality vessels to the client base of their. Earlier Turku had basically leaned into Royal Caribbean group as nearly their only customer. Meanwhile Meyer Werft has 9 clients and the order books full until 2019. In Turku the intention is to built the biggest vessels, as well as technically special vessels and passenger vessels with ice-class.

Energy efficiency and Lean philosophy

The key element I picked from Mr. Meyer’s speech was to execute the integration of best practices from both shipyards in Turku, not only bringing methodology from Germany to Finland. Quite wise, I think.

Meyer Finland and Germany Process mix

Meyer Turku processes a mix of best practices

 

The Lean philosophy, which Meyer has learned from the automotive industry, mainly Toyota, is well driven into processes in Germany. There was no room for operational discussion in the symposium today but I would be surprised if the Lean philosophy would not be brought to life in Turku as well. Royal Caribbean appreciates the philosophy quite high as amongst other cruise ship builder FCR Finland has learned and started to implement the philosophy into processes where applicable. The philosophy is deeper than just a strategy and pile of books. It is more than just a word but when executed well, the shipyard may work as a factory, profitably building high quality vessels in competitive price. Like Meyer Werft in Papenburg!

Another key element was to find energy efficient ways to lower the vessels energy consumption, bringing innovations to both marine and hotel energy flows. Energy efficiency is important in order to save fuel but still be able to create astounding experiences to cruise customers like Oasis (and Allure) of the Seas did and Quantum of the Seas  will do.

 

Mikko Varjanne

Chief Operational Officer, M.sc Econ, Bachelor of Hotel, Restaurant and Tourism Management, In maritime industry since 1998

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EU funded Lynceus-project awakes discussion regarding wi-fi -positioning on board

It was yesterday, when Northern European journalists spotted an interesting EU-funded project, which everyone can check through the website of Lynceus-project. According to Lynceus-project itself, the aim of this project is to “develop a distributed wireless sensor network system that will enable the ship safety officer and team to monitor the location of each passenger for safe evacuation, to monitor in real time the status and spread of the emergency (flood, fire etc) and also provide the engineers with vital information for proper maintenance and optimization of the ship operation” procedures. Source: http://www.lynceus-project.eu/

We did a positioning project back in 2012 with a Finnish technical partner, an indoor positioning specialist company Walkbase, whose system is running for example in airport environments in Finland. In their technology, the wi-fi network is utilized to determine where a mobile phone connected to this network is located with very impressive accuracy. There are naturally several applications, which can be then utilized with this system but the general logic of our project, called OPAL at the time, was not to recognize people but leave them private. This was mainly because the positioning system for vessels was designed to serve the mobile phone user by telling the user where he or she is located, not for the ship operator, where a certain individual is located. For the ship owner however, big data of crowd movements could be naturally used in several ways, such as planning crowd management both in business and safety, marketing to crowd onboard over the application or any other business intelligence purpose imagination could bring. So, our project was a bit similar but then again different. This project of ours was funded by us and Walkbase and outcome is therefore not public.

Onboard Passenger Assistand and Locator

Onboard Passenger Assistand and Locator

Criticism and proponents

The proponents, who see this idea of tagged human positioning as a vital and positive way of improving safety of lives at sea, flag the idea of control leaning into technical solution. The idea of positioning people is far from new, even on board cruise and passenger vessels. Quite the contrary, there are solutions at least tested, where children were tagged and positioned on board but as far as I know, the system has not been running any longer, as it has high risk of technical failure and lacks accuracy. I have to agree on this, safety of children should not rely on technical gadgets over parenthood and professional nursery services. Let’s not jump too far from the topic though. Lynceus-project has gotten its start from the Costa Concordia shipwreck and actually the need comes from the chaotic evacuation process, where many people were lost in the sea, two perhaps forever. This unfortunate average can teach a lesson, as bad things usually do. The technical study, which Lynceus-project is aiming, would like to create something technically and economically feasible, which would tell the ship’s safety organization the location of every passenger and when tagged with a wristband, even tell their identity linked to basic body  functions, such as blood pressure, pulse and body heat. This sounds interesting, technically. Criticism comes from several directions. One is privacy, second is technical accuracy and up-time and third is more related to good old seamanship. Let’s think about this, not just criticizing but thinking about the concept.

Privacy of people onboard

IMO’s ISPS –code requires some enhancements to older and comprehensive SOLAS. It  among many other things, requires the ship to know who is on board. Well, this is obviously purely safety and security issue and there is no harm in it. However, when tagging people and knowing exactly where they stand or go, the privacy issues jump into game. Some people say, that their location can be followed in the name of safety and security. However, most of the people do not like mobile applications or Internet service providers to know their position even when they are not recognized as individuals but not being recognized, only followed, does not even do the difference to at least data security professionals. It is hard to believe that great masses of people would allow them to be tagged with wristbands, even when it is safety issue. I have to say, I would rather pass the wristband.  When not taking the privacy into consideration, it seems interesting and I look forward to seeing the methodology the Lynceus-team is coming up with, as I know the challenges of onboard positioning, which I will sum up in the end.

Technical accuracy of the positioning system

A cruise ship is a challenging environment for the radio wave based positioning. The ship structure is complex, the signal propagation has many obstacles, as well as the signal may propagate freely through open areas and the decks make the positioning 3-dimensional. It is not said how the positioning is going to be executed. Whatever the technical solution is, the power supply and 100% uptime is in critical role when talking about positioning people in case of emergency. Usually, when the situation is so critical, that the ship shall be evacuated, unstable power supply and black-outs occur. Once again, it is very interesting to see how Lynceus-project members will ensure the real 100% undisturbed power supply for the positioning system. In our OPAL –project, with the technical partner’s technology over wi-fi network, we were able to determine the location of the mobile phone using the network with rather accurate level at least for the purpose the OPAL –project had designed, which was more business driven than the current Lynceus –project. Our testing results are basically rather accurate and this system could actually be used on board in the purpose we had designed it to.  This picture describes a fire zone, which was covered with wi-fi network by using three wi-fi hot-spots ie routers. Note that this technology does not do triangulation, before leaving comments about that.

Accuracy of OPAL

Accuracy of OPAL in cabin area using wi-fi positioning on board

Old-school evacuation methods and the actual need to renew those

Last criticism I read and which also popped out when discussing this idea over social media with my seaman friends, including captains and safety officers brought into discussion, which I personally agree totally, is the need of this kind of technical solution to support evacuation. The traditional method, in case of emergency is to lean on a safety and security plan of the vessel. The procedures are clearly designed and described in the safety manual, which is communicated to educated crew members and officers. For a person not trained for this kind of events the ship is not just a big entity filled with people, who act randomly. This is not the case, at least it should not be and in most cases it is not like it. Without describing my own experience and training, I can tell, that people on board vessels are in the hands of skilled professionals, who has training, who practice on monthly basis and who know what to do if the worst case scenario is on. The safety organization is managed by the bridge management team consisting professional in charge, distributing orders according to plan, which is exercised on monthly basis by everyone in the crew. Now corner is left unchecked and no locker is left opened, beds and balconies are controlled and made sure no one is left behind. At least this is how I’ve learned it should be done. Lucky me, the procedures have only been tested on standby which have not lead into evacuation. The only technical devices used these days are tested and controlled walkie-talkies . Personally, I think it is enough. Good old seamanship of the crew and officers is the best safety and security asset.

Positioning of people on board technically

I do not want to be just another critic only. There might be useful solutions coming out of this interesting project. I have been involved in a project we called OPAL, Onboard Passenger Assistant and Locator. The idea was to exclude safety and security functions and focus on customer service, bringing something new on board for the customers to enjoy and the ship operator to use when analyzing the big data of passenger movements without identifying individuals. This however, could be used when planning not only marketing and ship lay-outs but also to support safety plan rehearsals without being in major role in safety and security.

How our onboard positioning project would have been connected to safety?

Although safety and security operations were excluded from this visionary project, we wanted to literally play with the idea. What if the technology will leap fast into environment, where for example enhanced reality goggles will be economically and technically feasible to purchase for the ships safety and security team? What if they could simulate in enhanced reality a digital fire onboard and see digitally generate passengers, flames, flow of fire and other digitally created crisis situations and use the positioning in training? Wouldn’t  it be not just cool but also useful? Well, I think yes it would be cool. For example a Finnish Premium member of SHIPSU,  Markku Kauriala Ltd Fire Engineering and Fire Safety Design can and has simulated fire on board with their novel software. These kind of simulations brought together with on board positioning system, the gaming industry and enhanced reality technology could actually create a great training environment to ship’s safety organization without being critical factor in the actual operations. The future may not be exactly like this but we’ll wait and see.

Do you have any idea’s how to utilize on board positioning systems? Let me know or comment below. In case of requests regarding our OPAL –project from year 2011, I will be happy to discuss more and connect you with the right persons behind the technology here in Finland.

Mikko Varjanne

Chief Operational Officer, M.sc Econ, Bachelor of Hotel, Restaurant and Tourism Management, In maritime industry since 1998

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Finnish Government announces negotiations with Meyer Werft

It was reported in the Finnish new yesterday 8th May 2014 that Finnish government is negotiating with Meyer Werft regarding purchase of Turku Shipyard. Finnish government had reported a frame decision of being interested in participating in acquisition if an industrial partner can be found. STX group, the owner of STX Europe, including STX France and STX Finland (being Turku shipyard after shut down of Rauma shipyard) had announced already last year, that they will sell European shipyard by the end of June 2014. No information can be found, whether the European shipyard should be sold as one entity or individually.

Speculation naturally started at once and I’d like to speculate too.

Good news for the industry in Finland and ship ownersCranes

One thing is for sure, this is good news. Finnish network of shipbuilders, which have had to live under very stressful environment for the la
st 4 years, got the best news so far when this rumor has even some fact behind it. When governmental decision makers make such announcement, there cannot be just political speculation involved despite of upcoming election in Finland. Meyer Werft seems to be more cautious in their comments but that, in my opinion is rather usual in case of acquisitions because there are always many things that this kind of thing has effect on. Negotiable contracts not being the minor ones.

 

Benefits of possible Meyer Werft of Turku

Turku shipyard has suffered from several problems during last years. Financial performance of projects has been poor, lack of large scale projects after Allure of the Seas and being unable to get the balance sheet in the condition the guarantees require, as written earlier when Turku lost the battle against STX France. Today RCCL ordered the optional second vessel from STX France, which was part of the contract made between the parties in December 2012.

When Finnish government together with Meyer Werft would be involved in the shipyard as an owner, the guarantees should be more easily arranged. To put is simple: the financial muscles would be heavy weight. Commercial output of Meyer Werft is good and most probably due to their system of operational excellence ensuring profitable and high quality production in industrial form.  However, Finnish governmental ownership will not be based on cash injection but efficient and profitable construction of vessels. That is where Meyer Werft comes into the game as “primus motor”, the shipyard that really knows their business. Meyer has successfully implemented the Lean method into shipbuilding and their major clients love the outcome. The quality of the product has to be great everywhere but when build in Meyer Wert, the process is top-of-the-line and the client can really rely on the outcome whenever asked. What are the main aspects in successful industrial shipbuilding, which Meyer Werft, as the top shipbuilder is able to meet and keep the clients happy? It should be kept in mind that Meyer has succeeded to win the trust of all major cruise ship owners in the world. This is not typical but usually the yards serve 1-2 major clients and additionally some smaller ship owners.

Goals and challenges in industrial shipbuilding

  1. Risk – The industrial methodology should mitigate the operative risk of the production through transparent portfolio and supply chain management.
  2. Schedule – The target is to achieve zero deviation to schedule
  3. Quality – In the holistic perspective, the execution and the delivery of the product is high on quality
  4. Efficieny – The Lean systems (flow/takt/pull) recognized in automotive industry, bring efficiencies in several levels. Procurement system and transparency are very different from the traditional shipbuilding.
  5. Cost – The well-defined system reduces cost without unfair pressure, stress and pain. This is proven worldwide in different industries, starting from Toyota automotive production but also for example in healthcare.
  6. Safety – The system which is well planned, operations controlled and transparent, creates a safe environment not only for the end-client as a safe product but for the workforce who builds the ship. What is more valuable than health? Nothing.

Joint-ventureThese goals and challenges are common to many industries but especially shipbuilding, where the amount of workforce is significant and the product is large and complex. The Lean system, which Meyer Werft has implemented successfully is however much more.

Geographical benefit

Some false speculation has already been written and referred to professionals of the industry. The basic misunderstanding is related to length of the dock-pool. Some say, that Meyer werft would need Turku shipyard because of the length of the dock and some on the other hand say, that they would build only the steel blocks in Turku and then move the hull to Germany to be equipped in the covered dock. Both wrong. Well, at least in my opinion those are not the case. First of all, Meyer has more dock capacity than Turku but the location of the yard is the problem. They cannot float out from the yard to the sea more than 200 BRT vessels and this due to the channel connecting the yard itself to the sea. Second of all, it is not according to Lean system to move such big entity as the hull from a yard to another. Turku shipyard on the other hand is located close to Neste oil-refinery and therefore there is a short distance (apprx. a mile) to deep-water route to the sea.

 

Geographical challenge

If the location of the yard is the challenge to Meyer, the northern position of Turku and uncovered dock is the challenge in Turku. However, if a shipyard is purchased, the new committed owner should cover the yard the soonest. Mein Schiff 3 should be the last or the second last vessel to be built outside in the Finnish winter. There is no reason, why these ships should be built in rain, wind and snow.

Meyer

Source: Google Maps

Potential

Summa summarum, the joint venture between Finnish government, Meyer werft and Finnish maritime cluster could be very successful. There is a lot of potential and ships to build and contracts to be signed even quite fast. TUI cruises may want another two ships if there is a committed owner with stable balance sheet. A new cruise line may be established according to rumors and that operator has announced the funds have been collected and they have the will to build the biggest cruise ship in the world. Fincantieri has order book quite full as well as French shipyard. Meyer werft in Germany cannot build such vessel but the joint venture could do it Turku. Those three together, create apprx. 3 Billion EUR worth of potential.

As far as I know, there is no reason why this joint venture should not happen. It is a multiple win –situation. There are so many winners, that I do not even speculate it before this is real and a fact. I hope it will become reality!

 

Mikko Varjanne

Chief Operational Officer, M.sc Econ, Bachelor of Hotel, Restaurant and Tourism Management, In maritime industry since 1998

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B2B is doing what B2C started a long time ago

People are used to using web-based solutions in their private life over the years since Internet and web-shops have matured. It is pretty safe to say that you are one of the persons who are already used to using different online tools in your private life. The reason for saying this so confidently is because it applies to most of the people.

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Mikko Varjanne

Chief Operational Officer, M.sc Econ, Bachelor of Hotel, Restaurant and Tourism Management, In maritime industry since 1998

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Langh Ship has invented a functional closed loop scrubber

Because of the  upcoming new regulations regarding sulphur levels in exhaust gases, the ship owners have been struggling to find cost-efficient solutions to meet those environmental regulations. Those regulations state, that in sulphur emission control area (SECA) allowed emissions will be tightened such that the sulphur limit for fuel will drop to 0.1% (from 1.0%) at the start of 2015. Last week an interesting news was released, stating that Finnish ship owner Langh Ship has invented a functional closed loop scrubber! Langh ship announcement reveals the facts and figures by clicking this link.

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Mikko Varjanne

Chief Operational Officer, M.sc Econ, Bachelor of Hotel, Restaurant and Tourism Management, In maritime industry since 1998

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FCR Finland donated children’s equipment

A Finnish company specialized in cruise and passenger vessels refurbishment works announced today, that they donated children’s equipment to the federation of mother and child homes and shelters in Turku. The company,  Oy FCR Finland Ltd a member of SHIPSU provider network did turnkey refurbishment projects on the Royal Caribbean Cruise Lines vessel Independence of the Seas in April 2013 when she was docked in Germany.

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Mikko Varjanne

Chief Operational Officer, M.sc Econ, Bachelor of Hotel, Restaurant and Tourism Management, In maritime industry since 1998

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STX France has interest towards Finnish maritime contractors

It seems, that STX France is having real interest towards the Finnish maritime contractors, who have done works in STX Finland in previous Oasis-class projects. According to news today, STX France may be contracting Finnish maritime subcontractors in RCI’s third Oasis –class vessel project, which we wrote a lot late 2012. The news talked about decent amount of orders, summing up to 100+ million Euros. This is absolutely great news for Finnish shipbuilding cluster, who have excellent references in Oasis of the Seas and Allure of the Seas projects.

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Mikko Varjanne

Chief Operational Officer, M.sc Econ, Bachelor of Hotel, Restaurant and Tourism Management, In maritime industry since 1998

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Shipyard for sale, Finnish shipyards looking for a buyer

I took advantage of the high quality blog posts and professional journals gathering the news of Finnish shipyards now being for sale and do not write anything about the things around it. To summarize: STX Groups problems have escalated into level, which forces the current decision makers to sell parts of the group, including STX Europe, which basically consist of STX Finland and STX France. There is a strategic interest for French government to buy the majority of their navy service provider but that is not the case in Finland. At least not in the Turku shipyard, which is known more of the fine cruise vessels. Rauma  shipyard however, is strategically important for Finnish navy. Rauma is known for special vessels and it has been suffering of the unclear political decision making regarding sulphur regulations, which has frozen the newbuilding of pax vessels in certain areas in the world. Well, problems in financial environment have a lot to do in that sector as well.

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Mikko Varjanne

Chief Operational Officer, M.sc Econ, Bachelor of Hotel, Restaurant and Tourism Management, In maritime industry since 1998

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Ship maintenance, value for the money – M/S Isabella is sold to Tallink Group

M/S Isabella was sold and the news came today. The vessel is quite close to SHIPSU and the members in the service at this time. We announced earlier this year in SHIPSU open requests  to do maintenance work to M/S  Isabella, vessel owned by Viking Line who just replaced her with Viking Grace, this modern LNG powered cruiserferry. This time the open request of refurbishment work was limited to upholstery works only. Reason for this limited refurbishment was obvious; the ship was in great shape. I discussed with Viking Line representative about the future of the ship and it was supposed to start operating between Helsinki, Finland and Tallinn, Estonia. The route is very popular because of the close location of these two ports and a lot of people travelling on that route in both business and pleasure. According to the new owner, the vessel will be placed to route between Riga, Latvia and Stockholm, Sweden.

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Mikko Varjanne

Chief Operational Officer, M.sc Econ, Bachelor of Hotel, Restaurant and Tourism Management, In maritime industry since 1998

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Roxtec brings in new solutions to shipbuilding needs

SHIPSU met the Roxtec sales and marketing team in Cruise Shipping Miami last week. I interviewed Mr. Jouko Karilahti about their new products and the message they want to deliver to the industry.

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Mikko Varjanne

Chief Operational Officer, M.sc Econ, Bachelor of Hotel, Restaurant and Tourism Management, In maritime industry since 1998

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