Korean shipyards are global leaders in their field, holding huge shipbuilding contracts, in particular for building vessels and offshore facilities to support the specialist activities of exploration, production and transportation of oil and gas at sea. It’s an industry worth $85Bn to Korea, and is a major pillar of the country’s economy.
However, the past few years have been challenging for local marine operators. The global financial crisis and recession triggered a decline in operating profits and a rise in debt levels; vulnerabilities that have now been exacerbated by a slowdown in global trade and an emerging competitive threat, especially from Chinese and other Eastern shipyards, whose own shipbuilding operations have begun to mature and grow in the sophistication and complexity of projects they are competing on.
As the market remains volatile, it’s crucial that Korean ship builders find cost effective ways to deliver ‘smart’ ships which provide vessel operators with the ability to deliver operational efficiencies across whole fleets. Given the constraints of the present macroeconomic context and environmental concerns, traditional technologies have only had incremental benefits to the Korean marine industry’s development. Korea ship builders need to adopt disruptive technologies to leap forward and continue in its leadership position in the high-value shipbuilding space.
At GE, we strongly believe the Industrial Internet, combining software analytics and physical assets, will be that disruption technology and the key to turbo-charge the Korean marine industry’s success. From design, manufacture, solution to service, the Korean marine sector is looking at this innovation in four key ways:
1. Accelerating design innovation
One of the tools used to design and enhance ship performance is GE’s Vessel Performance Analyzer (VesPA). It provides real-time comparisons of the performance of different electrical configurations, enabling GE to design and configure optimal power, propulsion and electrical solutions to match customers’ specific requirements. VesPA also estimates the annual operational expenditures incurred by the vessel design, so equipment selections can be made to minimize fuel consumption and achieve further savings.
This approach to ship design is vital for demonstrating that Korean shipyards can meet the exacting and evolving requirements of vessel operators in light of the changing market conditions.
2. Enabling data-driven operational efficiency
Software such as GE’s predictive analytics tool, SeaStreamTM Insight, enables data-driven decision-making in fleet and operational planning, by collecting and making sense of the massive flow of data relating to the condition of individual components from multiple networks.
This data can be used to spot patterns that might indicate the need for alterations to duty cycles that could improve the efficiency of the fleet, therefore maximising revenues. Based on the data insights, it can also give early warnings when a component exhibits non-standard behaviour, triggering preventative maintenance and stopping the problem before it strikes. This ability to reduce downtime and maintenance costs is invaluable to all marine businesses. It is especially important for offshore vessel operators, where even a small reduction in non-productive time could have a big impact on profits.
Digital technologies can also help reduce fuel consumption, lowering the risk of potential restrictions on sea routes. For transport vessels, fuel costs account for 30-50% of total operational costs. Using digital technology can provide operators with the ability to predict weather conditions to inform optimum routes and propulsion levels, reducing fuel consumption.
3. Faster and Better Service
Currently, few vessel operators have access to sufficient qualified engineers to be able to deploy experts in every system aboard every vessel. Thanks to strong security systems and processes, we are able provide remote access to experts safely and quickly. Instead of taking up to three weeks to find and fly the right expert to a remote offshore platform to make repairs, someone can be available for remote troubleshooting much more rapidly, at a far lower cost. Crucially, the remote telemetry data can make it faster to resolve problems and support preventative maintenance techniques as I mentioned earlier.
4. Transforming shipyards into “brilliant factories”
Advanced manufacturing combines software and analytics, new production processes and materials, and new technologies to improve efficiency on the factory floor, including through better linkages and coordination with supply chains and distribution channels - at GE we call this the ‘Brilliant Factory.’
These technologies have the potential to transform every Korean shipyard. Yard equipment and software will talk to each other over the internet in real time, share information, and inform or make automated decisions that will help ensure world-class quality, whilst avoiding costly plant shutdowns. Supply chains, distribution networks, and servicing units are digitally connected, reducing cycle time and improving quality in the existing shipyards.
As unfavourable macroeconomic conditions and increasing environmental concerns continue to weigh down on the industry, it’s crucial that we build “greener” and “smarter” ships. GE has a 20 year history of being a partner to the Korean marine sector. Most recently, we’ve worked jointly with Hyundai Heavy Industries to develop world’s first gas turbine-powered 174,000 m3 LNG carrier, and have delivered our 100TH induction motor in conjunction with DSME.
The next step for us is to help Korean shipbuilders to achieve digital excellence, something we believe is set to become a powerful differentiator in the future marine sector. By working together we will continue to support Korea’s global leadership position and the vital importance that the industry has for the country’s economy.