“Maritime procurement can be a real mess,” states Klaus Nyborg, a veteran of the shipping industry and, amongst other high-profile roles, non-executive chairman of Singapore-headquartered Moscord.
“There is little standardisation of processes, mostly spot ordering instead of long-term strategic decision making, a lack of transparency, a huge lack of efficiency, minimum added value in terms of spend analysis and, frustratingly, far too many mis-deliveries; of the wrong products, at the wrong place, at the wrong price and quality.”
“Think of that ingrained culture with its myriad of disadvantages, and then think about consumer purchases through, for example, Amazon. An experience where you get what you want, when you expect it, at a predetermined price, full stop. Complete fulfilment, in more ways than one,” Nyborg continues.
“Now,” he says, leaning in to stress the point, “why can’t we do the same for shipowners, or for the oil and gas service industry? Provide simple, transparent, cost effective procurement, with last mile delivery they can rely on? An Amazon for the oceans?”
It quickly becomes transparent that Nyborg believes we can. The ‘we’ in this case is Moscord.
Moscord.com launched in 2016 to provide a direct digital trading platform for the maritime industry, allowing procurement professionals to buy ship supply products directly from suppliers. It has quickly grown to offer a vast portfolio of over 200,000 quality products (ranging from consumables, to provisions, spare parts, safety equipment, electronics, tools and PPE) at set contracted prices.
The lean, direct and efficient nature of the channel allows the team to pare back the procurement process – stripping away superfluous layers, administration and unnecessary interactions – and thus knock down prices (with purchases typically coming in at 20% less than traditional ship supply channels).
It is, to all intents and purposes, Amazon… but with added value for management and business bottom lines everywhere.
“In many ways Moscord.com offers a modern ‘consumer’ experience to the industry,” Nyborg notes. “It empowers the purchaser – for example a crewmember – giving them all the details (including images, specifications and product codes etc) they need to make the right selection, at the right price, with the right quality for their requirements. In other words, simple, straightforward, satisfying. But there’s far more to it than that.”
Nyborg is keen to stress the “c-level” perspective. And to be fair, he understands that more than most.
The Danish native is a recognised industry leader in his homeland. The current Board Chairman of dry cargo and tanker company D/S Norden (he was previously acting CEO), Nyborg is also Vice Chairman of DFDS, Chairman of United Shipping and Trading, served as CEO of Pacific Basin, and was a former CFO of both Maersk Logistics and TORM.
And one of those concerns is standardisation – or rather the lack of it in procurement.
At present, he stresses, individual ships and crew are in the position of ordering their own supplies, meaning that the number of lines purchased across a fleet can often run into the many tens, sometimes hundreds, of thousands.
This leads to a random approach with regard to product choice and quality, poor value for money (with little economy of scale) and a complete lack of management understanding and predictability. Effectively planning and fulfilling a cohesive procurement strategy in this scenario can be difficult, if not impossible.
“Feedback from the industry suggests that around 20% of orders placed through traditional channels result in mis-deliveries,” Nyborg reveals.
“That can be frustrating, obviously, but it can also be disruptive to operations, and very expensive. For example, if the wrong spare part is delivered, or isn’t delivered at all as a vessel has deviated from schedule. That kind of service wouldn’t be acceptable to consumers and shouldn’t be to shipowners either. They need, we all need, reliable last mile delivery, every time, everywhere. In other words, standardised excellence,” he continues.
In terms of the standardisation challenge relating to ordering itself, Nyborg has one word: “data”.
“Shipowners have a mass of procurement data, but you can only extract value from that when it’s effectively utilised – an area where Moscord has world class competence.”
He explains that Moscord can manage, clean and learn from an owner’s procurement data to create standardised catalogues for entire organisations, with fewer, approved lines allowing customers to buy with confidence (and minimising mis-deliveries).
Owners suddenly understand the totality of what they buy and where to focus energy to save money, in addition to unlocking real economies of scale with approved, contracted suppliers.
Armed with new insight companies can switch from spot purchasing to strategic procurement, identifying trends, analysing spend, increasing predictability and – with a streamlined digital process and new opportunities for automation – accessing huge organisational efficiencies.
“It’s not just about cost, it’s about control,” Nyborg stresses. “Something that is business critical for any executive management team interested in steering their company towards a profitable horizon.”
When all procurement flows through the same channel, with the same standardised processes, this once complex, opaque and multi-faceted function becomes simple, transparent and accountable. Complete overviews can be achieved and effective corporate governance maintained. Global fleets and offices are united and easily managed. It’s a compelling proposition.
“That is what attracted me in the first place,” Nyborg concludes. “This is the future of ship supply, without a doubt. Moscord utilises data and digital expertise to answer the concerns of management and solve the challenges facing purchasers. At the same time, it allows suppliers, resellers, shipchandlers and manufacturers to build direct, profitable partnerships with their customers.”
“It’s tailormade for the maritime industry of today, and tomorrow – delivering not just the right products, but unbeatable value, control, convenience and understanding.”
“In other words,” he smiles, “no mess!”