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Procurement Excellence in the Maritime Industry: Insights from Rick Ackermann at BW LPG

Rick Ackermann, Head of Procurement at BW LPG, brings a wealth of experience and strategic vision to the table, steering the procurement department of one of the leading LPG shipping companies. In this exclusive interview, Rick shares his approach to enhancing procurement efficiency, integrating sustainability, and navigating the complexities of the global market. Discover his insights on building supplier relationships, leveraging technology, and the future trends poised to reshape the procurement landscape in the maritime industry. Join us as Rick delves into the principles that guide his leadership and the innovative initiatives driving BW LPG’s procurement success.

Role Overview:

Could you describe your role as the Head of Procurement at BW LPG and the primary responsibilities it entails?

At BW LPG, the Head of Procurement is responsible for all procurement of goods and services, as well as being involved in all dry dockings. We have a team of four buyers and a Logistics Coordinator in Manila, and two buyers in Oslo. The Head of Procurement is stationed in Singapore. The main goal is to be a solid business partner for the business, which entails working closely with the Technical and Operations teams. Key activities include contract management, inventory management, innovation, ESG, and maintaining best-in-class procurement practices to provide the highest added value for BW LPG

Strategic Procurement Initiatives:

What are the key strategic initiatives you have implemented in BW LPG’s procurement practices since assuming your role?

Value chain. From day one, I have moved the role of Procurement higher up the value chain. The traditional view of Procurement has changed from a Purchasing department into a strategic business partner.

Transparency. In the past, it wasn’t always clear what Procurement did and what people could expect from our department. I have changed our procedures and setup in such a way that it is very transparent on every level. I also changed the perception that Procurement is a group of people taking care of things. We are all part of the Procurement process.

Contract management. We purchased a very intuitive contract management system (Scanmarket), which is easily accessible and currently contains over 170 contracts that we have in place

ESG. I have invested a lot of effort into ESG in our supply chain. This varies from introducing the Supplier Code of Ethics in all of our agreements and purchase orders to plastics reduction programs on board our vessels.

Group Procurement. I started a collaboration team with the Heads of Procurement of the other BW entities. Procurement has transformed from a central procurement department in Oslo to a decentralised setup around the world. By collaborating on volumes, best practices, and innovation, we have migrated into a hybrid solution.

Clean Shipping Commitment

HULL PERFORMANCE

Committed to the green shipping movement

Impacting fuel efficiency

The need to improve sustainability in the shipping industry is accelerating. The global industry must cut carbon emissions, protect marine biodiversity and leverage the use of data for smarter decision-making.

Biofouling can increase fuel consumption by as much as 40 %, adding to the already high CO₂ emissions. Regular monitoring of fuel consumption, fouling and speed loss, can help you keep track of the vessel’s condition and means of cost reduction. The proven performance of Jotun’s Hull Performance Solutions can reduce fuel cost by as much as 14.7 %.

Biofouling can increase fuel consumption by as much as 40%, adding to the already high C02 emissions. Regular monitoring of fuel consumption, fouling and speed loss, can help you keep track of the vessel’s condition and means of cost reduction.

Clean shipping commitment

With nearly 100 years of experience of charting through unknown waters, Jotun is committed to continuously innovate and develop advanced products and solutions designed to protect biodiversity and cut carbon emissions to support global sustainability ambitions and achieve cleaner operations for all industry players. A clean hull ensures cleaner operations.

Reducing carbon emissions together with

Jotun established Hull Performance Solutions (HPS) in 2011 to make it easy for operators to maximise hull performance and thereby reduce both fuel costs and greenhouse gas emissions. The solution consists of Jotun’s advanced antifouling products, combined with a transparent method for measuring the impact of antifouling on vessel energy efficiency.

HPS consist of four key elements which work together to optimise performance:

• High performance antifoulings

• High-end technical service

• Performance analysis

• Performance guarantee

Challenges in Procurement:

What are the most significant challenges you face in procurement for an LPG shipping company, and how do you address them?

From a procurement perspective, we would like to be as efficient as possible. Planning of transports is very challenging in our industry, as the port of delivery for our goods and services is sometimes changing on a daily basis. Unfortunately, this means that we have to airfreight a lot of our spare parts, which has a negative impact on our carbon footprint.

Another challenge everybody faces in shipping, which makes it more fun at the same time, is that this is a very conservative industry. As a standard, the credo is “if it ain’t broke, don’t fix it!” This means that driving innovation is upstream, and solutions found in other industries still have to be introduced in shipping. The fun part is convincing people and the fact that there is still room for improvement.

Supplier Relationships:

How do you cultivate effective supplier relationships to ensure seamless operations and business continuity at BW LPG?

In order to do that, I still rely on the Kraljic matrix. It is a well-known tool to classify the importance of suppliers products and services, and is very effective when it comes to supplier positioning, criticality analysis, and quadrant strategy. As a basis, you should figure out what kind of relationship you have or need to have with a supplier or partner. You then make sure that you assign the right buyer to the right quadrant and thus supplier. Not doing this correctly could potentially damage the relationship and therefore our position. Setting this up in the right way tremendously influences our position and leverage. Above all, whatever you do and in whatever position you are in with regards to the supplier, respect is always the keyword.

Technology in Procurement:

Can you discuss the role of technology in enhancing procurement efficiency and transparency at BW LPG?

Especially with regards to the operational part of the procurement process, there are some quick wins when it comes to the role of technology. As we digitise the purchasing role, we can introduce innovations and efficiency improvements. We are, for example, introducing Amazon-type platforms with certain suppliers for technical stores and PPE, such as Source 2 Sea, which makes it easier for the crew on board our vessels to simply click on the picture of the parts or equipment they need. Also benchmarking and forecasting through Closelink for Lube Oil is a new development which we embraced. The role of Procurement is to facilitate this - we can help organise the financial back office,monitor deviations, and take on the more mundane tasks so that our colleagues at sea can focus on the strategic issues and flawless operations. Another major step we are currently investigating is the introduction of new technology regarding inventory management. Together with one of our partners in freight forwarding, Marinetrans, we are developing an inventory management platform, eSeastore, that will give us the tools to plan based on stock levels and have sophisticated tools on board to maintain stock on the vessel. This is a very exciting project.

Sustainability Practices:

How does BW LPG integrate sustainability into its procurement processes, especially considering the environmental impact of shipping?

As mentioned before, we have the Supplier Code of Ethics as an integral part of everything we do. In addition to this, we are increasingly choosing green solutions for parts and services in different regions of the world. Regarding Scope 3, we are still analysing and investigating potential consultants to work with. We are cautious and wary of anything that remotely looks like greenwashing, so there is still a long way to go.

Impact of Global Markets:

How do global economic conditions and market fluctuations impact your procurement strategies?

Obviously, they do, and they disrupt anything that we plan or forecast. I mean, who was counting on COVID-19? Or the political uncertainties in many parts of the world? The blockage of the Suez Canal? Drought at the Panama Canal, etc. The good thing is that we know we are very creative when it comes to problem-solving. Yes, we like to plan as much as possible, but we are agile and switch gears when necessary and required.

Future Procurement Trends:

What emerging trends do you see in procurement that could significantly impact the LPG shipping industry in the coming years?

From a leverage point of view, unfortunately, increasingly I see large companies buying out the smaller ones, which impacts our ability to leverage in certain parts of the supply chain. This is not a good development.

The two biggest trends, however, are undoubtedly in ESG and AI.

I strongly believe and hope that in a few years’ we will have surpassed the awareness phase of ESG and that there will be more regulation and certification, making it a lot easier for all companies to determine, on the basis of a standard, who to work with. ISO did the same thing for business processes in the 1980s.

Artificial Intelligence is an absolute game changer in any business. A lot of our repetitive activities will be taken over by AI, but also market analytics, supplier dashboards, forecasting, and reporting will be a lot easier and faster. Is this a threat to our procurement existence? Not at all, it simply means that we have more time for actual procurement activities instead of creating tools to help us do just that.

WORLDWIDE SAFETY SERVICES

EPSCO (CYPRUS) LTD OFFICE +357-25733091

surveys in lieu of Class footage. Inspections bearing etc, damage protection, pre-purchase, pre/ equipment globally. They o er optimize speed and perlocal restructions. EPSCO (CYPRUS) LTD OFFICE +357-25733091

of Class Inspections damage pre-purchase, pre/ They o er and perrestructions.

EPSCO (CYPRUS) LTD OFFICE +357-25733091

EPSCO GROUP HAS 30 YEARS’ EXPERIENCE IN THE FIELD OF SAFETY SERVICES AND SUPPLIES.

EPSCO (CYPRUS) LTD OFFICE +357-25733091 1ST FLOOR, NO. 12 C KOLONAKIOU STREET LINOPETRA 4103 AYIOS ATHANASIOS LIMASSOL, CYPRUS

EPSCO (DEUTSCHLAND) GMBH OFFICE + 49 40 25330540 SUEDERSTRASSE 159 A 20537 HAMBURG GERMANY

1ST FLOOR, NO. 12 C KOLONAKIOU STREET LINOPETRA 4103 AYIOS ATHANASIOS LIMASSOL, CYPRUS

EPSCO (DEUTSCHLAND) GMBH OFFICE + 49 40 25330540

SUEDERSTRASSE 159 A 20537 HAMBURG GERMANY

EPSCO (ASIA PACIFIC) PTE LTD OFFICE +65 6265 9477

62 UBI ROAD 1, OXLEY BIZHUB 2 #10-07, S(408734) SINGAPORE

1ST FLOOR, NO. 12 C KOLONAKIOU STREET LINOPETRA

4103 AYIOS ATHANASIOS LIMASSOL, CYPRUS

EPSCO (DEUTSCHLAND) GMBH

EPSCO (DEUTSCHLAND) GMBH OFFICE + 49 40 25330540

SUEDERSTRASSE 159 A 20537 HAMBURG GERMANY

EPSCO (ASIA PACIFIC) PTE LTD OFFICE +65 6265

EPSCO (ASIA PACIFIC) PTE LTD OFFICE +65 6265 9477

62 UBI ROAD 1, OXLEY BIZHUB 2 #10-07, S(408734) SINGAPORE

EPSCO is renowned for its ﬁrst-class safety services in the shipping industry. We service around 4,000 vessels annually and maintain ﬁxed-fee Fleet Agreements for over 900 vessels worldwide, supported by teams in Cyprus, Hamburg, Rotterdam, and Singapore,along with our own FFE servicing facilities in Rotterdam.

EPSCO (ASIA PACIFIC) PTE LTD OFFICE +65 6265 9477 62 UBI ROAD 1, OXLEY BIZHUB 2 #10-07, S(408734) SINGAPORE

What makes EPSCO different to other service providers’ fleet agreements?

Cooperation with customers combines all safety services into as few port calls as possible, saving time and money on overtime, transport, and scheduling.

As a result, all safety equipment certiﬁcates are harmonized allowing services to be planned more efﬁciently each year and again avoiding the time and cost of ad hoc attendances.

Full responsibility is taken for notifying of upcoming services, arranging services, following up, and managing all certiﬁcations to ensure they stay valid.

All certiﬁcates are securely stored on servers. Customers can access, view, and download certiﬁcates, as well as check service schedules and completed services.

A ﬁxed annual fee is charged, divided into four quarters, instead of billing for each service. Consolidating services into fewer port calls includes transport and overtime in the fees, eliminating surprises and helping customers plan their vessel’s annual budget. (Launches and barges not included.)

There is no penalty fee for withdrawal of vessels from the agreement. If a vessel is sold or leaves management before all services are completed, the contract invoices will be credited and reinvoiced only for work done.

We are proud and honoured to be a

For more than three decades, Marinetrans has been a leading fourth-party logistics provider. We specialize in customized supply chain solutions and efficient ship spare delivery.

Our door-to-deck services support over 8,000 vessels across more than 2,000 ports. We prioritize proactive client support through expediting services and vendor management. Our tailored services are designed to deliver cost savings, transparency, and a single point of contact.

Strategically located hubs allow us to receive and consolidate cargo from marine parts suppliers. This ensures seamless logistics and timely deliveries. With 13 global offices, including locations in Greece, Singapore, Norway, the USA, Japan, Korea, and the Benelux, we are well-equipped to meet your logistics needs worldwide.

At Marinetrans, we strive to exceed client expectations. Our unique consolidation system and comprehensive services, including warehousing, freight forwarding, and customs clearance, are designed with excellence in mind. Every aspect of the supply chain is managed with precision and care.

To discover more about how Marinetrans can address your marine logistics needs, please visit our website at http://www.marinetrans.com.

Leadership Philosophy:

What leadership principles guide you in managing BW LPG’s procurement department?

A few principles are essential for any management position. First off, you should develop and train your individual team members in such a way that they can leave the company tomorrow but at the same time make them feel so proud and responsible that they don’t want to leave.

They need to understand how important they are to the team and enjoy every day that they are with you. Secondly, you should always be very clear regarding expectations and manage on the big lines. Never micromanage your team.

Be a real person and make people want to go the extra mile for you. Lastly, you should know what your own shortcomings as a leader are and find someone in the team who can take care of that part for you, simply because he or she is better at it. There is no shame in that; it’s just a matter of effective and situational leadership.

Career Advice:

Based on your extensive experience, what advice would you give to professionals aspiring to pursue a career in procurement within the shipping industry?

I always advise young professionals or those deciding on a career direction to consider Procurement. This amazing profession has everything you could possibly want in a career. You work with people, negotiate, create contracts, manage a team, be creative, manage change—the list goes on!

And then there’s the Shipping industry. As mentioned before, there is a lot of room for improvement and innovation. The industry can benefit tremendously from new and young talents with a different mindset. If you are resilient, flexible yet strong-minded, and willing to listen to those who understand life on board a vessel, there is no better career!

MCTC is a global maritime catering management and training business with a primary vision to revolutionize the quality of meals served onboard vessels.

We are committed to delivering exceptional culinary experiences and promoting nutritious food choices for the well-being of seafarers.

MCTC is a global leader in maritime catering management and training, renowned for supply chain optimization and culinary excellence. The company offers comprehensive services, addressing all aspects of vessel catering needs from supply ordering to recipe planning, to health and nutrition, as well as various training programs.

The company’s catering competency development program adopts a holistic approach, emphasizing training, motivation, support, sustainability, and nutrition services. Through conferences, webinars, and specialized training, MCTC elevates galley standards, motivates crews, and promotes nutritious meal options with the help of their experienced consultants who conduct regular vessel visits, ensuring high standards of training both onboard and ashore.

MCTC combines advanced culinary practices, efficient supply chain solutions, and tailored training programs to meet the unique needs of each vessel. Their commitment to sustainability is evident in their eco-friendly practices, focusing on reducing food waste and sourcing sustainable ingredients.

By focusing on professional development and continuous learning, MCTC ensures highquality dining experiences on vessels worldwide. Their approach not only enhances the skills of onboard catering crews but also addresses procedural issues, contributing to the overall success of their clients.

Rick Ackermann Head of Procurement