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'Lessons Learned' Strategies & Ideas for the Marine Industry

Proper Staffing for Conversion Projects

Success is dependent on having appropriate staff

When ship owners arrange for conversions and/or major refits to vessels already within their fleet, they typically expect that their usual contingent of ship superintendents can oversee the project. After all (so goes their thinking) it is just another project at another shipyard involving a vessel with which the superintendents are already quite familiar.  This belief is not well-founded. It often is, in fact, counter-productive. How do we know this? Fisher Maritime has been called in to act as project management support to “rescue” a number of ship conversion projects that were in dire straits (considerable cost and schedule overruns) due to the fact that the project was beyond the ability of the owner’s on-site staff to keep up with the project’s demands.

The Responsibilities May Go Beyond the Scope of the On-Site Staff

The problems start with a failure by ship owning organizations to recognize that a major refit or conversion requires firstly the development of a contract and specification that adequately describe all of the work necessary to complete the vessel to the owner’s satisfaction. Too often, the staff that oversees routine maintenance is called upon to develop specifications for a much different type and extent of work. Then, once the work commences, owner’s staff must respond to each and every communication from the shipyard; and each such response has to be well founded, complete and based on the contract terms, not simply an informal or offhand reply. This places a burden on the owner’s on-site staff that goes far beyond the responsibilities that have to be satisfied during smaller-scope ship repairs.

Thus, the ship owner’s use of the normal complement of ship repair superintendents for major refits and conversions effectively constitutes an understaffing by the ship owner that will almost certainly lead to an unsatisfactory outcome.

A Real Example of a Refit/Conversion Project Gone Awry

Here is an example. A ship owning organization was acquiring a laid-up vessel for conversion to its own needs. The ship repair superintendents that had overseen the operation and maintenance of the predecessor ship were placed in charge of this project. Problems began almost immediately as they failed to appreciate that there were really two projects being applied to the same vessel at the same time. Namely, reactivation of a laid-up vessel is, by itself, a major refit. Then, the conversion of the ship to be able to accomplish its new mission profile was a second major project, albeit concurrent with the reactivation.

The owner’s project team went into the project with only a small on-site supplemental staff—the repair superintendent, his small staff and a few of the crew members as inspectors. When design modification questions arose due to incomplete conversion design and specifications, the owner’s team too often gave off-hand oral responses. By itself, that was a recipe for overruns and disputes. But also, the reactivation requirements had been underestimated by the owner’s design agent; so numerous growth work items arose at the shipyard.

The members of the team who were initially on-site were competent, but overwhelmed. Missing from the on-site project team was sufficient professional resources. This deficiency began with the initial planning of the reactivation/conversion, resulting in an inadequate contract and specification. Even very competent persons too few in number are just not sufficient for conversions and major refits, particularly when the contract documents are flawed.

Further aggravating the situation at the shipyard, the ship’s crew was independently undertaking work on the vessel without having integrated their schedule and resource requirements with the shipyard’s. The two parties were often in each other’s way, leading to a loss of productivity and sometimes to the necessity of rework.

The use of ship’s crew to act as inspectors, overseeing the shipyard’s work, initially seems
to make sense, since the crew is familiar with the vessel and is already on the payroll. However, without strong guidance from project management, the crew (when acting as inspectors) almost always expects the shipyard to accomplish what is needed to make the vessel essentially 100% functional in a manner that the crew members wish for, instead of limiting their criticism of the shipyard’s work only to ensuring compliance with the written contract specifications.

When the rapidly increasing budget requirements challenged the coffers of the owner, and when the anticipated delays meant cancellation of near-term revenue-earning charters, the owner’s team finally appreciated that it needed professional project management support (and turned to Fisher Maritime for that rescue mission).

In summary, going into a conversion or major refit, the owner’s team has to assemble all of the necessary resources. Those necessary resources include:

  1. well-developed specifications and plans based on a lengthy and careful comparison of them to the ship
  2. use of designers who have experience in ship conversion projects (not just in newbuilding projects)
  3. onsite availability of a sufficient number of professionals to develop considered and well-thought-out responses to the shipyard’s need for additional information
  4. integration of the crew’s workscope with the shipyard’s workscope
  5. training of the ship’s crew on how to act as true project inspectors instead of merely as critics of the shipyard’s work.

Fisher Maritime’s experienced personnel have the ability to analyze the contract and separate the work that is clearly described in the contract from unforeseen tasks that were not envisioned by the contract. It is then a matter of negotiating with shipyard representatives a reasonable addition to the contract price and the added time needed for the unforeseen work. Too often Fisher Maritime has only been called after the fact to assist in litigation with the other party after everything has gone wrong. At this stage the solutions are more difficult as an adversarial relationship has developed between the parties to the contract.

 

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