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Danish transport and logistics conglomerate Maersk has been crossing the world’s oceans for over 100 years. But the company is not one to linger in the past and has put digital transformation high on its agenda.
In fact it sees digitisation as an opportunity to induce industry-wide change and to this end has appointed its first chief digital officer (CDO), Ibrahim Gokcen, to lead the charge.
“If we look at just ocean freight, the majority of all trade happens on oceans,” Gokcen tells Computer Weekly.
“Maersk is the world’s largest container carrier and fourth largest terminal operator [APM Terminals]. It is a huge responsibility.”
And Maersk is not taking it lightly. Gokcen initially came to the company a year ago to lead its analytics team and was recently appointed CDO. While the role is new, Gokcen brings to it plenty of understanding of transforming a traditional industrial company into a digital business. Prior to Maersk, he led the creation of Predix industrial internet cloud platform at US conglomerate General Electric (GE).
He is using this experience to harness vessel data, build partnerships and drive internal change. The plan is to transform not only Maersk’s own business and improve its customer experience, but make the entire transport supply chain more efficient, transparent and safe.
To take on the new role, Gokcen relocated from San Francisco to Maersk’s headquarters in Copenhagen. This is the heart of the shipping giant’s digital development, with the support of a few smaller teams across the rest of Europe and in India.
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In total, the Maersk Group employs roughly 88,000 people across 130 countries and differences in each region must be taken into account in all development projects.
“You don’t want to do your experiments on a global scale,” says Gokcen. “Typically, it is ideal to pick a few regions or organisations that have problems to solve. Solve their problems, learn from that and then expand to the rest of the globe, rather than try to roll out something globally at the beginning.”
He is applying this same approach to his digital team. The first goal is to build scale in Copenhagen and then look into options for expanding the team to different locations where digital skills are needed most.
Maersk’s digital push has already seen its IT and digital operations separated into standalone organisations. While the two work closely together, it is easier for both sides to focus on their areas of expertise. For IT, this means simplifying the company’s internal application landscape and architecture, and using technology to solve any bottlenecks in its processes.
“Now we [the digital capability] can focus on creating new services, new revenue streams, new software businesses that enable us to really move into the digital space and transform ourselves and our industry,” says Gokcen.
To achieve this the digital team is hiring people for roles more associated with software firms than transport, from user experience (UX) designers to analytics specialists to product and alliance managers.
Data as an asset
Gokcen is bolstering Maersk’s capabilities in artificial intelligence (AI), data science and machine learning in particular. The company wants to improve customers’ ability to track, trace and manage their cargo and be informed of any disruptions in the supply chain. This is where data plays a key role.
“We have containers and cranes, all sorts of assets that are extremely critical to our business and to creating value for our customers,” says Gokcen. “One of the key ambitions we have is to digitise them. By digitising we mean not only sensors, but also working with our equipment manufacturer partners and connecting data from assets to our cloud and then building analytics and applications on top.”
This is showcased in Maersk’s connected vessel programme. The shipping giant is working to better connect its vessels and operation centres by creating a shared digital environment between the onshore site and the offshore vessel. For example, this could be used to optimise the vessel’s fuel consumption, which is a major cost in shipping.
In another industrial internet of things (IoT) initiative, Maersk has connected its refrigerated containers to the cloud to monitor the condition and temperature of the container and the state of the cargo. Eventually, the company wants to make the data visible for its customers as well.
It is all part of Maersk’s wider industrial IoT and data product push. “While we are also investigating business models that allow us to succeed in an asset-light environment, we continue to value and invest in our physical assets,” says Gokcen.
“We need to make sure they are connected to get the data, so we can manage them, diagnose problems, create strategies around our assets, and use the data and knowledge from those assets to optimise the performance of our operations and the performance of our business.”
Plug and Play partnership
Data is also integral for Maersk’s partnership plans. Gokcen emphasises the importance of creating commercial, technological and innovation-based ecosystems today, and says a global company cannot develop everything itself.
An example is Maersk’s ambitious joint project with IBM to create a blockchain-based global trade digitisation platform. The aim of the project, which the two companies expect to launch in late 2017, is to digitise the largely manual paper trail in the shipping supply chain, increase transparency and improve data security for trade partners across the process.
Part of the platform’s development process involves a wide network of partners, such as ports, shippers, freight forwarders and customs authorities.
In addition, Maersk has turned its attention to startups. In early 2017, the company forged a partnership with Silicon Valley-based startup accelerator Plug and Play to create a new industry vertical called “supply chain and logistics”.
“The vertical brings together corporations interested in supply chain and logistics, as well as startups who are developing technology or commercial models for that vertical,” says Gokcen. “And it is creating an innovation platform so we can share problems, not only in corporations, but also with startups, and then find ways to collaborate.”
Despite Maersk’s many digital initiatives, it is still early days for the company’s digital journey, but Gokcen is pleased with its start. “What we have achieved is to really make digital a key priority, which is very important to our future as a transport and logistics company,” he concludes.