{"id":24498,"date":"2017-11-15T22:17:04","date_gmt":"2017-11-16T03:17:04","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/ahoy-maersk-embraces-the-internet-of-things\/"},"modified":"2017-11-15T22:17:04","modified_gmt":"2017-11-16T03:17:04","slug":"ahoy-maersk-embraces-the-internet-of-things","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/ahoy-maersk-embraces-the-internet-of-things\/","title":{"rendered":"Ahoy! Maersk Embraces the Internet of Things"},"content":{"rendered":"

What would salty, seafaring old timers say about fully digitizing the barnacle encrusted traditions of maritime shipping? They should<\/em> say bring it on<\/strong>! Digitization and the industrial internet of things present lucrative opportunities in the maritime shipping industry. Maersk, the world\u2019s largest container shipping company,[1] should continue to be concerned with digitization and the internet of things in order to maintain industry leadership and to enhance their profitability.<\/p>\n

The continued evolution of the internet of things will build customer appetite for granular information, customized solutions, supply chain transparency, and outcome based value propositions.[2] The shipping industry, and Maersk, will face continued pressure to evolve ahead of these changing customer appetites.<\/p>\n

Leaders at Maersk are paying close attention to digitization. They are seizing the opportunities presented by digitization and the internet of things with both short and medium-term measures.<\/p>\n

In 2016, Maersk created the Chief Digital Officer (CDO) role[3] \u2013 a short term action with long term impact. In 2017, the CDO spearheaded a major partnership with Microsoft as Maersk\u2019s cloud provider of choice[4] \u2013 signaling a dramatically increased need to store and fluidly access the data that will be gathered by thousands or millions of shipborne sensors. In another short-term move, the CDO and the Maersk analytics team employed sensors on ships in order to optimize route and speed as well as affixing tracking sensors to their shipping containers to gain efficiencies loading and unloading at various ports.[5]<\/p>\n

These short-term steps are complimented by Maersk\u2019s forward looking, medium-term actions on the digitization front. Moving forward, Maersk will employ predictive maintenance sensors on their ships in order to reduce maintenance costs and improve schedule reliability, by getting ahead of emergent maintenance issues and related delays.[6] In order to attack issues of efficiency, cost, and potential for fraud with regard to the paperwork required at each port of call and customs house, Maersk is working with IBM to develop blockchain solutions that will allow for paperless, transparent, and unforgeable ledgers.[7]<\/p>\n

In addition to the steps Maersk is currently taking, I recommend an increased focus on Maersk\u2019s cyber security posture. Increased digital integration and entrance into the internet of things exposes Maersk to significant cyber risks, as evidenced by the NotPetya cyberattack in 2017, which cost the company an estimated $300 million.[8] In order to achieve this enhanced security posture, I recommend that Maersk conduct a thorough after-action-review of the NotPetya cyberattack, share key lessons learned, and establish contracts for best-in-class cybersecurity capability.<\/p>\n

As a market leader, Maersk is in a powerful position to shape the future \u201csystem of systems\u201d[9] in which maritime shipping companies will digitally operate. The World Economic Forum report on the future of the industrial internet of things recognizes \u201cthe emergence of consortia to address the growing need for industry collaboration on common concerns such as security and interoperability.\u201d[10] I recommend Maersk assert itself as the leader of such a consortium. This positioning will enable them to shape synergies, monitor and favorably manipulate barriers to entry, and enhance interoperability in order to deliver on evolving customer appetites for supply chain transparency and outcome driven value.<\/p>\n

Maersk is well positioned to maximize the opportunities presented by the evolving internet of things, but should maintain focus and momentum in order to ensure they are not overcome by a nimble newcomer.<\/p>\n

Many open questions remain about how Maersk can best move forward. For example: The various capabilities of smart, connected products fall into four rough buckets; monitoring, control, optimization, and autonomy.[11] What are some possible applications for smart devices with autonomy and control functions in the maritime shipping industry?<\/p>\n

(797 words)<\/p>\n

Sources<\/p>\n

[1]Abraham Zhang and Jasmine Siu Lee Lam, \u201cDaily Maersk\u2019s impacts on shipper\u2019s supply chain inventories and implications for the liner shipping industry\u201d. Maritime Policy & Management, (2014), http:\/\/hdl.handle.net\/10220\/18865, accessed November 2017.
\n[2]Knut Alicke, Daniel Rexhausen, and Andreas Seyfert, \u201cSupply Chain 4.0 in Consumer Goods\u201d, McKinsey and Company Report (April 2017), https:\/\/www.mckinsey.com\/industries\/consumer-packaged-goods\/our-insights\/supply-chain-4-0-in-consumer-goods, accessed November 2017.
\n[3]Maersk, \u201cEverything will be digitised,\u201d https:\/\/www.maersk.com\/stories\/everything-will-be-digitised, accessed November 2017.
\n[4]Microsoft, \u201cMaersk goes Big \u2013 Digital Transformation\u201d, 26 April 2017, https:\/\/news.microsoft.com\/2017\/04\/26\/maersk-goes-big-digital-transformation-microsoft, accessed November 2017.
\n[5]\u201cProfits overboard\u201d, The Economist, 10 September 2016, https:\/\/www.economist.com\/news\/business\/21706556-shipping-business-crisis-industry-leader-not-exempt-profits-overboard, accessed November 2017.
\n[6]Ibid.
\n[7]Agustina Calatayud, \u201cThe Connected Supply Chain; Enhancing Risk Management in a Changing World\u201d, Inter-American Development Bank (Discussion Paper No IDB-DP-508), (March 2017), https:\/\/publications.iadb.org\/bitstream\/handle\/11319\/8204\/The%20Connected-Supply-Chain-Enhancing-Risk-Management-in-a-Changing-World.pdf?sequence=1, accessed November 2017.
\n[8]Greg Knowler, \u201cCyber-attack impact hangs over Maersk\u2019s Q3 earnings\u201d, Journal of Commerce, November 6, 2017, https:\/\/www.joc.com\/maritime-news\/container-lines\/maersk-line\/cyber-attack-impact-hangs-over-maersk%E2%80%99s-q3-earnings_20171106.html, accessed November 2017.
\n[9]Michael E. Porter and James E. Heppelmann, \u201cHow Smart, Connected Products Are Transforming Competition,\u201d 性视界 Business Review (November 2014 Issue), https:\/\/hbr.org\/2014\/11\/how-smart-connected-products-are-transforming-competition, accessed November 2017.
\n[10]World Economic Forum, \u201cIndustrial Internet of Things: Unleashing the Potential of Connected Products and Services\u201d (2016), http:\/\/reports.weforum.org\/industrial-internet-of-things\/general-findings\/2-1-the-state-of-the-market\/ , accessed November 2017.
\n[11]Michael E. Porter and James E. Heppelmann, \u201cHow Smart, Connected Products Are Transforming Competition,\u201d 性视界 Business Review (November 2014 Issue), https:\/\/hbr.org\/2014\/11\/how-smart-connected-products-are-transforming-competition, accessed November 2017.<\/p>\n

Image Citation:<\/p>\n

Microsoft, \u201cMaersk goes Big \u2013 Digital Transformation\u201d, 26 April 2017, https:\/\/news.microsoft.com\/2017\/04\/26\/maersk-goes-big-digital-transformation-microsoft, accessed November 2017.<\/p>\n","protected":false},"excerpt":{"rendered":"

Digitization and the industrial internet of things present lucrative opportunities in the maritime shipping industry. Maersk is leading the way with digital innovations that reduce costs and deliver on evolving customer needs.<\/p>\n","protected":false},"author":10185,"featured_media":26347,"comment_status":"open","ping_status":"closed","template":"","categories":[1505,2618,2029,2019,1062,164],"class_list":["post-24498","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-cargo-shipping","category-digital-age","category-digitization","category-internet-of-things","category-shipping","category-transportation","hck-taxonomy-organization-maersk","hck-taxonomy-industry-transportation","hck-taxonomy-country-denmark"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"\nAhoy! 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