Purchasing

  • An effective purchasing strategy is at the core of successful purchasing departments. Strategies that offer total value to an organization should be the goal of all purchasing organizations.

    Purchasing professionals around the world are always in search of new strategies that creatively reduce costs and add previously unrealized value to an organization.

    Since motivating multi-company groups is difficult, the purchasing department must offer a clear strategy that offers value to all involved. Hence.

    Purchasing Programs, procuring products plus services, is a strategy that can be employed successfully to bring value to all involved.

    The theory of Purchasing Programs is to leverage vendors to offer products and services — whereas previously — vendors were only offering products. The approach is to challenge vendors to offer significant value in areas not previously realized. This shift requires that the purchasing department refuse to purchase products based solely on the acquisition cost of the product. The evaluation of the total purpose of the product and services within an enterprise is the key.

    Purchasing Programs utilize the vendor's services to enhance the value of commodity purchases. Purchasing Programs focus on buying service plus products, not simply products. This concept is simple, however the application of such a methodology of purchasing within an organization is difficult.

    Unlike purchasing to simply reduce the purchase price of a product, Purchasing Programs need careful planning prior to the solicitation of requests from vendors.

    Effective Purchasing Programs must have clearly defined objectives, a process to review these objectives, and a method to evaluate the objectives of the process.

    American Classic Voyages (AMCV) had been struggling with coating technologies, and had diversified their vendor and product base in the hopes of finding the most effective mix of products and vendors. AMCV also spent considerable time and effort in the research and testing products that companies offered in hopes of finding the correct items to meet their needs. After research and review, purchasing determined that concentrating purchases with one particular vendor would be more effective in gaining the commitment of one qualified company to assist in handling the company's paint requirements. After careful study of the company's total purchases, and vendor base, International Paint was determined to be the best fit - its size, reputation, and ability further supported this decision. In addition, the company was awarded significant projects in AMCV's future expansion.

    Once International Paint was identified as a potential partner to create a Purchasing Program for AMCV, International Paint was approached by Ocean Development, a wholly owned subsidiary of American Classic Voyages, with the lure of additional business. A three-element program was created by Ocean Development (ODC) to offer incentives to all parties involved. Beginning with a rebate program, which was created to lower overall costs, it was also designed to offer the operating divisions incentives to concentrate their purchases with this supplier. Secondly, there was up front allowance granting paint to AMCV that would be used to support their upcoming projects. Third, there would be a quantifiable process to allow the vendor to address all coatings issues in an attempt to offer coating solutions to existing problems.

    Upon implementation of this plan, there would be then be a multi-division meeting to address all of the coatings challenges. A meeting was set where all individuals involved with paint were to participate in a feedback session with a senior vice president of International Paint. The purpose of the meeting was to clarify requirements on both sides in order to establish an action plan.

    With favorable intentions in mind, the initial meeting opened with all participants venting their dissatisfaction with the previous level of service of International Paint. There were several outstanding issues with the company, such as incorrect invoices, lack of a consis- tent customer service representative, and lack of product, which matched existing paint. The International Paint representative listened attentively to each complaint and took copious notes regarding each concern. Once all of the concerns had been raised, the International Paint representative apologized for all the problems previously encountered and assured that these issues would be corrected.

    He then launched into his presentation explaining what his company could offer and discussed what steps the two companies should take in the future.

    This presentation included considerable data regarding International Paint and its many different offerings. It was clear that International Paint had the resources to offer all of the needed coatings services. The challenge then became to determine in what priority should these offerings be implemented.

    A few days following the meeting, International Paint had already distrib- uted a task listing complete with responsible parties and due dates, which in turn became the vehicle for the Purchasing Program. Each issue, concern, support and training requirement was included on this list, thus mobilizing International Paint resources in ports around the U.S. This program also included the full time services of International Paint inspectors in three key ports in support of various projects, as well as a paint application and use training program for end users. International Paint was also called upon to provide coatings handbooks for new projects, the creation of a color matching program for existing coatings, a custom blend on demand program, and a paint identification program.

    Through the diligence of ODC and International Paint, the program was ultimately labeled a success. International Paint has been diligently delivering the desired results along with correcting previous omissions in their service.

    After six months all participants were asked to rate International Paint; the company was rated 3.59 on a scale of 1 to 4. Although there is some room for improvement it is very clear that the overall satisfaction level is favorable.

    In addition to this improvement in service, AMCV has received custom training and the services of paint inspectors in three key ports. If AMCV were to fund additional full time paint inspectors and training at these sites the cost to the company would amount to approximately $100,000. Clearly there is considerable benefit by bundling these services within the cost of the product rather than purchasing these services independently. Labor savings, costs savings, expertise and training are all tangible benefits of the program. International Paint has benefited from its early involvement in the process of color selections. This has allowed them to offer critical input regarding past experience with other owners, as well as giving them input early into the upcoming projects. International Paint also learned how to mobilize its offerings in a manner to increase customer satisfaction and to better understand the unique needs of the cruise industry. In what could be dubbed as a win-win situation, AMCV has received a valuable partner with regards to coatings technology, and International Paint has been rewarded with a loyal client.

    Robert Lee Gordon is currently the director of purchasing for Ocean Development Company. Mr. Gordon is responsible for all project related purchasing of hotel, nautical, and engineering products for Project America, M/S Patriot, Columbia Queen, and the coastal vessels.

  • More than 80 key marketing and sales executives representing some 40 leading marine machinery manufacturing companies currently selling to the U.S. Navy attended a recent seminar in Washington, D.C. conducted by the Marine Machinery Association (MMA). Rear Adm. James Nunnelly, USN (Ret.), president

  • Frank Castelvecchi has been named c o r p o r a t e purchasing agent for Ships Supply Inc. of Jacksonville, Fla., by Michael C. Kenney, president of the company that supplies provisions, deck, and engine equipment to vessels and industrial plants. Mr. Castelvecchi, who was associated with North

  • Ed Paden, president of Levingston Industries, Inc., Orange, Texas, announced recently the formation of a new member of the Levingston Group of Companies, to be called Levingston Service Company, Inc. Levingston Service Company will have two principal activities, Mr. Paden stated. First, the purchase

  • on the back end. In actual practice, issues can develop that relate to price, payment terms, delivery terms and warranties for the equipment that you are purchasing. The Battle of the Forms The most common situation where a company is caught by a surprise provision relates to what lawyers often refer to as

  • solution." Oslo-based ShipNet offers a variety of software applications from manifesting, container tracking and voyage planning to accounting, purchasing and office management. ShipNet is compatible with purchasing portals, like ShipServ and iShipExchange. Such integration means the shipping company's

  • Marine Procurement Solutions (MPS) has built an electronic platform that aims to enhance the purchasing cycle for the maritime industry. MPS provides software, consultancy services and other customized solutions through its Direct Connect e-procurement trading platform that is designed to unite buyers

  • A.P. M0ller-Maersk Group, one of the largest shipowning groups in the world, has established a dedicated company to handle all of the technical purchasing requirements of its extensive fleet. Maersk Procurement, the new company, is now responsible for all coordinated purchasing for the various fleets

  • , has announced that Vincent Fiorenza, assistant vice president- cost and subsidy, will be assuming additional responsibilities for directing the purchasing and inventory departments. Mr. Fiorenza's new title will be assistant vice president-purchasing and cost control. He will oversee all purchasing

  • Fendrick is a graduate of the Wharton School of the University of Pennsylvania and attended graduate school there. He has an extensive background in purchasing at the Rohm and Haas Company, and at Quaker Chemical Corporation, where he served as director of purchasing prior to joining Selby, Battersby &

  • information necessary to run the business. In addition, several manual processes and mechanisms were used in the estimating, scheduling, purchasing and accounting. In order to report of use information on a consolidated basis, countless manual hours had to be expended to pulling spreadsheets

  • election of Daniel F. Galvin as vice president of material acquisition and G. Guy Via as vice president of ship repair. Mr. Galvin is responsible for purchasing the company's raw materials, parts and services, which last year amounted to more than $300 million. Mr. Via is responsible for identifying and devel

  • MN Nov-23#31 carrying renewable fuels. In our plan-
ning, we are)
    November 2023 - Marine News page: 31

    carrying renewable fuels. In our plan- ning, we are monitoring the Califor- nia Air Resources Board guidelines; as some of our vessels are equipped with Tier 4 engines, including the 4,000 HP Susan Rose built in 2019.” The California Air Resources Board (CARB) has implemented several regulations to

  • MN Nov-23#19 gains from vessel sales by excluding from taxable income)
    November 2023 - Marine News page: 19

    gains from vessel sales by excluding from taxable income any the United States or, if manufactured outside the United amounts from such sources that are deposited into a CCF States, not produced in the United States in suf? cient and account established through a contract with MARAD. Earn- reasonably

  • MN Nov-23#18 Column   
Legal Beat 
Bringing the Capital Construction)
    November 2023 - Marine News page: 18

    Column Legal Beat Bringing the Capital Construction Fund Program Ashore By James Kearns, Special Council, Jones Walker LLP On May 5, 2023, base amount, providing a total of more than $662 million the White House announced that the Environmental Pro- for FY 2023. The NOFOs that have been issued for

  • MN Nov-23#13 Insights
business is building tugboats for customers)
    November 2023 - Marine News page: 13

    Insights business is building tugboats for customers throughout the U.S., this can sometimes mean coming up with new ways to solve challenges bound to arise in the shipbuild- ing industry. The yard is situated in what Manning described as “an odd location for building boats”, nestled between a road and

  • MR Nov-23#74 OPINION: The Final Word
Copyright vectorwin/AdobeStock
verag)
    November 2023 - Maritime Reporter and Engineering News page: 74

    OPINION: The Final Word Copyright vectorwin/AdobeStock veraging these technologies at every level of operations. This operational ef? ciency with the stroke of a pen, while instant- is why the RDC is working and has worked with organiza- ly improving morale and retention as the service continues to tions

  • MT Sep-23#71 SUBSEA EUROPE SERVICES
www.subsea-europe.com/
Established)
    September 2023 - Marine Technology Reporter page: 71

    SUBSEA EUROPE SERVICES www.subsea-europe.com/ Established at the beginning of 2020 with the goal to “simplify marine data acquisition” and make it possible for every organization to collect and evaluate marine data professionally, Subsea Europe Services provides easy access to precision sensors and

  • MT Sep-23#57 heat transfer material behind the PCB  letters are bare)
    September 2023 - Marine Technology Reporter page: 57

    heat transfer material behind the PCB letters are bare aluminum. components, and do lots of testing pre- to carry the heat away from the LEDs deployment. Cree LEDs produce more (google “CREE LED Luminaire Design Many parts can be purchased by an light per watt, so less heat, and their Guide”). LEDs

  • MN Oct-23#35 Feature
Offshore
“It’s inevitable that some of these
vessels)
    October 2023 - Marine News page: 35

    Feature Offshore “It’s inevitable that some of these vessels are going to be operating outside of the normal parameters, but I think that’s just something we’re going to have to accept.” – Jonathan Lints, Clarksons Clarksons Many of these vessels simply aren’t So, what’s going to happen? “We order to

  • MR Aug-23#39 EMISSIONS REDUCTION, MEASUREMENT
I understand the philosophy)
    August 2023 - Maritime Reporter and Engineering News page: 39

    EMISSIONS REDUCTION, MEASUREMENT I understand the philosophy of making those ships. It was a U.S. Coast Guard R&D Center project, and we found on their medium endurance cutters we could save 18% critical design decisions early in the process, be- cause as the design and construction progress, by allowing

  • MN Aug-23#42 Tech File  
Shipyard Tools
jects of rust, paint and)
    August 2023 - Marine News page: 42

    Tech File Shipyard Tools jects of rust, paint and contaminants to bare metal. lando, Fla.-based Laser Photonics, a provider of patented However, for operators, exposure to corrosive acids and industrial grade CleanTech laser systems for cleaning and noxious chemical fumes is inherently dangerous.

  • MN Aug-23#29 Feature
Shipyard Equipment
hipyards across the U.S. are)
    August 2023 - Marine News page: 29

    Feature Shipyard Equipment hipyards across the U.S. are investing in new equip- “Schedules are tight and customers are struggling to get ment to increase lift capacity, opening up the door into bigger yards – which makes it dif? cult to keep up with S for more projects and improved ef? ciency. the

  • MN Aug-23#9 telescopic crawler crane. Division, of Havelock, N.C.)
    August 2023 - Marine News page: 9

    telescopic crawler crane. Division, of Havelock, N.C., will receive $86,649 to train Fincantieri Marine Repair, LLC, of Jacksonville, Fla., and certify employees in three required disciplines to en- will receive $874,079 to support the purchase of a water hance productivity in vessel repairs. blast and

  • MN Aug-23#8 By the
Numbers
MARAD Small Shipyard Grants
The U.S.)
    August 2023 - Marine News page: 8

    By the Numbers MARAD Small Shipyard Grants The U.S. Department of Transportation’s Maritime Ad- Fiscal Year 2023: ministration (MARAD) in May announced $20.8 million ACBL Transportation Services, Inc., of Jeffersonville, in grant awards to 27 small shipyards in 20 states through Ind., will receive $1

  • MT Jul-23#41 Indonesia’s Basarnas Buys SMD Atom ROV 
Indonesia’s)
    July 2023 - Marine Technology Reporter page: 41

    Indonesia’s Basarnas Buys SMD Atom ROV Indonesia’s national search and rescue agen- cy, Basarnas, purchased a Hydraulic Atom ROV Cource Freire Shipyard from Soil Machine Dynamics (SMD). The ROV has been acquired to support the organization’s res- IFREMER to Build New RV cue teams reach deeper waters.

  • MR Jun-23#21 each time), with the aim of identifying suspicious cargo)
    June 2023 - Maritime Reporter and Engineering News page: 21

    each time), with the aim of identifying suspicious cargo to users for thorough investigation.” According to Ken Rohlman of Hapag-Lloyd the concept of HazCheck Detect is not a novel one. In fact, Hapag-Lloyd had developed as far back as 2010. The results were shocking, and they highlighted what is an

  • MR Jun-23#19  the 
federal government’s purchasing power to force industry)
    June 2023 - Maritime Reporter and Engineering News page: 19

    and encryption on federal networks. It also es- The Author tablished software development security standards, using the federal government’s purchasing power to force industry to Price build more secure IT products. Gene F. Price has substantial real-world experience in cybersecurity and focuses

  • MR May-23#52 HYDROGEN HUBS & BATTERIES
Amogy’s ammonia 
fueled tug.)
    May 2023 - Maritime Reporter and Engineering News page: 52

    HYDROGEN HUBS & BATTERIES Amogy’s ammonia fueled tug. The Hydrogen One vessel. Image courtesy e1 Marine Image courtesy Amogy decarbonization, and the U.S. abundance of potential hydrogen a new hydrogen-hybrid propulsion system that integrates hy- production available, in the future, for export. drogen

  • MR May-23#42 GREEN MARINE
HEMPEL
One recent success was with Ultrabulk)
    May 2023 - Maritime Reporter and Engineering News page: 42

    GREEN MARINE HEMPEL One recent success was with Ultrabulk in Copenhagen, myriad of organizations and debates centered on the environ- where Hempel applied Hempaguard on one of its ships. “It's mental issues for the coatings and the shipping industry as a a relevant case, because they are the ship owner;

  • MR Apr-23#31 COVER STORY CURTIN MARITIME 
to mechanical dredging.)
    April 2023 - Maritime Reporter and Engineering News page: 31

    COVER STORY CURTIN MARITIME to mechanical dredging.” offshore towing performance.” That started the company on a faster growth track, from two While older tugboats mean proportionately higher operat- employees in 1997, to 20 employees in 2014, to 50 employees ing expenses, Curtin said “at the end of the

  • MN Apr-23#18 Column   
Decarbonization 
lease price of zero-emission)
    April 2023 - Marine News page: 18

    Column Decarbonization lease price of zero-emission equipment, with no scrappage (San Pedro Bay Ports, 2021), including 1,615 yard tractors requirement. There is also further CORE funding avail- (80% powered by diesel engines), 560 forklifts (nearly 40% able for machines deployed in disadvantaged

  • MN Feb-23#26 Feature
Training & Education 
Seafarers International)
    February 2023 - Marine News page: 26

    Feature Training & Education Seafarers International Union institutions. In 2019 and 2020 the report tells that there were wind energy programs available at Clinton Commu- nity College and Sullivan County Community College. But only two students completed the program at Clinton. State of? cials are

  • MT Jan-23#8 Letters to the Editor
We received some terri? c comments)
    January 2023 - Marine Technology Reporter page: 8

    Letters to the Editor We received some terri? c comments and experiences from the last Lander Lab “Underwater Releases” bit.ly/3j2KBkZ Patrick Lahey, Triton Submarines, on Frangibolts More on Galvanic Releases: Patrick Lahey, Triton Submarines (Sebastian, Flori- Galvanic (bimetallic) releases are

  • MR Dec-22#19 It is not an easy task and to be Esthetic Design Sensitized)
    December 2022 - Maritime Reporter and Engineering News page: 19

    It is not an easy task and to be Esthetic Design Sensitized on it and discovered that Karstensens was building two ? sh- can be frustrating at times. ing vessels that, while not quite as sexy and EDS perfect as A few years ago, I partnered in the purchase of a 1986 Tran- 1970’s West Coast tuna seiners

  • MR Dec-22#8 By the Numbers
Powered by
Chinese Shipowners
Courtesy of)
    December 2022 - Maritime Reporter and Engineering News page: 8

    By the Numbers Powered by Chinese Shipowners Courtesy of our friends at VesselsValue, we take a deep dive into the Chinese maritime market. Despite nearly three years of COVID lockdowns, which largely continue in mainland China, the numbers speak for themselves. Top 10 Owners Company # of VesselsTotal