Bigger is always better! Biggest rock is best rock; biggest marine firm is best firm! . . . But what benefit do we really get from a larger marine consultant? And what are we paying for that increased size? If you only have a $10k project, do you expect to get a fair deal from a firm with a $500M annual revenue? Truly, there are many aspects to consider when evaluating the size of the consulting firm. In this video, I present four things you need consider when matching to match the firm size with your project size.
- Estimate project size
- Large Firms
- Vendor Direct Designs
- Shipyard Direct Designs
1.0 Estimating Project Size
Any consultant will claim that they can achieve any size of project. Most will be good enough to avoid committing to outlandish impossibilities. You need to worry about the cases that are harder to define. In the consultant’s mind, it is easy enough to hire a few extra people and increase resources to achieve your goals. Avoid becoming a victim of the consultant’s eagerness. Perform your own estimate of project requirements before even speaking to a consultant.
- Get a rough estimate of the project size / scope. Try to express this in man-hours.
- Estimate the schedule that you need. Weeks, months, or years?
- Divide the project scope by your schedule. This gives you the number of people required. Then add a little extra for project management.
- For a fair estimate, assume each person works 34 hr/week on your project. This allows extra time for overhead processes and some inefficiencies.
- Calculate a rough price for the project. Assume all the people work on your project full time for the length of your schedule.
- Each person works 40 hr /week.
- Assume a billing rate somewhere between $90/man-hr and $200/man-hr. The variation stems from the difference in skill of the workers.
- $90/man-hr equates to a designer
- $200/man-hr equates to a principal engineer with decades of experience.
The estimating process is difficult to understand without an application. In the video, I provide an example that shows application of these estimating steps.
2.0 Larger Firms
Now you know what size of firm you require. Let’s consider the options, specifically asking if larger firms will provide better benefit. Certainly, there are cases that require larger firms. If you have a massive project requiring one hundred people to complete on schedule, absolutely call a larger firm. But what about the small and moderate sized projects? In the video, I give extra attention to comparing the advantages and problems of working with larger firms.
There are two special types of larger firms that bear extra consideration: vendor direct designs and shipyard direct designs.
3.0 Vendor Direct Design Consultants
Vendor direct designs come from large companies like Rolls Royce, Wärtsilla, etc. These companies primarily make equipment and components that go in your vessel. They also offer design services, claiming to provide turn-key integration and a smoother design and build process. Marketing efforts will try to convince you that an integrated approach can relieve all your problems. But the vendor direct design leads me to several questions.
The vendor claims to offer better integration of their own products. Why? What extra information is provided internally that they will not provide to an outside consultant? Regardless of who does the design, these vendors are profit motivated to ensure the best integration of their machinery. And profit motivation can create other conflicts of interest. These vendors generate far more revenue on equipment sales than design effort. They have a clear motivation to promote their own products, which may not be the best product for your application.
3.1 Example of Conflict
I saw a clear example of a possible conflict on a Rolls Royce promotional video. In this video, Rolls Royce envisioned a future concept of remotely operated ships. I give Rolls Royce full marks the ambition to pursue this vision. In the video, they even demonstrate how remote ships will handle equipment failure. The operator identifies a damaged antenna and orders a replacement part to be installed at the next port of call.
Now imagine that the antenna is a proprietary part, only supplied by Rolls Royce. As the ship owner, you just paid for a new replacement unit ($$$); the cost of shipping the unit to a remote port ($); and the cost for a specialist to install, inspect, and test the new unit before the ship leaves port ($$). This sounds like a great deal for Rolls Royce. An independent consultant will work diligently to provide multiple sourcing options and allow the owner better negotiating power when sourcing replacement parts. I question whether a vendor direct design is driven by equal commitment to the client’s success.
4.0 Shipyard Direct Designs
Vendors are not the only companies that provide direct design services; shipyards also provide designs. Shipyard direct designs entice with the promise of less problems during detailed design and construction. The shipyard can customize all design details and ensure easier production. Sounds great, right? But if the shipyard already has your business, expect a less competitive production price. And remember that shipyards make money on building vessels, not designing new innovations. They often employ template designs that are adjusted slightly to suit your needs. It is a win-win if your needs fit one of their templates. But the further you deviate from the template, the less efficiency you can get from the design. Customized vessels are usually highly optimized to your specific usage profile. I do not advise treating these custom vessel as templates to adjust for any alternative applications.
There is a happy compromise on shipyard direct designs: designer partnerships. These take the form of design-build contracts or design contracts with shipyard assistance. In this case, a design consultant handles the bulk of the vessel design. They have the resources to customize your vessel design and optimize it to get the best efficiency. But while doing this, they continuously partner with a shipyard to optimize the construction details and ensure smooth production. There is rarely any conflict in this partnership because the consultant and shipyard optimize different aspects of the design.
This partnership benefits everyone. The designer can provide a full suite of options to the owner. The shipyard focuses on construction details and gains competitive advantage by making the design favorable for their shipyard. You may pay slightly more at the design phase due to the shipyard’s involvement. But this investment immediately pays back in the construction phase. When considering a shipyard direct design, I encourage the alternative of a shipyard-consultant partnership. It allows a win-win situation where everyone gets to have their cake and eat it too.
It may seem that this video generated more questions than answers. Good. Questions are important. Learning which questions to ask is the first task in selecting a marine consultant. And that starts with understanding your own needs and preferences. After this video, you can clearly identify your own project needs and assess which size of consulting firm is the best fit for you.