My last post touched on the fact that the cruise that my wife and I are on was interrupted by the ship’s broken engine between Progreso and Cozumel, Mexico. That series of adventures presented a few insights into the responsibilities of the onboard leadership versus the corporate leadership of the cruise line.

Now I feel compelled to look at this event from a totally different viewpoint – the aftermarket supply chain perspective.

My wife and I occupied the most forward suite on the 11th deck, immediately adjacent to the bridge. During daylight hours about 50% of the time as we go to/from our room, we see a crew member in a smart looking white uniform with bars on his or her epaulets going into or out from the bridge. I have asked several of these white uniformed folks (to include the Captain and Chief Engineer) a series of questions over a four-day period, and here is what I learned:

Question: What happened with our engine?

Answer: A turbocharger on one of our four engines went out and needed to be replaced.

Question: What kind of engines do we have?

Several Different Answers: Russian, Swedish, Norwegian, Italian and German. Twice I got a brand name, one sounded Polish and the other German. So who knows?

Question: What do we do about repair?

Answer: We will get it fixed in Key West, Florida.

Question: How long will it take to repair?

Answers: Anywhere from 3 hours to 2 days.

Question: Where did the repair turbocharger come from?

Three Answers: The United States, the manufacturer, but mostly "We have no idea."

Question: What is the procedure to order spare parts and what parts do you carry on the ship?

Again, Three Answers: Corporate decides, no parts on ship, but again, mostly, "We have no idea."

Question: What is the cost of mechanical failures to the cruise line and how often does the ship experience maintenance problems?

Two Answers: Either the politically correct, "Costs are very low and it almost never happens," or the more truthful, " We have no idea."

So, the conclusion I reach here is that the knowledge of the aftermarket supply chain on the cruise ship is very similar to the knowledge of the aftermarket supply chain for most technically oriented sophisticated equipment. Not much. This continues to surprise me in industry after industry.

Why does it surprise me? First of all, the costs are huge. According to the Aberdeen Group, aftermarket spare parts and service account for 8% of the annual GDP of the United States. This is over $700 billion/year in just the United States, and obviously this is a global challenge.

But back to our cruise ship for a moment. I cannot imagine the complexity of rerouting our ship, eliminating two ports and being off our original itinerary for five nights out of a 10-night cruise. In addition, the cruise line has given each guest a $150 onboard credit and a $500 future cruise credit. So, contrary to what my survey indicates, this was obviously a very expensive mechanical failure.

Secondly, the complexity of the aftermarket supply chain is great. In our aftermarket supply chain practice we include: service logistics, fulfillment services, end-of-life manufacturing, asset recovery management, refurbishment/screening, depot repair, warranty management, customer service, environmental issues, IT process management and recall management.

The issues of storage network, global transpiration, inventory planning, demand management, customs/duty, distribution center operations and global sourcing all come into play.

So, I’m really not sure what the white uniform crowd with the bars on their shoulders should know about the aftermarket supply chain, but I do know up close and personal that this topic is really important. And a nice sidenote – I even impressed my wife that I knew something useful about how to fix the boat. Next trip, I will pack a spare turbocharger.

Go!Go!Go!

Jim