shipping kpi project€¢ v. ships shipmanagement • wallem group ltd project goals to establish an...
TRANSCRIPT
Shipping KPI project
An industry initiative to enhance excellence in ship operation
Egil Rensvik,Project ManagerMARINTEK
(Norwegian Marine Technology Research Institute)
March 2007
Background
A group of leading ship owning and ship management companies agreed in November/ December 2004 to launch a project to establish unambiguous ways of measuring performance in ship operation.
The participating companies felt that the absence of an international standard for KPIs would result in each company defining, measuring, and reporting information on operational performance differently.
Consequences:– Too many different indicators (KPIs)– Opportunities for confusions and mistakes– Difficult to mobilize organizational focus on quality improvement– Additional manpower required to present the same information in many different
ways (onboard and in office)– Comparison of performance between companies not possible– An example:
Project details (per March 2007)
Project period: June 2006 – December 2008
Project budget: Approx. US$ 4 mill.
Funding: • Research Council of Norway - 40%• Participants contributions - 35%• Other sources - 25%
Participants: 21 of the world’s leading ship owning and ship management companies (see next slide)
Project responsible: Intermanager/ (Wilh. Wilhelmsen ASA)
Project manager and main research partner:
Norwegian Marine Technology Research Institute (Marintek), Trondheim
Additional research resources: • University of Singapore (NTU)• University of Trondheim (NTNU)• The Maritime University of Hong Kong
Steering Committee: • Chairman: Mr. S. Sorlie, Wilh. Wilhelmsen• Vice Chairman: R. Bajpaee, Eurasia Group• Intermanager rep.: Mr. Guy Morel, Intermanager• Project participants: Mrs. Y. Åsheim, Hoegh Fleet
Project Participants (March 2007)
• Anglo Eastern Ship Management
• B+H Equimar Singapore
• Barber Ship Management / Wilhelmsen Maritime Services
• Bergesen Worldwide Gas
• Chemikalien Seetransport
• Columbia Shipmanagement
• Dobson Fleet Management
• DS Schiffahrt GmbH
• Eurasia Group
• Fleet Management
• Hanseatic Shipping Company• Høegh Fleet Sevices• Jebsen Total Transport Solution
Services• Navigo Shipmanagers• OSM Group• Seaspan Ship Management• Stolt-Nielsen Transportation Group• Eitzen Maritime Services• Thome Ship Management• V. Ships Shipmanagement• Wallem Group Ltd
Project goals
To establish an international standard for measuring performance in ship operation (KPI’s)
and create platforms for:
• increased transparency on quality matters, safety issues and environmental performance in ship operation:
– develop frameworks for reporting of operational performance– create communication models for operational issues that is also meaningful for
stakeholders without technical/ maritime background
• enhanced governance in ship operation:– facilitate performance improvement processes (e.g. benchmarking)– further develop standardization of “best practices”
• future regulatory developments in shipping focused on “process output” regulation:
– improve the effectiveness of the ISM Code and various other process management standards being applied to operation of ships
– support a new regulatory regime of setting minimum operational standards
Participants’ commitment
• The shipping industry is often seen as being slow to respond to requirements from “Society”, and is frequently accused of having improper balance between financial, environmental, and social goals
• The participating companies want to demonstrate that they are forward looking companies that genuinely responds to the requirements for more transparency
• The project participants take responsibility for maritime safety and environmental protection and are firm believers that a regime based on self regulation is the way forward to excellence in ship operation
• Committing time and resources to this project is a demonstration of Corporate Social Responsibility (CSR) in practical terms
Main project activities
Project Management and interaction with participants
Establish project
Develop KPI Depository
Dissemination and Communication
Implementation by industry (convergence)
Develop Shipping Performance Indices
“SPI’s”Develop KPI Depository
Scientific University Cooperation
June 2006
October 2006
2007 2008 2009
KPI Depository - Features
• Contains a collection of “recommended KPIs” for measurement of operational performance in shipping
• Each KPI will be assigned:– a recommended definition
– a set of explanatory recommendations, experiences made, etc.
• Constitutes the collective “wisdom” with regard to measurement of operational performance
• Intended as a reference model for individual companies establishing (or revising) their respective performance measurement indicators
• The KPI depository will be available on the Internet at the webpage of the Shipping KPI project:
www.shipping-kpi.com
The Shipping Performance Indexes (SPI) are supported by an indicator structure
TOP DOWN PROCESS
SPI 1
KPI 1 KPI 2 KPI n
SPI 2 SPI n
KPI 3 KPI 4 KPI 5
Ship Management Report CardShip Management Report Card
KPI c KPI d
KPI a KPI b
…
BOTTUM UP PROCESS
KPI Depository - Structure
A reference model for the shipping industry with regard to measurement of performance in ship operation
A reference model for the shipping industry with regard to measurement of performance in ship operation
Indexing(reference process, stakeholder, etc)
Purpose(considerations of objective, rationale, etc)
Metrics(Validity, inaccuracies, limitations, etc.)
Review Board(observations, recommendations, etc.)
KPI – Definition(to achieve consistence and repeatability)
Application(lesson learned, suggestions, etc.)
KPI Depository - Opportunities
• Enable companies to compare (and align) own in-house performance indicators with an industry norm
• Provides opportunities for comparison and benchmarking of operational performance
• Permits more meaningful discussions about quality of operations, operational methodology, environmental impact, manpower issues, regulatory, etc.
• With sufficient support from the industry the depository could form the foundation for an international standard
• Could change regulatory efforts in shipping away from “process management” intervention and rather focus on “process outcome” regulatory requirements
KPI depository - Misconceptions
• The depository is NOT a database for capturing operational performance information from the participants
• Sharing of operational performance data is voluntary• Benchmarking is NOT compulsory and will not be done as
part of the project• The project will NOT set any “minimum operation standard”• It is voluntary for a company to align its current in-house
KPIs with the recommended KPIs in the depository• Alignment with the “recommended KPIs” in the depository
should be performed as regular revisions of the company’s quality system
Users / Stakeholders
• Who have interest in the information given by the KPI?
• Authorities (Port State, Flag State, IMO, MARPOL,…)
• Class society• Industry Associations (Intermanager, Intercargo,
Intertanko, OCIMF,…)
• Ship Management Companies• Ship Owners• Shippers• Charterers• Society (Public opinion, Local population, NGOs,…)
• Crew/personnel (including families)
KPI
User / Stakeholder
KPI standardization problem (one example)
Lost Time Injury Frequency (LTIF) rate:(Normally calculated as incidents per million manhours)
Variables:
• What is manhours?– Working hours - including or excluding overtime?– Time onboard - 24 hours or excluding time ashore?
• What is an incident?– Any injury or only injuries requiring medical treatment?– Only work related injuries?– Only incidents where work time is lost? (1hr, 8 hrs, ?)– Only incidents where signoff is the result?
KPI – development process
Development ReviewCollection
Analysis of information collected.
Compilation and structuring
of available know-how and
experience
Review developed KPI’s with regard to suitability for industry wide application
Collection of KPI’sin use from the
companies participating in the
KPI project
KPIDepository
RecommendedKPIs
• Participating Companies
• Marintek
• Participating Companies
• Marintek
• University resources
• Others
Involvement:
• KPI Review Board
KPI Review Board
The Shipping KPI Project will invite representatives from a broad range of important shipping industry stakeholders to participate in a meticulous review process before the KPIs are being recommended- and placed in the KPI depository
The Shipping KPI Project will invite representatives from a broad range of important shipping industry stakeholders to participate in a meticulous review process before the KPIs are being recommended- and placed in the KPI depository
Purpose:• Ensure the suggested KPIs are covering performance aspects that
are important for a wide range of stakeholders • Confirm the suggested KPIs are relevant and useful for their
intended purpose • Make certain that the suggested KPIs are aligned with future
compulsory or voluntary reporting schemes (e.g. GRI)• Utilize expertise outside the sphere of the “shipping professionals”• Ensure broad acceptance of the suggested KPIs through a process
of involvement and empowerment
Main project activities
Project Management and interaction with participants
Establish project
Develop KPI Depository
Dissemination and Communication
Implementation by industry (convergence)
Develop Shipping Performance Indices
“SPI’s”
Develop Shipping Performance Indices
“SPI’s”
Scientific University Cooperation
June 2006
October 2006
2007 2008 2009
Shipping Performance Indices (SPI)
Standardized KPIs provide opportunities to aggregate performance information into indices
Standardized KPIs provide opportunities to aggregate performance information into indices
SPI 1
KPI 1 KPI 2 KPI n
SPI 2 SPI n
KPI 3 KPI 4 KPI 5
KPI c KPI d
KPI a KPI b
…Shipping Performance Indices
Shipping Performance Indexes - SPI
Indexes to be considered:
• Environmental protection index • Personnel safety index • Cargo transportation effectiveness index• Statutory rules and regulations compliance index• Natural resources preservation index• Social responsibility index• ……….
• Environmental protection index • Personnel safety index • Cargo transportation effectiveness index• Statutory rules and regulations compliance index• Natural resources preservation index• Social responsibility index• ……….
SPI - opportunities
The SPI concept may open a number of opportunities:
• May create a new level of transparency in ship operational performance issues
• Enhances opportunities for discussion of important operational performance issues in shipping
• Gives more focused and efficient quality improvement processes
• Could be basis for establishment of minimum (acceptable) operational standards
• More efficient use of resources for audit, inspections, and operational follow-up
• May create a new level of transparency in ship operational performance issues
• Enhances opportunities for discussion of important operational performance issues in shipping
• Gives more focused and efficient quality improvement processes
• Could be basis for establishment of minimum (acceptable) operational standards
• More efficient use of resources for audit, inspections, and operational follow-up
Main project activities
Project Management and interaction with participants
Establish project
Develop KPI Depository
Dissemination and Communication
Implementation by industry (convergence)
Develop Shipping Performance Indices
“SPI’s”
Scientific University Cooperation
June 2006
October 2006
2007 2008 2009
Scientific University Network
• The approach in the scientific level with an University network activities focus on:– KPI standards
− Measurements – sensitivity of performance indicators, analyzes methods
− Transparency - unambiguous definition and measurement of KPIs’− Development of a framework for the KPI depository
– Communication to stakeholders – methodology and benefits– Corporate Governance – future requirements and practical
approach– Corporate Social Responsibility (CSR)– Benchmarking analysis methods and tools
• NTNU (Norway), Univ. in Hong Kong, Univ. in Singapore
Summary and conclusions
• ISM Code introduced 8 years ago – next step with KPI initiative
• Establish a framework for Shipping-KPI and Shipping Indexes to be developed
• Involvement from stakeholders• Best practice – on voluntary bases • Operational approach –vs – Pubic approach• Performance indexes selection will differ to different
stakeholders• KPI includes own parameters and 3rd party KPI delivery• International cooperation needed to achieve the objectives
More information?
[email protected]@wilhelmsen.com
[email protected]@intermanager.org
www.shipping-kpi.comwww.shipping-kpi.com
[email protected]@marintek.sintef.no
[email protected]@marintek.sintef.no
Visit us at:
KPI standardization problem (one example)
Lost Time Injury Frequency (LTIF) rate:(Normally calculated as incidents per million manhours)
Variables:
• What is manhours?– Working hours - including or excluding overtime?– Time onboard - 24 hours or excluding time ashore?
• What is an incident?– Any injury or only injuries requiring medical treatment?– Only work related injuries?– Only incidents where work time is lost? (1hr, 8 hrs, ?)– Only incidents where signoff is the result?