Shipping KPI project

Transcription

1 Shipping KPI project An industry initiative to enhance excellence in ship operation Egil Rensvik,Project Manager MARINTEK (Norwegian Marine Technology Research Institute) March 2007

2 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:

3 Project details (per March 2007) Project period: June 2006 December 2008 Project budget: Approx. US$ 4 mill. Funding: Research Council of Norway - 40% Participants: Participants contributions - 35% Other sources - 25% 21 of the world s leading ship owning and ship management companies (see next slide) Project responsible: Project manager and main research partner: Additional research resources: Steering Committee: Intermanager/ (Wilh. Wilhelmsen ASA) Norwegian Marine Technology Research Institute (Marintek), Trondheim University of Singapore (NTU) University of Trondheim (NTNU) The Maritime University of Hong Kong 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

4 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

5 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

6 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

7 Main project activities Project Management and interaction with participants Establish project Develop KPI Depository Dissemination and Communication Develop Shipping Performance Indices SPI s Implementation by industry (convergence) Scientific University Cooperation June 2006 October

8 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:

9 The Shipping Performance Indexes (SPI) are supported by an indicator structure TOP DOWN PROCESS Ship Management Report Card SPI 1 SPI 2 SPI n KPI 1 KPI 2 KPI n KPI a KPI b KPI 3 KPI 4 KPI 5 KPI c KPI d BOTTUM UP PROCESS

10 KPI Depository - Structure A reference model model for for the the shipping industry with with regard regard to to measurement of of performance in in ship ship operation KPI Definition (to achieve consistence and repeatability) Indexing reference process, stakeholder, etc) Review Board (observations, recommendations, etc.) Purpose (considerations of objective, rationale, etc) Application (lesson learned, suggestions, etc.) Metrics (Validity, inaccuracies, limitations, etc.)

11 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

12 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

13 Users / Stakeholders User / Stakeholder KPI 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)

14 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?

15 KPI development process Collection Development Review Collection of KPI s in use from the companies participating in the KPI project 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 KPI Depository Recommended KPIs Involvement: Participating Companies Participating Companies KPI Review Board Marintek Marintek University resources Others

16 KPI Review Board The The Shipping KPI KPI Project will will invite representatives from a broad range of of important shipping industry stakeholders to to participate in in a meticulous review process before the the KPIs are are being recommended- and and placed in in the the KPI 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

17 Main project activities Project Management and interaction with participants Establish project Develop Shipping Develop KPI Depository Performance Indices SPI s Dissemination and Communication Implementation by industry (convergence) Scientific University Cooperation June 2006 October

18 Shipping Performance Indices (SPI) Standardized KPIs KPIsprovide opportunities to to aggregate performance information into into indices Shipping Performance Indices SPI 1 SPI 2 SPI n KPI 1 KPI 2 KPI n KPI a KPI b KPI 3 KPI 4 KPI 5 KPI c KPI d

19 Shipping Performance Indexes - SPI Indexes to be considered: Environmental protection index Personnel safety index Cargo transportation effectiveness index Statutory rules and and regulations compliance index Natural resources preservation index Social responsibility index.

20 SPI - opportunities The SPI concept may open a number of opportunities: May May create a new new level of of transparency in in ship ship operational performance issues Enhances opportunities for for discussion of of important operational performance issues in in shipping Gives more focused and and efficient quality improvement processes Could be be basis for for establishment of of minimum (acceptable) operational standards More efficient use use of of resources for for audit, inspections, and and operational follow-up

21 Main project activities Project Management and interaction with participants Establish project Develop KPI Depository Dissemination and Communication Develop Shipping Performance Indices SPI s Implementation by industry (convergence) Scientific University Cooperation June 2006 October

22 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

23 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

24 More information? Visit us at:

25 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?