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Shipping KPI Project
External Stakeholders Workshop
Baltic ExchangeBaltic Exchange St Mary AxeSt Mary Axe
LondonLondon
September 23September 23rdrd 20092009
Work items of the workshop
• Brief introduction to the Shipping KPI Standard
• Stakeholders potential utilisation of KPIs
• Discussion of stakeholders requirements to KPI/PI
• Discussion of selected KPI/PI definitions
The KPI Project objectives
In order to:
• boost performance improvements
• provide an efficient communication platform of ship operation performance information to internal and external stakeholders
Develop tools to measure company and vessel performance and get these recognized as “the Standard of the Industry”
Develop tools to measure company and vessel performanceDevelop tools to measure company and vessel performance and get these recognized as and get these recognized as ““the Standard of the Industrythe Standard of the Industry””
What the Shipping KPI project is:
Creation of an industry standard to develop:
• An instrument to improve performance in shipping
• A tool to self improve
• A tool for a constructive benchmarking of industry performances
• A tool to improve transparency
• A tool to facilitate more effective communication on operational performance
Shipping KPI Phase 2 WG Members
Odd Are Sletten Aboitiz Jebsen Ship Management
John-Christen Jensen
Wilhelmsen Shipmanagement
Bill Lunn Bernhard Schulte Shipmanagement
Dietrich Wulff Columbia Shipmanagement
David McFarlane ConsultISM Ltd
Ranjith Cheerath EMS Ship Management
David Turner Meridian Marine
Sanjay Mittal PB Maritime
Tarald Nomeland Hoegh Fleet Services
Stig Romby Nielsen Maersk Shipping
Terry Cornick Maersk Marine ServicesAlexandre Albertini
Marfin Management S.A.M.
Girish Mandlik NYK Shipmanagement Singapore
Hemant Pathania NYK Shipmanagement Singapore
Jude Correa Seaspan Ship Management
Peter Curtis Seaspan Ship Management
Bjorn Hojgaard Thome Ship Management Singapore
Athanasios Rozakis
Tsakos Shipping & Trading
Simon Pressly V.Group
Utilisation of the Shipping KPI Standard
• Internal improvement
• Fleet/industry benchmarking
• External communication
• Used in relation to TMSA - evidence tracking
• Performance based contracting
• Building public opinion
• Measuring policy and regulatory implementation effects
KPI development
Step 3Step 2Step 1
Stakeholder information requirement analysis
Phase 1:KPIs in use
MT Research group
MT Expert group
Ship Mgmt.Professionals
reuse
Stakeholders Areas of interest
KPI proposals
SPI proposals
KPI review board
KPI depository
Stakeholder Interaction / Validation
• Step 1: Evaluation of existing Industry KPIs• Step 2: Researchers & KPI working group iterative process
−
4 workshops conducted−
Document exchanges / reviews
• Step 3: Stakeholder Involvement and Dissemination
Applying theory
Application of theory to develop the Shipping KPI Model
+Industry KPIs+KPI Definitions
Validating and balancing the indicators
Ship conditionShip stabilityCrew training level Ship safetyVoyage safety
Cargo safetyCrew safety Crew and cargo safety Operational safety
Criminal eventsSecurity event (delays before berthing) Security
Humanitarian eventsOperational events Operational delays
Crew, ship and cargo readinessPaperwork delays Crew and documantation Timeliness of operations Safe, secure and cost-efficient operation
Statutory inspection induced delayOther inspection induced delay Vessel readiness
Value of ship managers operationsInitial costing levelsBudget variation Cost contolUnscheduled off-hire time
Budgeting and informationInternal informationExternal information Management information
New build supervisionSystem development Technical consulting
Other ship servicesShip survey and inspectionMaintenance of classification Ship services
Crew behaviourReputation of the company Crew & company performance
Reputation Reputation Liquid dischargeAir pollution Environmental performanceGarbage pollution
Creating a aggregation hierarchy
Identifying Stakeholder needs
Creating the mathematical model
Publishing the Shipping KPI Standard
Own development
Role
SPI
KPIs
PIs
Legislator
HR performance
Crew Planning
Crew Management
Lost Time Sickness
Officers retention
rate
Number of cadets per
vessel
Stakeholders
Politicians Port State Coastal StateFlag State
International Authorities
Multi-National Governmental Organisations
Non-complete mapping due to visual reasons
The role will also have interest in other SPIs but only one SPI is shown
Crew training
Not on time relief
of crew
Manning Level
Man-hours onboard vessel
Other roles (hence other stakeholders) will also have interest in the SPI but only one role is shown
Example of stakeholder mapping: HR Performance SPI
Crew behavior
External complaints against personnel
HR deficiencies
The Shipping KPI Standard - Concept
SPI
PI
Extended Balanced Score Card for internal improvement
Corporate measurements
Aggregated indexes for external communication
Proc
esse
s
Cus
tom
er
Lear
ning
HSE OthersFinancial
KPI
The Shipping KPI Standard - SPIs
• Environmental performance• HR performance• Safety performance• Security performance • Technical Performance• Navigation Performance• Operational Performance
• Environmental performance• HR performance• Safety performance• Security performance • Technical Performance• Navigation Performance• Operational Performance
The Shipping KPI Standard - KPIs
• Accidental releases of substanses as def by MARPOL• Ballast Water Discharge Violations• Budget control per vessel• Cargo incidents during cargo operations• Cargo incidents during voyage• CO2 emission performance• Condition of Class• Contained Spills• Crew behaviour• Crew management• Crew planning• Drydocking Planning Performance• Environmental deficiencies• Failure of critical equipment and systems• Fire and Explosions
• Accidental releases of substanses as def by MARPOL• Ballast Water Discharge Violations• Budget control per vessel• Cargo incidents during cargo operations• Cargo incidents during voyage• CO2 emission performance• Condition of Class• Contained Spills• Crew behaviour• Crew management• Crew planning• Drydocking Planning Performance• Environmental deficiencies• Failure of critical equipment and systems• Fire and Explosions
• Flawless Port state control performance• HR deficiencies• Lost Time Injuries Frequency • Lost Time Sickness Frequency• Navigational deficiencies• Navigational Incidents• NOx emission performance• Operational deficiencies• Port state control deficiency rate• Port state control detention• Safety deficiencies• Security deficiencies• SOx emission performance• Vessel availabilty• Violations of MARPOL
• Flawless Port state control performance• HR deficiencies• Lost Time Injuries Frequency • Lost Time Sickness Frequency• Navigational deficiencies• Navigational Incidents• NOx emission performance• Operational deficiencies• Port state control deficiency rate• Port state control detention• Safety deficiencies• Security deficiencies• SOx emission performance• Vessel availabilty• Violations of MARPOL
The Shipping KPI Standard - PIs
• Absconded crew• Actual drydocking costs• Actual drydocking duration• Actual off-hire• Actual running Costs and Accruals • Agreed drydocking costs• Agreed drydocking duration• Allision• Average number of vessel under
management • Ballast water violations• Collision• Condition of class• Criminal offence• Drug/alcohol abused• Emitted Mass CO2• Emitted Mass NOx• Emitted Mass SOx• Environmental deficiencies• Failure of critical equipment and systems• Fatalities due to injuries• Fatalities due to sickness• Grounding
• Absconded crew• Actual drydocking costs• Actual drydocking duration• Actual off-hire• Actual running Costs and Accruals • Agreed drydocking costs• Agreed drydocking duration• Allision• Average number of vessel under
management• Ballast water violations• Collision• Condition of class• Criminal offence• Drug/alcohol abused• Emitted Mass CO2• Emitted Mass NOx• Emitted Mass SOx• Environmental deficiencies• Failure of critical equipment and systems• Fatalities due to injuries• Fatalities due to sickness• Grounding
• HR deficiencies• Lost Workday Cases• No of crew not relieved on time• No of dismissed crew• No of logged warnings• No of violations of MARPOL Annex 1-6• Number of cases where a crew member is
sick for more than 24 hours • Number of new cadets• Officer working days• Officers retention rate• Permanent Total Disabilities• Permanent Partial Disabilities• Planned off-hire• PSC inspections resulting in zero
deficiencies • Severe spills of bulk liquid• Total Exposure Hours• Total no of contained spills of bulk liquid• Total number of accidental releases of
substances covered by MARPOL, to the environment
• Total number of cargo units/passengers transported
• HR deficiencies• Lost Workday Cases• No of crew not relieved on time• No of dismissed crew• No of logged warnings• No of violations of MARPOL Annex 1-6• Number of cases where a crew member is
sick for more than 24 hours• Number of new cadets• Officer working days• Officers retention rate• Permanent Total Disabilities• Permanent Partial Disabilities• Planned off-hire• PSC inspections resulting in zero
deficiencies• Severe spills of bulk liquid• Total Exposure Hours• Total no of contained spills of bulk liquid• Total number of accidental releases of
substances covered by MARPOL, to the environment
• Total number of cargo units/passengers transported
• Total number of damaged or lost cargo units/passengers injured during cargo handling
• Total number of damaged or lost cargo units/passengers injured during voyage
• Total number of explosion incidents• Total number of fire incidents• Total number of navigational related
deficiencies • Total number of operational related
deficiencies • Total number of port state control
inspections • Total number of PSC deficiencies• Total number of PSC inspections resulting in
a detention • Total number of recorded external
inspections • Total number of safety related deficiencies• Total number of security related deficiencies• Training days• Transport Work• Vessel running cost budget• Violation of rest hours• AAE (Additional Authorized Expense)
• Total number of damaged or lost cargo units/passengers injured during cargo handling
• Total number of damaged or lost cargo units/passengers injured during voyage
• Total number of explosion incidents• Total number of fire incidents• Total number of navigational related
deficiencies• Total number of operational related
deficiencies• Total number of port state control
inspections• Total number of PSC deficiencies• Total number of PSC inspections resulting in
a detention• Total number of recorded external
inspections• Total number of safety related deficiencies• Total number of security related deficiencies• Training days• Transport Work• Vessel running cost budget• Violation of rest hours• AAE (Additional Authorized Expense)
The SPI Matching matrix
SPIs/KPIs Envir
onmen
tal
HR Safety
Securit
yTe
chnical
Naviga
tion
Operatio
nal
Crew management L H L L L L LViolations of MARPOL H L LFailure of critical equipment and systems L L H L LCargo incidents during cargo operations L L L L HCrew planning L H L L L L LLost Time Sickness Frequency HCO2 emission performance H L LNOx emission performance H L LSOx emission performance H L LCrew behaviour H L LBallast Water Discharge Violations H LVessel availabilty L L HBudget control per vessel HPort state control deficiency rateCargo incidents during voyage L L L L HPort state control detention L L L L HLost Time Injuries Frequency L HFlawless Port state control performance L H L L LAccidental releases of substanses as def by MARPOL H L LContained Spills H L LNavigational Incidents L L L L H LCondition of Class HEnvironmental deficiencies HHR deficiencies HSecurity deficiencies HOperational deficiencies HSafety deficiencies HNavigational deficiencies HFuel Efficiency L HDrydocking Planning Performance HFire and Explosions H
The Concept of the Shipping KPI Standard
SPI
PI
Pro
cess
es
Cus
tom
er
Lear
ning
HS
E
OthersFinancial
KPI
PI – textual definitions of measurements (PI Values) and guidelines for data collection
SPI – mathematical definitions (linear calculation using weighted sum of KPI Ratings)
KPI – mathematical definitions based on the PI Values. Two concepts are defined
The KPI Value (natural number calculated directly from PI Values)
The KPI Rating bringing the KPI Value into a 0-100 range)
KPI: Cargo incidents during cargo operationsThe total number of received claims concerning damaged or lost cargo or injured passengers during cargo operations in a calendar year. Made relative to the total number of cargo units transported in a calendar year. Measured per vessel for internal improvement as well as external communication (input to SPIs)
Relevant PIs:•Total number of damaged or lost cargo units or passengers injured during cargo handling•Total number of cargo units or passengers transported
KPI Value Formula=
Total number of damaged or lost cargo units or passengers injured during cargo handlingTotal number of cargo units or passengers transported
KPI Rating Formula= 100-(Z*KPI Value)
Rating Parameters: Z= 100000
This KPI represents a ratio between the total quantity of damaged or lost cargo or injured passengers (during handling operations such as loading cargo or boarding passengers) relative to the total quantity of cargo or number of passengers handled in a calendar year. By defining the KPI as a ratio, benchmarking is feasible even between different vessel sizes.
KPI: Cargo incidents during cargo operationsCalculation Example
Relevant PIs:•Total number of damaged or lost cargo units or passengers injured during cargo handling 4•Total number of cargo units or passengers transported 150.000
KPI Value Formula=
Total number of damaged or lost cargo units or passengers injured during cargo handlingTotal number of cargo units or passengers transported
KPI Value Formula = 4/150000 = 2,67*10-5 =26,7*10-6 = 26,7ppm
KPI Rating Formula= 100-(Z*KPI Value) = 100 – (105*2,6*10-5) = 100 – 2,6 = 97,4
Rating Parameters: Z= 100000 = 105
A KPI Value of 0,001 will give zero rating, 1000 units destroyed out of one million transported, or a damaging rate of 1000ppm
Two Strategies for Scaling KPIs are applied
KPI Formula Rating scaling factor
Ballast Water Discharge Violations =∑
Ballast water discharge violations0 = 100 rating 1 = 50 rating > 1 = 0 rating
Crew planning = A*No of crew not relieved on time + B*Violation of rest hours
= 100-(z*KPI Value)
Number of Violations
KPI
100
50
1 2
Ballast Water Discharge Violations
KPI Value
KPI
100
50
5 10
Crew Planning
Z=10
A=1
B=1
SPI Calculation (example)SPI Name SPI Formula (with weighting of KPIs)
Navigational Performance= (L*(Crew management + Failures of critical equipment and systems + Crew planning)
+ H*(Navigational incidents + Navigational deficiencies))/SUM LH
Environmental Performance
= (L*(Crew management + Failures to critical equipment and systems + Cargo incidents during cargo operations + Crew planning + Cargo incidents during voyage + Port state control detention + Flawless port state control performance + Navigational incidents)+ H*(Violations of MARPOL + CO2 emission performance + NOx emission performance + SOx emission performance + Ballast water discharge violations + Accidental releases of substances as def by MARPOL + Contained spills + Environmental deficiencies))/SUM LH
∑∑ ∑+
=HandL
weightHwithKPIsHweightLwithKPIsLSPI
________
The weighting factors proposed are: L = 1
H = 3
The weighting factors proposed are: L = 1
H = 3
Validation work in progress 1/2
• Definitions:– KPI Working Group will perform three sessions in 2009 and in
2010 validating:−
The PI descriptions−
PI data capture feasibility−
The KPI descriptions−
The KPI value calculation formula−
The KPI rating formulas (z-value scaling)−
The SPI weighting formulas– External stakeholders are invited to two workshops in 2009
and will be invited to two workshops in 2010 validating:−
The PI descriptions−
The KPI descriptions−
The KPI rating formulas−
The SPI weighting formulas
Validation work in progress 2/2
• KPI Working Group members are collecting data from three vessels (PI values for all quarters in 2009-2010), this is used to:
−
Evaluate data capture feasibility−
Perform sensitivity analysis on KPI and SPI sensitivity of PI−
Perform sensitivity analysis on SPI sensitivity of KPI−
Evaluation of natural spread of PI determining better values for the rating parameter z and weighting factors
– To calculate some benchmarks for the participating companies−
To evaluate the required meta data used to characterise each vessel reporting data into the database
−
Evaluate the requirements for benchmarking application
A conceptual model for the Shipping KPI Database System
Corporate SW(3rd party)
Shipping KPIDatabase SystemShipping KPI
Database System
Corporate end-user
Corporate end-user
Shipping KPIWeb client
XML PI report
XML Benchmark report
Shipping KPIDepository
Shipping KPIDepository
Web client
Generalend-user
Free use
Transactional Cost?
www.shippingwww.shipping--kpi.comkpi.com””www.shippingwww.shipping--dB.orgdB.org””
A benchmarking application/service
• Benchmarking is comparing:
– Ship vs ship
– Ship vs fleet
– Fleet vs fleet
• Fleet is here a general concept which allow comparison of user defined selections of data
• Strict security system are applied to secure anonymity and confidentiality of data.
Environmental Performance - MS Olivia
Absolute Contribution to Environmental Performance Reduction
http://raga3.marintek.sintef.no/TOCC/Admin/
Industry Benchmark