Transcript 08_David Trueman

PERFORMANCE ANALYSIS AND BENCHMARKING FOR BULK OPERATIONS
David Trueman
[email protected]
00 44 7785 707483
Key Performance Indicators
Almost all businesses use KPIs in some form to measure their
performance
The simplest (and most important) measure of performance for most
businesses is the Profit and Loss sheet in the annual accounts
Operational Performance
 Most managers understand how their Terminal operates and what
constitutes good practice and performance
 This is often based upon rule of thumb, historical experience or the
assumption that “everyone is doing their best and nobody is
complaining”
Why Use KPIs?
Source: AberdeenGroup, March 2006
Pressure to improve operational performance
67%
Competitive advantage in price and service
45%
Customers demanding shorter order cycle time
44%
Customers demanding reduced prices
34%
Corporate objective to reduce inventory
29%
Pressure to improve return-on-invested-capital
26%
Increase product quality
0%
23%
20%
40%
60%
80%
100%
Making KPIs Effective
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For KPIs to be effective they need to reflect the goals of the business
It is rarely about financial metrics, KPIs are a communication and steering mechanism for
management to bring about operational improvements through shared goals
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KPI characteristics:
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A KPI should echo an organisational goal
It should be decided by management
It creates understanding on all organisational levels
It is based on real data
It should be easy to understand
It should lead to action
It should improve performance
Take action to
improve
performance
Map Impacts
and set
priorities
Understand
the results
Chose
indicators and
understand
data needs
Evaluate the
product
Assess the
operations
Measure
inputs used in
operations
Measure
Good and Bad Data
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Bad Data Source
Good Data Source
Just because Excel is good for manipulating data it doesn’t make it a good KPI tool. It is about
where the data came from and how
Using Bad Data Leads to Failure
Hand Written or Spread Sheet Shift Reports/Tally Sheets have been found to be almost always
inaccurate because:
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Data (information) is often written after the fact with incorrect times/quantities
Root cause can be anecdotal (the circuit breaker tripped rather than what caused it to
trip)
The writer edits the data to reflect what they want others to see rather than what
happened (hatch change took five minutes but a simultaneous tea break took ten)
If data is too difficult to collect it becomes a chore and is less likely to be sustainable or
accurate
Good Data and How To Get It
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Typical
 Real Time Data Sources are the Way Forward
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TOS
Automation
Weighing
ERP
3rd Party
Android
DATA
DATA
DATA
 Data automatically collated – little / no manual entry
• Eliminates user error and provides fast accurate data
ANALYSIS
ANALYSIS
 Real time KPI’s
• Always on and never out of date
REVIEW
REVIEW
ACTION
 System Based Processing and Data Mining
• Fact based decision making
• ‘One version of the truth’
Ideal
ACTION
Too much time
before
Analysis and Review
Causes disconnected
Action
System Based
Analysis and Review
allows for
Connected and
Effective Action
Operational Dashboards Based on Real Time Data
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The screen here provides users with a real time view of the vessel discharge based on
data from weighing and automation systems:
Monitoring Vessel Discharge Against Contract Terms

Here the data is collated with the contractual terms to provide a real time view of
performance:
Using Accurate Data
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Stoppages
KPI Reports
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Vessel Information
KPI Reports
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Vessel Information
KPI Reports
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Overall Equipment Effectiveness
Berth Plans and Forecasts
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Stock Forecasts
KPI Reports
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Space Availability
KPI Reports
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Terminal Throughput
KPI Reports
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Feed Rates
KPI Reports
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Time In Store
KPI Reports
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Road Vehicle Statistics
Benchmarking
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The container business has recognised the benefits of industry benchmarking and data is
readily available to allow terminal operators to compare themselves with industry
standards
The bulk industry appears to be reluctant to share information to allow performance
benchmarks to be established
An initiative by the Dry Bulk Terminals Group to establish Overall Equipment Effectiveness
as a global benchmark was poorly received by members even though the findings of a trial
by five terminals proved successful.
It is good to see that the group have reassumed a benchmarking initiative at their latest
meetings, however it appears that nervousness regarding the sharing of data may
override the prospective benefits for the industry
Multi-Industry benchmarks such as OEE are globally accepted standards for operational
and manufacturing excellence because of their consistency. OEE is a reliable comparison
of performance no matter how different the processes or activities and the industry and
all stakeholders would benefit from the improvements that would be derived.
How OEE can Improve a Business and Our Industry
 OEE is an industry wide standard for measuring and continuously improving
operational performance
 By using consistent measurement of reliable data performance can be analysed,
best practice identified and improvements implemented
How to derive OEE?
Schematic representation of impact of losses on
Plant Performance
Total Planned Plant Operating Time
Breakdowns,
Setup
Adjustments
Actual Production Time
Small Stops,
Reduced
Speed
Net Production Time
Valuable Production Time
Industrial Automation Practice
Frost & Sullivan, 2005
Startup &
Production
Rejects
6 Key Losses
Planned
Shutdown
Planned Production Time
What does improving OEE mean?
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Improving the effectiveness of your operation
Improve Availability >> Less downtime >> more production time
Improve Performance >> Improved capability >> higher sustainable rates
Sustained production flow
Lower consumables consumption (energy)
Avoid capital investment >> Lower bottom line cost
OEE for Vessel Discharge
The OEE Calculation is:
Actual Availability X Productivity (TPH Achieved) = OEE
Planned Availability
Maximum Equipment Capability
Example
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In theory, at 60% occupancy, this would create the capacity to discharge an additional
528,666 tonnes per year. If the profit on discharging vessels was 50 cents per tonne this
would generate $264.333.00 in additional profit
This is theoretical but the principle is clear; small incremental performance improvements
can radically improve the bottom line of the business
Conclusion
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Using KPIs in Bulk Terminals allows operators to create an environment of continuous
improvement
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Small gains in productivity or space utilisation can create large improvements to the
financial bottom line
KPIs are only effective if the data is easily available, consistent and believable
OEE is a trans-industry benchmark providing consistent comparisons regardless of
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differences in process
Industry standard benchmarking would help drive improvements across the industry and
provide guidelines for new terminals in developing markets
Thank you
DBIS (Software and Automation) Ltd
CommTrac Terminal Management
www.dbis.biz