Transcript ISM Code – phase II ++++ Standard for operational Key

Standard for operational
Key Performance Indicators
(KPIs)
An Industry Initiative
for excellence in ship management
June 2005
Use of KPIs in shipping
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The need for KPIs are a consequence of
continuous improvement processes embedded
both in the ISM Code and ISO 9000:2000
Responsible ship managers have developed
company specific KPIs to support their quality
improvement processes
Driven also by the changes taking places in
other industries where focus is shifting from
detailed process regulation to goal based
regulation (outcome)
The Ship Manager’s challenge
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Reporting of KPIs will be required by owners,
charterers, oil majors, insurance companies,
P& I clubs, Port state authorities (incl. individual
ports), Flag state authorities, etc.
Each “stakeholder” will develop his own
definition for how KPIs should be collected,
calculated and reported
Too many KPIs will be requested
KPI standardization problem
(one example)
Lost Time Injury (LTI) rate:
(Normally calculated as incidents per million manhours)
Variables:
 What is manhours?
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What is an incident?
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Working hours including or excluding overtime?
Time onboard (24 hours) or excluding time ashore?
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?
Consequences - worst case?
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Additional manpower required to present the same information
in many different ways
Extensive data collection and reporting requirements on vessel
and crew
Opportunities for confusion and mistakes leading to
misrepresentation of facts
Difficult to mobilize organizational focus on the right issues
Inability by stake holders to compare reports from different
organizations
Quality improvement efforts “strangled” by red tape
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Preferred scenario
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That the shipping industry will operate on a common
standard for measuring, calculating and reporting Key
Performance Indicators (KPIs).
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An acceptance by all stakeholders that performance in
ship operation can be adequately established with a
limited number of Key Performance Indicators (KPIs)
Self regulation is the preferred solution!
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The main challenge:
To agree on a set of KPIs that:
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gives a representative picture of the quality of the
ship’s operational performance, and is
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limited in number
uniquely defined
transparent
economic to collect
No pan-industry agreement can be reached without a
tool to measure the “value” of the various contributing
factors to safety and environmental protection
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How to establish consensus?
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One way forward is to use methodologies capable of
measuring value of different contributing factors as
perceived by multiple stakeholders to rank the
importance of such attributes for safety, quality and
environmental protection
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The Conjoint Value Hierarchy (CVH) methodology
developed by Intellectual Capital Services, Ltd. is one
such methodology capable to perform “multi attribute/
multi stakeholder” value measurements
The CVH methodology - Pilot Project
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Best practice guidelines launched by ISMA in 2004
Pilot initiated in January 2005
Supported by 18 leading ship management and ship
owning companies (the Sponsor Group)
Conducted with resources from the Sponsor Group under
the guidance of Intellectual Capital Services, Ltd
Pilot study concluded in April 2005
Findings:
The pilot project indicated good correlation between the output
from the CVH process and what representatives from the Sponsor
Group considered to be prime attributes for operational excellence
in ship management
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The Sponsor Group
Anglo Eastern Ship Management
Ltd.
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Barber Ship Management /
Wilhelmsen Maritime Services AS
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Chemikalien Seetransport GmbH
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Columbia Shipmanagement Ltd.
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Dobson Fleet Management Ltd.
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DS Schiffahrt GmbH
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Eurasia Group
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Fleet Management Ltd.
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Hanseatic Shipping Company Ltd.
Jebsen Management AS
Navigo Management Co.
OSM Group AS
Stolt-Nielsen Transportation Group B.V.
TESMA Holding
Thome Ship Management Pte. Ltd.
V. Ships Shipmanagement/
V. Ships Inc.
Viken Ship Management AS
Wallem Group Ltd
CVH Pilot Project - Conclusion
The CVH methodology has potential to become
an instrument for establishing consensus
among important stakeholders on a “Standard
for operational KPIs”.
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The way forward
The Sponsor Group decided to communicate the
findings and the conclusions of the pilot project to other
stakeholders in international shipping with the aim of
establishing an industry driven process for developing
a “Standard for operational KPIs”
The communication process will be spearheaded by
International Ship Managers’ Association, but each
Sponsor Group company will utilize its own market
network to gather support for a “KPI Standard”
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Communication model
Main strategy: Broad Involvement
Parties to involve:
– Universities and research organizations
– Class societies, standardization org. (ISO)
– Maritime authorities
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International level (IMO, EU, others)
National level (Port States, Flag States, others)
Industry organizations (ICS, INTERTANKO, others.)
Major stakeholders (Oil majors, OCIMF, others.)
Management consultants
An important contribution to safety!
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Increases transparency
Puts focus on improvement processes
Enables more targeted safety inspections
and operational follow-up
Allows benchmarking and value
comparison
Enables evolving of minimum acceptable
performance standards in shipping