KPI (Key Performance Indicator) is the measure of performance and evaluates the success of an organization. All shipping companies set their own performance measurements & goal, and endeavour to fulfil it during the period which is usually yearly. These are analysed monthly, quarterly, half yearly and annually.
The set of required index, measurements and observations are known as Shipping Performance Index, Key Performance Index and Performance Index.
Shipping performance index – The functions are identified where company decides to measure the performance. These function in a shipping company are usually area of field in which company is performing, these are Technical, Health and safety, Navigational, Crewing or HR, Operational and Environment performance.
KPI (Key performance Indicator) – Each functions or Ship Performance Index are grouped by set of relevant KPIs. For example, safety function can be divided into incidents, accidents, fire, health and port state inspection performance.
PI (Performance Indicator) – The PIs are measurable indicators which combined together over a period to give set of results for KPIs. Example of PIs can be emitted mass of SOx, NOX, CO2, number of fatal injuries, number of stoppages due to technical issues, number of navigational incidents, number of port state control deficiencies etc.
At present most of the companies are using KPI as self improvement tool and performance measurements are only within the organization.
Present problem in setting KPIs;
- Individual shipping companies may or may not set all KPIs in their annual measurable list,
- KPIs depends on what priorities company has and what they want to improve.
- It cannot be compared with peer group i.e. other shipping companies.
- No data available to indicate the performance of other organisation.
- No industry benchmarking on KPI.
BIMCO has launched Shipping KPI (Key performance indicator) System which is new start for shipping industry to benchmarks the performance of Ship, fleet and industry. As per information from Bimco, it has been developed with the help of 20 shipping related companies. Key features of this tool are;
- It has 64 different performance indicators (PIs) based on various measurements related to KPIs. List is provided in below link of Shipping KPI.
- Set of performance Indicators (PIs) are combined to make 33 KPIs. List is provided on below link of Shipping KPI.
- A set of KPIs combined to make Shipping Performance Index (SPI), there are 7 SPIs defined. These are; Navigational, Health & Safety, Environmental, HR management, Operational, Security, Technical and others.
- It provides an accurate comparison of ships
- Various shipping companies has to agree to provide relevant true data.
- Data are protected and anonymous.
- It will boost performance improvement of companies by comparing themselves with peer.
What can go wrong with company internal KPI? – “Companies can actually think these are often – non sense – companies constantly adjusted how KPI were measured. Not to improve performance etc -but to get better KPI readings to use in crew bidding etc.”
One of many good ideas that needs to be closely examined ! Near Miss reporting is also twisted to a ridiculous levels to meet Management concept rather than as a real learning tool.
We expect a fair KPI reporting for the industry learning and performance improvement. If reporting from each shipping companies are true then we believe that industry will gain from the BIMCO initiative.