The Shipping KPI project Status and conclusions from the Lloyd’s List Conference Limassol, Cyprus Egil Rensvik, Torkel Fyrvik MARINTEK (Norwegian Marine Research Institute) and Svein Sorlie, Wilh.Wilhelmsen, ASA

Content Status of the Shipping KPI project Presentations at the Lloyds List Conference 12th October Workshop – discussions

The main project activities Project period: June 2006 – December 2008 Implementation will be performed by the individual companies (Performance Indicators system revision) Project Management and Interaction with participants Establish project Develop KPI Depository Dissemination and Communication Implementation by industry (convergence) Develop SPI & Report Card June 2006 October

Step 1: Develop KPI Depository Find the balance between the political, rational and emotional process – Create industry wide “ownership” to the concept vs. deliver tangible progress (KPI’s) for the project participants (find a solution to the “not-invented-here-syndrome”) “Bottom-up” approach. KPI depository (and KPI hierarchy) developed based on current use of KPIs Activities & Deliverables: – Depository structure – Mapping of KPIs used in ship management today – Alignment and refinement of KPIs – Discussion of parameter characteristics – Recommended KPI’s with definitions – Guidelines for data reporting/capturing

Activities next 6 months Individual discussions with stakeholders and interest organizations – TMSA / OCIMF – Intertanko – BIMCO – etc Regional workshops Nov 2006 – April 2007 – Singapore – Hamburg – London – US East coast – Tokyo – Dubai – Hong Kong Establishment of the Steering Committee Dissemination – Interactive communication with participants/ stakeholder – Participation at conferences – Articles in professional magazines and publications – WEB site / Depository

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The Shipping KPI project Conclusions from the Lloyds List Conference Limassol, Cyprus

KPIs: What they are and what they are not! Do we need KPIs? What constitutes a good KPI? Sharing KPI information outside our own companies: possible problems Common methods of measuring KPIs Intermanager’s KPI project: looking at reasons why the industry needs to set common KPIs Key Performance Indicators By Captain Bill Lunn

The Shipping KPI Project … a joint industry initiative for excellence in ship management … Svein Sorlie, Wilh. Wilhelmsen ASA Egil Rensvik, MARINTEK Lloyds Ship Management Conference 2006 Limassol, Cyprus

Contents Background and project establishment Project idea Challenges and opportunities Objectives Participants – Sponsor group Commitment Next steps

Workshop purpose KPI in your organization – focus, – use and – need for development Depository discussion – How should the depository look? – What is the content? – How will/should it be used? – Identify important KPIs AS-IS mapping of KPI’s – contacts – Separate meeting – Arrange regional workshop

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

The Shipping KPI project Summary of Limassol workshop

Workshop purpose KPI in your organization – focus, – use and – need for development Depository discussion – How should the depository look? – What is the content? – How will/should it be used? – Identify important KPIs AS-IS mapping of KPI’s – contacts – Separate meeting – Arrange regional workshop

Conclusions The audience expressed enthusiasm about the project and the objectives. Both conference delegates and workshop participants The project need to be more clear on scope – We are creating a system/tool for performance measurement and reporting – We are not creating a database for recording of performance – The project creates a basis for such a database and possible benchmarking – Common performance databases and benchmarking services will/may be post project activities/objectives.

Conclusions How will we relate to TMSA? – We are looking at the process output while TMSA looks more at the process management. There should be no conflict between the two. Performance Indicators exist on all levels. – A Key Performance Indicator is an indicator you have chosen because it means more for YOU. The project is a lot about communication. – We create a common language for the industry exchange information on performance The main challenge is to gain support from all stakeholders – Without a industry wide acceptance the project will not succeed.

The KPIs will have different objectives on different arenas Improved reputation (towards public opinion) – Awareness of performance measurement importance and documentation of active involvement in developing standard KPIs – Enhanced transparency about ship operation issues Improved performance (within shipping companies) – Enhanced alignment between strategic objectives and performance measured – Increased ability to align own objectives and stakeholders requirements – Documentation of performance Standardized Shipping Performance Indexes (shipping community) – Unambiguous definitions of performance measures – Internationally accepted standards between stakeholders – Proactive development of shipping quality standard Capture best practices – Enable the leaders to excel and the followers to improve Self regulation is a defense against over-regulation