There are a number of different Key Performance Indicators (KPIs) that are vital for the long-term success of a company. Organisations such as BIMCO release new ones on a regular basis but do people really have the time to sit down, collate all the data available and conduct further analysis to figure out how well their fleet is performing?
Fortunately, there are solutions available on the market to ease this process, doing all the calculations automatically based on reliable and up-to-date data. By unleashing the full potential of their data, companies can use KPIs to give them the crucial edge on their competition.
Due to the large amount of data available however, some companies are uncertain what they should be measuring and how they can use these powerful tools.
Hanseaticsoft, the leading maritime software provider offers the following tips for shipping companies on three KPIs they should always keep an eye on:
Recent years increasing fuel prices, depressed market conditions and environmental issues such as air emissions have brought a new perspective to ships’ fuel consumptions as well as their speed. It is no longer just about increasing fuel efficiency overall but also about how companies can increase efficiency while keeping emissions low. To reach this goal, different key figures need to be monitored closely and appropriate measures initiated if the need for action has been identified.
What is the difference between the consumptions calculated and the actual figure? What is the design speed of the vessel and how does it compare to the average speed that has been logged or captured by GPS data – also in comparison to the speed ordered by the charterer?
Might it be worth slow steaming for certain parts of a journey or even rerouting? Should the charterer be contacted, so that the ordered speed can be adjusted to achieve increased overall performance?
Keeping an eye on key data such as the different types of fuels, the ships’ speed or the weather conditions during a journey will help companies to get valuable insights into the efficiency of their fleet and help them to optimize it in the long run.
The cost of maintenance varies between 10 and 25 percent of total operating costs in most industries. The efficiency of maintenance tasks is an important factor in this as typically more than half the cost is caused by labour. Furthermore, improving maintenance efficiency has a positive impact on reliability—so companies can cut costs without risking performance.
However, efficient maintenance is not the norm. Often, companies approach maintenance reactively, meaning that jobs are scheduled when they become necessary. But instead of waiting for parts to fail, resulting in the cost of replacing them, the preventative maintenance of parts can result in a massive cost saving. By closely monitoring KPIs and looking at previous costs, a benchmark can be established to schedule jobs before it is too late.
Another factor that prevents efficiency is an uneven distribution of jobs. Some months see huge peaks of jobs where the amount of work simply can’t be done with the resources (manpower, time, spare parts) available – leading to many rescheduled jobs, while in other months, barely any jobs are done at all. Using automated reports to evaluate the distribution of tasks enables companies to easily identify peaks and lows so they can distribute them evenly.
Are companies always aware of how many jobs have been done in the month? How many have been rescheduled, approved or are overdue? Each of these could point to a potential problem.
Monitoring whether the number of jobs completed matches the number planned might be one of the best methods of identifying ways to increase overall efficiency and drive down cost.
Having this information available together in one place gives companies a critical insight into the performance and the efficiency of their maintenance tasks.
As any shipping company knows, they are only making money when their vessel is on a journey, carrying goods or being chartered by some other party. But what if for some reason their vessel is idle or not available at all? Being off hire, a vessel is costing the company money rather than earning it so this is one of the main KPIs that companies should always monitor.
As a benchmark, anything above 97% availability can be rated as a good performance. When a company’s vessels are falling below this it’s time to take a closer look to find out how they can increase availability. It might be worth considering increasing crew numbers or optimizing maintenance processes.
These core management KPIs are only a fraction of the possibilities, and each metric may go under another name in different companies. Ultimately, this simple list of management KPIs will provide an excellent basis for identifying how to reduce costs and improve efficiency in any shipping company.
For further information on unleashing the potential of your data visit www.hanseaticsoft.com
The opinions expressed herein are the author's and not necessarily those of The Xinde Marine News.
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