There is a variety of different Key Performance Indicators (KPIs) that are vital for the long-term success of a company. Organisations such as the BIMCO release new ones on a constant basis but do you have the time to sit down, collect all the various data flying around and conduct further analysis to figure out how well your fleet is performing?
Fortunately, there are solutions available in the market to help you ease this process, automatically doing all the calculations for you and all based on reliable and up-to-date data. Due to the great number of key figures that are available, some companies are uncertain about what they should be measuring and how they can use these powerful tools.
Here are the three KPIs that you should always have 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. With this, it is no longer only about increasing your fuel efficiency overall but also about how you can increase efficiency while keeping emissions low. To reach this goal, different key figures need to be monitored closely and appropriate measures have to be initiated if a need for action has been identified.
What’s the difference between the consumptions that you 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 to slow steam for certain parts of a journey or even reroute it? Should the charterer be addressed, so that the ordered speed can be adjusted to achieve increased overall performance? Keeping an eye on various key figures such as the different types of fuels, the ships’ speed or the weather conditions during a journey will help you to get valuable insights into the efficiency of your fleet and help you 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 your 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. Sadly, efficient maintenance is not the norm. This can be caused by different factors. Often, companies have the approach of reactive maintenance, meaning that jobs are scheduled as soon as a job is necessary. But instead of waiting for parts to fail, resulting in the need to costly exchange parts, the preventive maintenance of parts can result in a massive saving of expenses. By closely monitoring KPIs and looking at values from the past, 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 your jobs enables you to easily identify peaks and lows and distribute your jobs evenly.
Are you always aware about how many jobs have been done in the month? How many have been rescheduled, approved or are overdue? Each one of these aspects could point to a potential problem.
Overall, close monitoring of all jobs and an evaluation of their efficiency, as well as a variance analysis, so checking if the actual number of jobs done is in accordance with the amount of planned ones, might be one of the best tools you have at hand to see if there are ways to increase your overall efficiency and drive down cost. Having various information available and automatically pooled together gives you critical insights into the performance and especially, the efficiency of your maintenance tasks.
When are you making money? Exactly, when your vessels are on their journey, carrying goods for you or being chartered to some other party. But what if for any reason your vessel is idle or not available at all? Being off hire, a vessel is costing you rather than earning money so this should be one of the main KPIs that you should always have a focus on.
As a benchmark: Anything above 97% availability can be rated as a good performance. When your vessels are not reaching this availability, you should consider taking a closer look to find out how you can increase availability. It might be worth taking a look into increasing the crew numbers or optimizing maintenance processes.
These core management KPIs are only a fraction of the possibilities, and each metric may go by other names with different companies. Ultimately, this simple list of management KPIs will provide an excellent basis to identify how to reduce costs and improve efficiency in your company.