12/01/2024, 12:14 Documentation | Concepts | 4.

Concepts V4.0
This is version 4.0 valid from 2020-Q1

Overview
The Shipping KPI Standard is built up hierarchical with 3 different levels:

1. Key Performance Indicators groups (KPI groups)

2. Key Performance Indicators (KPIs)
3. Performance Indicators (PIs)

There is a mathematical relation between the last two levels. In basic terms, Key
Performance Indicators are calculated from Performance Indicators (lowest
level) using a KPI formula.

On the lowest level you find the PIs, 67 in number, which are based on data
capture (measurements or counters) directly from a ship or from the shipping
management. Data is collected once and re-used within the Shipping KPI
Standard in order to reduce the amount of data.

The 36 KPIs are scaled into a range from 0-100, where zero indicates low and 100
is outstanding performance. This makes it possible to compare ships with
different characteristics or amount of data captured.

Finally, on the highest level the KPIs are combined into KPI groups for better
categorization and visualization purposes. No form of calculation or aggregation
is happening on this level.

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KPI Groups
The old concept of Shipping Performance Indexes (SPIs) has been replaced from
the concept of KPIs Groups. Compared to SPIs, KPI Groups do not express any
aggregated performance in any area. No calculation is happening on this level.
It’s just used as a grouping criteria.

Key Performance Indicators

The Key Performance Indicators (KPIs) are expressions of performance within a
specific area. The KPIs can be expressed in two ways; a KPI Value which is a
mathematical combination of relevant Performance Indicators Values and a KPI
Ranking which is an expression of the KPI Value on scale between 0 and 100
where a high ranking (100) is a result of high/excellent performance. KPI ranking
can be also considered the actual position of the ship within its ranking criteria
(4th out of 500).
Some PI Values can be included in the calculation of more than one KPI Value.
Examples of KPIs are: KPI002 Budget performance, KPI010 Drydocking planning
performance and KPI032 Ship availability

The objectives of KPIs are to measure:

for continuous improvement

for internal and external benchmarking
to set incentives

KPI accepted as part of the Shipping KPI performance hierarchy must be:

Observable and quantifiable

A KPI is a mathematical formula on basis of unambiguous, observable

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performance measurements.

Valid indicator of performance

A KPI expresses performance within an area which the Ship Manager
needs to perform well. Also the Ship Manager needs to have complete
control of the factors affecting the performance measured.

Robust against manipulation

A KPI must relate to a large extent to unambiguous descriptions of the
needed measurements and not leave room for “favourable
interpretations”.

Sensitive to change
A KPI will reflect actual changes in the Ship Manager’s performance
well (by increase/decrease) over time.

Transparent and easy to understand

A KPI is interpreted by all users in the same manner.

Compatible
A KPI is harmonized with the rest of the performance hierarchy. The KPI
must be compatible with other KPIs to prevent the decision-makers
receiving contradictory control signals.

Performance Indicators
The Performance Indicators (PIs) are the building blocks giving the basis for KPI
Value calculations. PIs are directly observable parameters (measurements) for
each ship under management, e.g. PI026 Number of dismissals, PI022 Number of
collisions and PI032 Number of fire incidents. In general the KPI standard is ship
oriented. Performance Indicators (PIs) are captured and reported by ships. KPIs
are also calculated by ship. But it turns out, that a few performance
measurements cannot be expressed by ship but by Business unit (see relevant
chapter below). A classic example is PI017 Number of cadets under training.
The Performance Indicators are the only elements that must be reported
manually or by means of implemented ICT solutions. Focus has been to provide
the hierarchy with unambiguous definitions of measurable low level parameters
based on existing measurements in the industry. Each PI may be used in the
calculation of several Key Performance Indicators (KPIs). An example is the PI052
Number of recorded external inspections which is used as a denominator in the

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calculation of several KPI Values.

Ship attributes - METAdata

Meta data is used for grouping and filtering during statistical analysis. It usually
represents an attribute of the ship, like its length or the nationality of seafarers
used during the reporting period.
A typical use of meta data allows a ship manager to benchmark its ships not
against all other ships in the system, but for example only against ships of the
same ship type.

KPI Rankings
Ranking is an implicit benchmark where performance is regarded as relative to
who I am compared with. Each ship is compared with other ships on the same
KPI based on its own ranking criteria, hereby creating a ranking result where
each ship is given its rank.
It can be compared to a race, where the fastest runner is on place 1, the next
person on place 2 etc irrespective of the absolute time. Something like a
marathon with 100 runners, the first, the second, the third etc. To get a silver
medal, it’s not important how fast I was, it only counts that I was behind the
first.
For calculating the ranking of an individual ship for particular KPI in a particular
quarter, the below steps are followed:

1. Calculate KPI value based on the KPI formula

2. Calculate position by comparing the KPI value of the ship with rest KPI
values of ships having the same ranking criteria
3. Calculate ranking as percentage based on a global formula used for all KPIs
which considers the total ships participating with the same ranking criteria
and the actual position of the ship in this list

In case of calculating KPI rankings of multiple ships i.e of a Business Unit (BU),
the system first aggregates PI values (not KPIs) of the ships belonging to the BU
and then follows the exact same steps.
Important to note that, in order to calculate KPI rankings either on the ship or
the BU level, the rule of 3 should apply on each individual KPI. In effect that
means for calculating the ranking of a ship in a particular quarter for a
particular KPI, its ranking criteria must contain at least 10 ships from 3 different
accounts.

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Period for reporting vs. Period for data capture

Performance data of ships is always reported quarterly, i.e. the period for
reporting is always the quarter.

In the normal case the reporting period is also the same as the period for data
capture, so the data reported for Q1-2020 is also the performance data
measured (i.e. captured) in Q1-2020. However in a few cases this does not
appear to be practical. For example:

'Actual running costs and accruals' might not be known in time of reporting
for a given quarter. It was therefore decided that PI011 Last year’s actual
running costs and accruals is using last year's values.
'Officer terminations' are difficult to specify for a single quarter, due to the
use of temporary contracts in the maritime industry and the return of
officers at a later stage. It was therefore decided for PI041 Number of officer
terminations from whatever cause to look at a rolling year period.

In conclusion it is important to check for each PI measured, which time period is

specified in its documentation for data capture.

Note: The BIMCO KPI Expert group is well aware that the variations in data
capture period are adding to the complexity of the KPI standard. This was also
confirmed by feedback of the participants. The KPI Expert Group therefore works
on the practicalities of unifying the capture period, if possible also to a
quarterly base.

Ship vs. Fleet wide reporting

In general the KPI standard is ship oriented. Performance Indicators (PIs) are
captured and reported by ships. KPIs are also calculated by ship. But it turns
out, that a few performance measurements cannot be expressed by ship.

A classic example is PI017 Number of cadets under training. Some cadets get
trained on one ship and deployed later at another one, some cadets are not on
ships at all. So the cadets employed with a ship manager are an investment into
the future, where not only a specific ship benefits, but a whole fleet of ships.

To address this the term of a Business Unit (short BU) is used. A BU is an

organizational sub-entity of a shipping company responsible for a subset of the

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ships. This could be a branch, a country office or a region etc. All fleet wide
defined PIs are measured by BU.

Again in conclusion it is important to check for each PI measured, if it is

measured for a single ship or across all ships in a BU. In effect the ships within a
BU share the same value for such PIs.

Under the Business Unit "Fleets" can be created for allocation or grouping of
ships if so needed.

KPI Profiles
A KPI profile is a record of KPIs that is used to store the interested KPIs of the
ship operator. Depending on the structure and the company needs, account
managers are entitled to select and assign KPI Profiles to ships from a list which
combines built-in and custom KPI profiles. Also, the KPI profile refers to the
explicit visual representation of ships performance data.

KPI Profile concept provides a set of benefits such as:

Simplifies the way users perceive the KPI Standard

Limits the KPI Standard as per the company needs
Reduces the data entry volume
Customized visual representation of the ship’s performance

Primary Vs Secondary KPIs

A primary KPI is selected by the account manager to be in the KPI Profile.
Primary PIs are the PIs, which should be entered in order to calculate the
primary KPIs of your KPI profile. Similarly, a secondary KPI is excluded from the
KPI profile and secondary PIs should be entered to calculate the secondary
KPIs.

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