Developing key performance indicators and information dashboards for the maritime industry

By Stavros Polyviou, Data Management & Usability Specialist

Executives of Maritime companies, such as ship owning and ship management companies, are constantly performing a balancing act between their company's need for expansion on one hand, and profit maximisation on the other. The former involves expanding and renewing the company's fleet, training ever-increasing numbers of crew and fostering new relationships with customers such as oil majors and ship owners. The latter involves reigning in costs, abiding by ever more stringent environmental, safety and security requirements, lessening the impact of currency fluctuations, optimally timing financial transactions and minimizing vessel off-hire days among others. As the operations of a Maritime company grow, however, the task of profit maximization becomes commensurately more difficult: larger companies are, alas, inherently less efficient. Consequently, profit maximization in such ever-expanding organizations becomes inexorably linked to efficiency improvement.

The key to efficiency improvement is performance measurement and monitoring. The former is handled through the development of performance measures. The latter is achieved through the development of interactive dashboards. Key Performance Indicators (KPIs) are the most important type of performance measure. They inform on what action needs to be taken in order to improve performance dramatically and across several perspectives. According to David Parmenter ('Key Performance Indicators: developing, implementing, and using winning KPIs', Wiley 2007), a KPI should have the following characteristics:

1. Nonfinancial measure
2. Frequently measured
3. Acted on by the CEO and the senior management team
4. Understood by all staff
5. Ties responsibility to the individual or team
6. Has significant impact
7. Has positive impact

Let us examine an example of a KPI for the Maritime industry, the Lost Time Injury Frequency (LTIF). This particular KPI is an indication of the time lost due to various types of injury sustained by crew members. It is derived for a specific period of time based on the total number of injuries, the total number of crew on board the company's vessels and the total number of hours in the selected time period. It is obviously a nonfinancial measure. Its value is constantly updated based on information such as crew members signing on and off vessels and reported injury incidents.

The goal is obviously to keep this value as low as possible. Should it start to rise, either the CEO or the head of the Marine & Safety department would have to take action. This could involve a review of training and safety procedures or a competence evaluation of implicated officers. These actions, and the measure itself, are straightforward enough to be understood by all staff. The rising value of LTIF for a specific vessel can serve as a warning sign for its captain, who is the person  responsible for keeping it as low as possible.

Lowering the LTIF value overall will positively affect the company's performance in a number of perspectives. The most obvious one is of course the lowering of the financial cost associated with the treatment of injuries sustained by the crew and the resulting loss in productivity. Another one is the improvement of training and security procedures which should lead to fewer accidents. This translates to higher morale and increased productivity for the crew, as well as increased satisfaction for oil majors and ship owners.

Identifying and calculating a set of KPIs is of course only half the picture. One also needs an effective way of alerting the user in case the value of a KPI begins to slide precipitously close to the boundaries of acceptability. Moreover, the alerted user should be empowered to investigate the root causes of the problem and thus decide on appropriate corrective action. Both of these roles are fulfilled by the interactive dashboard. According to Stephen Few ('Information dashboard design', O' Reilly 2006), a dashboard is a 'visual display of the most important information needed to achieve one or more objectives which fits entirely on a single computer screen so it can be monitored at a glance.'

The 'at a glance' part in Few's definition relies heavily on our ability to instantly and effortlessly detect variations in colour, contrast, size and tilt, known as pre-attentive processing; it is a skill we have been relying on for our very survival for millenia. The beauty of a dashboard, therefore, lies not in its use of cute visual metaphors, such as gauges, or elaborate renderings, such as three-dimensional area graphs, but in the lusciousness of the data it conveys. A dashboard should not be treated as ornament but as a highly effective decision support tool.

A particularly useful dashboard for the Maritime industry is the training matrix: scheduled trainings are arranged along the horizontal axis, which represents time. The vertical axis is used to represent crew and shore staff members, clustered by department. An icon appears at the intersection of a scheduled training and a registered participant. The colour of the icon indicates whether the participant has successfully undergone the specified training. The shape of the icon indicates the type of training, such as basic or advanced. Glancing at this display, one can easily recognize trends such as a higher degree of failure for participants coming from specific departments or for trainings given during specific times of the year. An individual's training participation record can also be examined by clicking on an icon and drilling down to the person's training history.

At the surface, developing a set of KPIs and designing interactive dashboards for the Maritime industry is no different from performing such tasks for any other industry; the principles described herein are, after all, universal. What makes such an undertaking immensely interesting, however, is the sense of discovery that accompanies it. In comparison to the Retail industry, the 'fruit fly' of Business Intelligence, little has been said or written regarding the development of BI solutions for the Maritime industry. This is surely to be rectified, as more and more Maritime companies start implementing and benefitting from such solutions.