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© Ram RAMAKRISHNAN 1
MEASUREMENT OF PORT PRODUCTIVITY & EFFICIENCY –
THE BALANCED SCORE CARD METHOD
V.RAMAKRISHNANMANAGING DIRECTOR
ORGANISATION DEVELOPMENT PTE LTD&
EXECUTIVE EDUCATION ASSOCIATE- LEE KUAN YEW SCHOOL OF PUBLIC POLICY,
SINGAPORE
© Ram RAMAKRISHNAN 2
MANAGEMENT QUALITY PROCESS EXCELLENCE
© Ram RAMAKRISHNAN 3
An Overview Of Port Needs
“The basic principle in information management is that as information is passed up the management pyramid- some detail may be omitted and detail reports cut down in size and their frequency……….. Reports should show the extent to which the manager is not achieving the objectives of the business as set out in the corporate plan….. identifying potential opportunities where the port might use its particular resources and skills to an advantage should be a continuous process………the design of a first class set of corporate objectives is essential for the efficient management of a port(1)”.
PORTMIS Port Management Information System, A UN Publication
© Ram RAMAKRISHNAN 5
THE BALANCED SCORECARD IS A POWERFUL
FRAMEWORK TO HELP ORGANIZATIONS RAPIDLY
IMPLEMENT STRATEGY BY TRANSLATING THE
VISION AND STRATEGY INTO A SET OF
OPERATIONAL OBJECTIVES THAT CAN DRIVE
BEHAVIOR, AND THEREFORE, PERFORMANCE.
The Balanced Scorecard- What It Is- Converts Data To Information
CONCEPT
© Ram RAMAKRISHNAN 7
CAPITAL PRODUCTIVITYA TYPICAL RESULT IS …………..
AN EBDITA JUMP OF 47%.
IMPROVED ASSET PRODUCTIVITY- RETURN ON NET ASSETS ENHANCED BY 22%
CONTRIBUTION IMPROVED BY 22% BY PRODUCT MIX CHANGE, PRODUCTIVITY IMPROVEMENT, THROUGHPUT MANAGEMENT, PRICING ETC.
© Ram RAMAKRISHNAN 8
OSHA / CSR A TYPICAL BEGINNING IS…….
A HEIGHTENED FOCUS ON SAFETY
PROACTIVE ENVIRONMENT MANAGEMENT WATER, ENERGY, AIR PER TON THRUPUT REDUCED
BY 7-10%
ON THE GROUND IMPROVEMENT IN HEALTH.
© Ram RAMAKRISHNAN 9
Fatality Tracking
Fatal Accident Causation Chart
0
0.5
1
1.5
2
2.5
Cause
Numbers
April-06 to March-07 April-07 to March-07
© Ram RAMAKRISHNAN 10
FIRST AID MANAGEMENT
Sr No Month OPD Cases Occupational I njury cases1 Apri.07 1629 1862 May.07 1546 1773 J un.07 2431 1874 J ul.07 3560 1465 Aug.07 3734 2026 Sep.07 4551 1737 Oct.07 4777 1768 Nov.07 3218 849 Dec.07 3837 144
10 J an.08 3417 12411 Feb.08 2829 9712 March.08 2170 81
Total 37699 1777
OPD Cases & Occupational I njury During the 2007 & 2008
© Ram RAMAKRISHNAN 11
OSHA ImprovementsHYGIENE RELATED I LLNESS REPORTED INPORT CLINIC
MonthDiarrhoea /
DysentryAmoebiasis Scabies Total Cases Total OPD Percentage
2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008J anuary 281 111 215 77 5 9 501 197 4,851 3,417 10.33% 5.77%February 255 81 221 60 5 1 481 142 4,702 2,829 10.23% 5.02%March 194 126 177 80 6 0 377 206 3,420 2,393 11.02% 8.61%April 50 109 98 62 0 3 148 174 1,629 1,590 9.09% 10.94%May 76 92 4 172 0 1,546 11.13%June 81 119 0 200 0 2,431 8.23%July 464 Combind 8 472 0 3,560 13.26%August 478 Combind 42 520 0 3,734 13.93%September 316 197 3 516 0 4,551 11.34%October 184 158 2 344 0 4,777 7.20%November 100 199 1 300 0 3,218 9.32%December 135 105 0 240 0 3,837 6.25%Total 2,614 427 1,581 279 76 13 4,271 719 42,256 10,229 10.11% 7.03%
% of Hygene Related sickness with OPD
0%
2%
4%
6%
8%
10%
12%
14%
16%
1 2 3 4 5 6 7 8 9 10 11 12Months
2007% 2008%
© Ram RAMAKRISHNAN 13
Map Of Perspectives At Work
FINANCIAL
STAKEHOLDERLOYALTY
CUSTOMER
INTERNALPROCESSES
LEARNING
CUSTOMER LOYALTY
ON TIME PERFORMANCE
PROCESSQUALITY
PRODUCTQUALITY
EMPLOYEE SKILLIN PRODUCT & PROCESS DESIGN
© Ram RAMAKRISHNAN 14
Over View of BSC“If You Are Not Keeping Score You Are Only Practicing”‘Measure Outcomes & Outputs; Not Inputs & Activities’
STAKE HOLDER VALUE PAT, RONA
PRODUCTLEADERSHIP
SAFETYTAT
OPERATIONAL EXCELLENCELOWEST PRICES
GROW REVENUE
ASSET UTILIZATIONBERTH UTILIZATION
LEARNINGMARINE, STEVEDORING,
WAREHOUSING, DESPATCH ALIGNMENT
INFRASTRUCTUREBERTHING, HANDLING &TRANSPORT SYSTEMS
FAST THROUGHPUT
THEME MAP FOR A SEAPORT
ATTRACT & RETAIN MORE CUSTOMERS
STRATEGIC OBJECTIVE:What are you trying to ACHIEVE- Not DO
- RETURN TO STAKEHOLDERS
OBJECTIVE:What NEEDS to be Done to achieve
Strategic Objective- FAST THROUGHPUT- <15 DAYS
MEASUREMENT:How Success or Failure is MONITORED
-TURN AROUND TIME-CARGO THROUGHPUT
SET TARGETS:Defines Level of Performance OR
Improvement Needed- TURN AROUND TIME- 1.5 DAYSSAFETY – THEFT/SPILLAGE <1%
COST OF SAFETY <0.5% OF REVENUE
INITIATIVES:Key Programs to Achieve Targets
-TRAINING-MULTI-SKILLING
-EQUIPMENT UPTIME
© Ram RAMAKRISHNAN 15
Capital & Productivity
……….(Workers in US, Japan, Europe)….can earn higher wages because they can be more productive- their effort is complemented by capital, broadly defined to include equipment, managerial expertise, corporate culture, infrastructure, and the capacity for innovation…….
Article Titled- Cooperating in labour’s interests- Straits Times May 6 2008 (copyright Financial Times) by Lawrence Summers Charles W Eliot Professor university professor at Harvard and Secretary of Treasury under Bill Clinton
© Ram RAMAKRISHNAN 16
The Focus Was Right But Alignment Wrong!
© Ram RAMAKRISHNAN 18
People, Throughput & On Time Makes A Port Competitive
© Ram RAMAKRISHNAN 20
People, Throughput & On Time Makes A Port Competitive
ASSETSASSETS VALUE ADDVALUE ADD TAXES & TAXES & LEVIESLEVIES
CAPITALCAPITAL FREE CASHFREE CASH
SURPLUSSURPLUSFUNDSFUNDS
INTERNALINTERNALEXTERNALEXTERNAL
FIXED CURRENT
CASH
COST OP PROFIT
WORKINGCAPITAL
CAPEX
CASH
© Ram RAMAKRISHNAN 21
© Ram RAMAKRISHNAN 22
REVENUE GROWTHSTRATEGY
Strategy Map -Key Result Areas PortMISSION: Deliver best in Class Throughput
LE
AR
NIN
G &
G
RO
WT
H
C
US
TO
ME
RF
INA
NC
IAL
BECOME INDUSTRYCOST LEADER
LONG TERM SHAREHOLDER VALUE
MAXIMIZE USE OFEXISTING ASSETS
GROW REVENUE FROM CURRENT
CUSTOMERS
LOWEST TURN AROUNDTIME IN REGION
SPEEDY QUAYTRANSFER
LEAST COST TO IN & OUT BOUND CUSTOMERS
MINIMIZE THEFT, SPILLAGE, LOSSES
BERTH OCCUPANCY
BERTHPRODUCTIVITY
WAREHOUSE EFFICIENCY
SHIP TURN AROUND TIME
EVACUATION EFFICIENCY
QUAY TRANSFEREFFICIENCY
SAFETYCONTAMINATION
EQUIPMENTAVAILABILITY
PROCESS IMPROVEMENTCAPABILITIES
BUILD & NURTURECOMMUNITIES
CAPACITY DEVELOPMENT
SHIPPREPARATION
TEAM BASEDDEVELOPMENT
SHIP TO SHOREINFO MGT
FACILITATE KNOWLEDGE
SHARING
OPERATIONS MANAGEMENT CUSTOMER MANAGEMENT INNOVATION
PR
OC
ES
SE
S
..offer Products & Services That Are Consistent, Timely and Low-Cost
..By Streamlined Ship, Quay, Warehouse and Despatch Management..
..For Which We Need A Technologically Capable, Systems & Enabled Workforce
INCREASE CUSTOMER
TONNAGE & BASE
•PRODUCTIVITYSTRATEGY
CSR
HUMAN CAPITAL ORGANISATION CAPITAL INFORMATION CAPITAL
PEOPLE PRODUCTIVITY
TRANSPORTPRODUCTIVITY
DISCHARGE EFFICIENCY
INFRASTRUCTUREMANAGEMENT
ECO, POWER & WATERMANAGEMENT
BALANCEDCAPACITY
ENHANCEMENT
© Ram RAMAKRISHNAN 23
KEY RESULT AREAS –KRA’sIN
T. P
RO
CE
SS
O
BJE
CT
IVE
SLE
AR
NIN
G
OB
JEC
TIV
ES
Berth ManagementMHS
Contractor
StorageManagement
Customer Management
•EMPLOYEE•SUPPLIER
•ENVIRONMENTSATISFACTION
LOGISTICS
MATERIALHANDLING
CULTURETEAM BASED
IT INFRASTRUCTURE
STYLEDEMOCRATIC
SHIP TO SHOREMGT
GATE MANAGEMENT
PORTNAVIGATION
PILOTAGETUG MGT
VESSEL INTERESTS
SECONDARY CUSTOMERS
TERTIARY CUSTOMERS
CARGOINTEREST
PROFITABILITYOp MARGIN PER
Ton
FIN
AN
CIA
L O
BJE
CT
IVE
SC
US
TO
ME
R
OB
JEC
TIV
ES
Increase ShareWith PrimaryCustomers
EBIDT66%
Theft SpillageDamage
0%
ContributionPer Ton
RONA9%
ContributionPer Berth
DayTons
ThroughputPer Day
REVENUEGROWTH
25%
© Ram RAMAKRISHNAN 24
KEY RESULT AREAS –KRA’sIN
T. P
RO
CE
SS
O
BJE
CT
IVE
SLE
AR
NIN
G
OB
JEC
TIV
ES
Customer Management
•EMPLOYEE•SUPPLIER
•ENVIRONMENTSATISFACTION
Berth Management
StorageManagement
CULTURETEAM BASED
IT INFRASTRUCTURE
STYLEDEMOCRATIC
SHIP TO SHOREMGT
GATE MANAGEMENT
MHS
Contractor
LOGISTICS
MATERIALHANDLING
PORTNAVIGATION
PILOTAGETUG MGT
VESSEL INTERESTS
SECONDARY CUSTOMERS
TERTIARY CUSTOMERS
CARGOINTEREST
PROFITABILITYOp MARGIN PER
Ton
FIN
AN
CIA
L O
BJE
CT
IVE
SC
US
TO
ME
R
OB
JEC
TIV
ES
Increase ShareWith PrimaryCustomers
EBIDT66%
Theft SpillageDamage
0%
ContributionPer Ton
RONA9%
ContributionPer Berth
DayTons
ThroughputPer Day
REVENUEGROWTH
25%
© Ram RAMAKRISHNAN 25
CONTRIBUTION PER BERTH DAY
CONTRIBUTION PER $ OF ASSET
CONTRIBUTION PER $ OF EMPLOYEE COST
WAREHOUSING CAPACITY UTILIZATION- WILL TELL IF ALL THE ABOVE ARE CORRECT OR
MASSAGED!
KEY PERFORMANCE INDICATORS (KPI’s)- LAG
© Ram RAMAKRISHNAN 27
FUTURE BUSINESS- CARGO FLOWS THERE IS CARGO THAT IS NATURAL TO THE PORT AND HENCE IS
SUSTAINABLE CARGO WHERE THE COST AND TECHNOLOGY OF WHICH IS A BARRIER
TO ENTRY.
SAFETY-
COST OF SAFETY
REACTIVE VS PROACTIVE
ADDITIONAL METRICS LIKE SHIP TURN AROUND TIME RAIL RAKE TURN AROUND ROAD VEHICLE TURN AROUND
KEY PERFORMANCE INDICATORS (KPI’s)- LEAD
© Ram RAMAKRISHNAN 28
Effective Leader ?
© Ram RAMAKRISHNAN 29
The Map and the CompassStrategy & Execution
CUSTOMERMANAGEMENT
CORECAPABILITY
GROWTH PROFITABILITY
PRODUCTPRODUCT PROCESSPROCESS SERVICESERVICE
CULTURE, CLIMATE, ST. COMPETENCIESINFRASTRUCTURE
THE COMPASS
THE MAP
CORECOMPETENCE
CORPORATECITIZENSHIP
COMPETITIVENESS PRODUCTIVITY
© Ram RAMAKRISHNAN 30
CONCLUSION
THE BSC IDENTIFIES THE CAUSE AND EFFECT RELATIONSHIPS THAT DRIVE A PORT
IT IDENTIFIES THE KEY RESULT AREAS (KRA)
IT ASSOCIATES A KEY PERFORMANCE INDICATOR (KPI) WITH A KRA
IT IMPROVES PEOPLE ASSET & CAPITAL PRODUCTIVITY
IT DELIVERS SUSTAINED BUSINESS RESULTS & OPS PERFORMANCE
IT BUILDS TEAMS AND TEAM WORK
IT IS USEFUL AS A ‘PAY-FOR PERFORMANCE’ INCENTIVE MANAGEMENT SYSTEM
© Ram RAMAKRISHNAN 31
THE BSC
MAKES BUSINESS CENTS
© Ram RAMAKRISHNAN 32
THANK YOU
V.RAMAKRISHNANV.RAMAKRISHNANManaging DirectorManaging Director
Organisation Development Pte LtdOrganisation Development Pte Ltd371, Holland Road, #05-05371, Holland Road, #05-05
The Serenade @ Holland, Singapore 278698The Serenade @ Holland, Singapore 278698
Tel: (65) 64650973;Tel: (65) 64650973;Hphone: (+65) 97309365; (+91 9894709365)Hphone: (+65) 97309365; (+91 9894709365)
email:email: [email protected][email protected]
http://www.odpl.nethttp://www.odpl.net
