MEASUREMENT OF PORT
PRODUCTIVITY & EFFICIENCY –
THE BALANCED SCORE CARD METHOD
V.RAMAKRISHNAN
MANAGING DIRECTOR
ORGANISATION DEVELOPMENT PTE LTD
&
EXECUTIVE EDUCATION ASSOCIATELEE KUAN YEW SCHOOL OF PUBLIC POLICY,
SINGAPORE
© Ram RAMAKRISHNAN
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MANAGEMENT QUALITY
PROCESS EXCELLENCE
© Ram RAMAKRISHNAN
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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
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The Balanced ScorecardWhat It Is- Converts Data To Information
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.
CONCEPT
© Ram RAMAKRISHNAN
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CAPITAL PRODUCTIVITY
A 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
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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
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Fatality Tracking
Fatal Accident Causation Chart
2.5
2
Numbers
1.5
1
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e
Na
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Un
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ow
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id
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Cause
April-06 to March-07
April-07 to March-07
© Ram RAMAKRISHNAN
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FIRST AID MANAGEMENT
OPD Cases & Occupational Injury During the 2007 & 2008
OPD Cases
Sr No Month
Occupational Injury cases
1
Apri.07
1629
186
2
May.07
1546
177
3
Jun.07
2431
187
4
Jul.07
3560
146
5
Aug.07
3734
202
6
Sep.07
4551
173
7
Oct.07
4777
176
8
Nov.07
3218
84
9
Dec.07
3837
144
10
Jan.08
3417
124
11
Feb.08
2829
97
12 March.08
2170
81
Total
37699
1777
© Ram RAMAKRISHNAN
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OSHA Improvements
HYGIENE RELATED ILLNESS REPORTED INPORT CLINIC
% ofAmoebiasis
Hygene Related
sickness
with
OPD
Scabies
Total
Cases
Diarrhoea /
Dysentry
2007
2008
281
111
255
81
194
126
50
109
76
81
464
478
316
184
100
135
2,614
427
Month
16%
January
February
March
April
May
June
July
August
September
October
November
December
Total
14%
12%
10%
8%
6%
2007
215
221
177
98
92
119
2008
77
60
80
62
2007
5
5
6
0
4
0
8
42
3
2
1
0
76
Combind
Combind
197
158
199
105
1,581
279
2008
9
1
0
3
13
2007
501
481
377
148
172
200
472
520
516
344
300
240
4,271
2008
197
142
206
174
0
0
0
0
0
0
0
0
719
2007%Percentage
2008%
Total OPD
2007
2008
2007
2008
4,851
3,417
10.33% 5.77%
4,702
2,829
10.23% 5.02%
3,420
2,393
11.02% 8.61%
1,629
1,590
9.09% 10.94%
1,546
11.13%
2,431
8.23%
3,560
13.26%
3,734
13.93%
4,551
11.34%
4,777
7.20%
3,218
9.32%
3,837
6.25%
42,256 10,229 10.11% 7.03%
4%
2%
0%
1
2
3
4
5
6
Months
7
© Ram RAMAKRISHNAN
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9
10
11
12
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Map Of Perspectives At Work
STAKEHOLDER
LOYALTY
FINANCIAL
CUSTOMER
LOYALTY
CUSTOMER
INTERNAL
PROCESSES
LEARNING
ON TIME
PERFORMANCE
PROCESS
QUALITY
PRODUCT
QUALITY
EMPLOYEE SKILL
IN PRODUCT & PROCESS DESIGN
© Ram RAMAKRISHNAN
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Over View of BSC
“If You Are Not Keeping Score You Are Only Practicing”
‘Measure Outcomes & Outputs; Not Inputs & Activities’
THEME MAP FOR A SEAPORT
STRATEGIC OBJECTIVE:
What are you trying to ACHIEVE- Not DO
- RETURN TO STAKEHOLDERS
STAKE HOLDER VALUE
PAT, RONA
GROW
REVENUE
ASSET UTILIZATION
BERTH UTILIZATION
ATTRACT & RETAIN MORE CUSTOMERS
PRODUCT
LEADERSHIP
SAFETY
TAT
OPERATIONAL
EXCELLENCE
LOWEST PRICES
FAST
THROUGHPUT
LEARNING
MARINE, STEVEDORING,
WAREHOUSING,
DESPATCH ALIGNMENT
INFRASTRUCTURE
BERTHING, HANDLING &
TRANSPORT SYSTEMS
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 DAYS
SAFETY – THEFT/SPILLAGE <1%
COST OF SAFETY <0.5% OF REVENUE
© Ram RAMAKRISHNAN
INITIATIVES:
Key Programs to Achieve Targets
-TRAINING
-MULTI-SKILLING
-EQUIPMENT UPTIME
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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
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The Focus Was Right But
Alignment Wrong!
© Ram RAMAKRISHNAN
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People, Throughput & On Time
Makes A Port Competitive
© Ram RAMAKRISHNAN
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People, Throughput & On Time
Makes A Port Competitive
ASSETS
COST
VALUE ADD OP PROFIT
WORKING
CAPITAL
CASH
FIXED
TAXES &
LEVIES
CURRENT
CAPITAL
CAPEX
CASH
FREE CASH
EXTERNAL INTERNAL
SURPLUS
FUNDS
© Ram RAMAKRISHNAN
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© Ram RAMAKRISHNAN
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Strategy Map -Key Result Areas Port
REVENUE GROWTH
STRATEGY
GROW REVENUE FROM
CURRENT
CUSTOMERS
PROCESSES
CUSTOMER
FINANCIAL
MISSION:
Deliver best in Class Throughput
•PRODUCTIVITY
STRATEGY
LONG TERM SHAREHOLDER VALUE
INCREASE
CUSTOMER
TONNAGE & BASE
BALANCED
CAPACITY
ENHANCEMENT
BECOME INDUSTRY
COST LEADER
MAXIMIZE USE OF
EXISTING ASSETS
..offer Products & Services That Are Consistent, Timely and Low-Cost
LOWEST TURN AROUND
TIME IN REGION
LEAST COST TO IN & OUT
BOUND CUSTOMERS
SPEEDY QUAY
TRANSFER
MINIMIZE THEFT,
SPILLAGE, LOSSES
..By Streamlined Ship, Quay, Warehouse and Despatch Management..
BERTH
PRODUCTIVITY
BERTH
OCCUPANCY
LEARNING &
GROWTH
SHIP TURN
AROUND TIME
WAREHOUSE
EFFICIENCY
EQUIPMENT
AVAILABILITY
TRANSPORT
PRODUCTIVITY
OPERATIONS MANAGEMENT
EVACUATION
EFFICIENCY
SHIP
PREPARATION
SAFETY
CONTAMINATION
QUAY TRANSFER
EFFICIENCY
INFRASTRUCTURE
MANAGEMENT
ECO, POWER & WATER
MANAGEMENT
DISCHARGE
EFFICIENCY
CAPACITY
DEVELOPMENT
BUILD & NURTURE
COMMUNITIES
CUSTOMER MANAGEMENT
INNOVATION
CSR
..For Which We Need A Technologically Capable, Systems & Enabled Workforce
HUMAN CAPITAL
PROCESS IMPROVEMENT
CAPABILITIES
ORGANISATION CAPITAL
TEAM BASED
DEVELOPMENT
PEOPLE
PRODUCTIVITY
© Ram RAMAKRISHNAN
INFORMATION CAPITAL
SHIP TO SHORE
INFO MGT
FACILITATE
KNOWLEDGE
SHARING
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FINANCIAL
OBJECTIVES
CUSTOMER
OBJECTIVES
INT. PROCESS
OBJECTIVES
LEARNING
OBJECTIVES
PROFITABILITY
Op MARGIN PER
Ton
REVENUE
EBIDT
GROWTH
66%
25%
Increase Share
With Primary
Customers
CARGO
INTEREST
MHS
Contribution
Per Berth
Day
KEY RESULT AREAS –KRA’s
Theft Spillage
Damage
0%
Contribution
Per Ton
VESSEL
INTERESTS
RONA
9%
Tons
Throughput
Per Day
SECONDARY
CUSTOMERS
Customer
Management
Berth
Management
TERTIARY
CUSTOMERS
•EMPLOYEE
•SUPPLIER
•ENVIRONMENT
SATISFACTION
Storage
Management
Contractor
PORT
NAVIGATION
MATERIAL
HANDLING
LOGISTICS
CULTURE
TEAM BASED
SHIP TO SHORE
MGT
STYLE
DEMOCRATIC
IT
INFRASTRUCTURE
PILOTAGE
TUG MGT
© Ram RAMAKRISHNAN
GATE
MANAGEMENT
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FINANCIAL
OBJECTIVES
CUSTOMER
OBJECTIVES
INT. PROCESS
OBJECTIVES
LEARNING
OBJECTIVES
PROFITABILITY
Op MARGIN PER
Ton
Contribution
Per Berth
Day
REVENUE
EBIDT
GROWTH
66%
25%
Increase Share
With Primary
Customers
CARGO
INTEREST
MHS
KEY RESULT AREAS –KRA’s
Theft Spillage
Damage
0%
Contribution
Per Ton
VESSEL
INTERESTS
RONA
9%
Tons
Throughput
Per Day
SECONDARY
CUSTOMERS
Customer
Management
Berth
Management
TERTIARY
CUSTOMERS
•EMPLOYEE
•SUPPLIER
•ENVIRONMENT
SATISFACTION
Storage
Management
Contractor
PORT
NAVIGATION
MATERIAL
HANDLING
LOGISTICS
CULTURE
TEAM BASED
SHIP TO SHORE
MGT
STYLE
DEMOCRATIC
IT
INFRASTRUCTURE
PILOTAGE
TUG MGT
© Ram RAMAKRISHNAN
GATE
MANAGEMENT
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KEY PERFORMANCE INDICATORS
(KPI’s)- LAG

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!
© Ram RAMAKRISHNAN
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KEY PERFORMANCE INDICATORS
(KPI’s)- LEAD

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.

SAFETYCOST OF SAFETY
REACTIVE VS PROACTIVE

ADDITIONAL METRICS LIKE
 SHIP TURN AROUND TIME
 RAIL RAKE TURN AROUND
 ROAD VEHICLE TURN AROUND
© Ram RAMAKRISHNAN
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Effective Leader ?
© Ram RAMAKRISHNAN
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The Map and the Compass
Strategy & Execution
THE COMPASS
PRODUCT PROCESS
PROFITABILITY
GROWTH
COMPETITIVENESS
CUSTOMER
MANAGEMENT
SERVICE
CORE
COMPETENCE
PRODUCTIVITY
CORE
CAPABILITY
CORPORATE
CITIZENSHIP
CULTURE, CLIMATE, ST. COMPETENCIES
INFRASTRUCTURE
THE MAP
© Ram RAMAKRISHNAN
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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
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THE BSC
MAKES BUSINESS CENTS
© Ram RAMAKRISHNAN
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THANK YOU
V.RAMAKRISHNAN
Managing Director
Organisation Development Pte Ltd
371, Holland Road, #05-05
The Serenade @ Holland, Singapore 278698
Tel: (65) 64650973;
Hphone: (+65) 97309365; (+91 9894709365)
email: vram@odpl.net
v_ram@governancedashboard.com
asharam@starhub.net.sg
http://www.odpl.net
© Ram RAMAKRISHNAN
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