Shipping Performance Assessment and the Role of Key Performance Indicators (KPIs): 'Quality Function Deployment' for Transforming Shipowner's Expectation

Abstract

The aim of this paper is to investigate the role of Key Performance Indicators (KPIs) in third party ship management and their contribution to the Shipping Performance Index (SPI). This research is mainly motivated from the SPI initiative which is established by the InterManager for the assessment of the shipping performance of the third party ship management companies and to elicit quality service providers and the frontrunner companies in the maritime industry. The SPI is an unweighted average of KPI scores which is calculated from numerical outcomes of several performance indicators. However, the degree of importance and contribution of a specific performance indicator for shipowner’s satisfaction is not taken into consideration. Therefore, a theoretical gap exists on linking the shipowner’s expectations with the technical and numerical measures (i.e. KPIs). This paper proposes a preliminary process to establish the priorities of the KPIs by utilising Quality Function Deployment (QFD). The empirical results indicate the unweighted average method does not represent shipowners’ perception and the priority of KPIs should be revalued.