Achiev­ing 10.7% Berth Pro­duc­tiv­i­ty Improve­ment in the Port Indus­try: A Case Study

INTRODUCTION

The Client is the lead­ing port oper­a­tor in the Pearl Riv­er Delta region. It owns inter­ests in world class, deep-water con­tain­er port assets locat­ed in some of the world’s busiest con­tain­er ports, where it has the resources, facil­i­ties and peo­ple required to achieve smooth and effi­cient han­dling of con­tain­er car­goes. Hong Kong is the flag­ship port of the Group with an annu­al through­put of over 10 mil­lion TEU.

THE CHALLENGE

Hong Kong con­tain­er activ­i­ty had grown con­sis­tent­ly, yet The Clien­t’s oper­a­tional results were affect­ed by a com­bi­na­tion of issues: Short­age of skilled work­ers, the imple­men­ta­tion of the min­i­mum salary, and com­pe­ti­tion from region­al port capac­i­ty and oth­er competition.

These changes drove the Client to rethink its oper­a­tional par­a­digm away from man­ag­ing growth to opti­mis­ing lim­it­ed resources and cus­tomer satisfaction.

ANALYSIS

Renoir car­ried out an analy­sis of the oper­a­tion, which quick­ly iden­ti­fied that ves­sel turn­around times were impact­ed by some fire­fight­ing behav­iour. Key improve­ment oppor­tu­ni­ties included:

1. Plan­ning processes
2. Oper­a­tional per­for­mance measurement
3. Roles & responsibilities
4. Guide­lines for­mal­i­sa­tion to ensure sus­tain­able high performance
5. Pro­duc­tiv­i­ty vari­ances review
6. Stan­dard­i­s­a­tion and record­ing of main­te­nance activities
7. Sched­ules for Pre­ven­tive maintenance
8. Super­vi­sion of the crews to ensure opti­mal productivity

PROJECT APPROACH

To achieve the Project objec­tive of a 7% to 10% turn-around time reduc­tion (or Berth pro­duc­tiv­i­ty increase) and cov­er­ing the end-to-end oper­a­tional process­es, the project was struc­tured on 3 work streams for 40 weeks:

Oper­a­tions, Engi­neer­ing & Cus­tomer service

Each work stream was organ­ised around a Man­age­ment Action Team (MAT) con­sist­ing of rel­e­vant man­agers, inter­nal task­force mem­bers and Renoir con­sul­tants. Each work stream was respon­si­ble for:

1. Improv­ing process effi­cien­cy and inter­faces between departments
2. Improv­ing the man­age­ment con­trol sys­tem (MCS) with more accu­rate & rel­e­vant data col­lec­tion and a sys­tem­at­ic per­for­mance review for deci­sion making
3. Imple­ment short inter­val con­trols to min­imise the risks of variance
4. Chang­ing behav­iour through buy in, train­ing and coach­ing to ensure sus­tain­able results and con­tin­u­ous improvement

“Investors & mar­ket ana­lysts have been impressed by the cost reduc­tions, result­ing from our effi­cien­cy improve­ments, that has con­tributed to our mar­gin improve­ment with­in a dif­fi­cult market.”

CEO

IMPLEMENTATION

Oper­a­tions

Three cat­e­gories of actions have been imple­ment­ed in operations: 

1. The improve­ment of the MCS with:

• The for­mal­i­sa­tion of oper­a­tional hourly tar­gets per func­tion sup­port­ed with a per­for­mance mon­i­tor­ing process for proac­tive deci­sion mak­ing and com­plet­ed KPI dashboard.
• The imple­men­ta­tion of a com­pre­hen­sive ves­sel sum­ma­ry report and sys­tem­at­ic review mak­ing the oper­a­tional results per voy­age and the non-compliance with the plan visible.
• The data has allowed oper­a­tional teams to gain insights into root caus­es to pro­pose actions plans to improve.

2. Process review to max­imise its align­ment and efficiency:

• The roles and respon­si­bil­i­ties in the con­trol tow­er have been rede­fined to ensure the bal­anc­ing of the staff crew­ing with the actu­al workload.
• The ves­sel plan­ning has been for­malised through the count­down sched­ule and inte­grat­ed with­in the prepa­ra­tion checklist.
• The plan­ning process per ves­sel has been revised with a regres­sion mod­el that pro­vides a more accu­rate esti­mat­ed time of depar­ture (ETD).
• The berth plan­ning process and the ETD set­ting process have been aligned to max­imise the berth util­i­sa­tion or Berth Pro­duc­tiv­i­ty Rate (BPR).
• The Inter­nal Trac­tors have been organ­ised into seg­re­gat­ed pools in the dif­fer­ent ter­mi­nal to reduce the emp­ty trips and increased equip­ment util­i­sa­tion and efficiency.

3. Effect behav­iour and cul­ture change by:

• Involv­ing all lev­els of the oper­a­tional staff to con­tribute to con­tin­u­ous improve­ment and ensure own­er­ship of long-term solu­tions. Rein­force ‘Active Super­vi­sion’ by imple­ment­ing ‘Man­age­ment by Walk­a­bout’ habits and short inter­val controls.
• Train­ing of all super­vi­so­ry & man­age­ment lev­els via class-room train­ing, on the floor train­ing and day-to-day coaching.

Engi­neer­ing

These key ini­tia­tives were installed to increase efficiency:

• Improve­ment of the MCS, with bet­ter data avail­abil­i­ty to enable fact-based deci­sion mak­ing. Bottom-up con­sol­i­da­tion of key infor­ma­tion in Daily/Weekly/Monthly reports & reviews.

  The focus was on Fault Analy­sis and Planned Main­te­nance Effec­tive­ness con­trol, with sev­er­al con­crete short‑, mid- and long-term improve­ment actions such as revised pre­ven­tive main­te­nance con­tent, min­i­mize unplanned jobs, more sus­tain­able cor­rec­tive main­te­nance and bet­ter con­trol of spares util­i­sa­tion and replacements.

• Improve­ment of the man­pow­er pro­duc­tiv­i­ty based on a bet­ter work envi­ron­ment. With the imple­men­ta­tion of a 5S method­ol­o­gy the work- shop lay­out was reviewed, the ‘Work-Packs” for Pre­dic­tive Main­te­nance jobs are pre-prepared and com­plet­ed with ‘Deliv­ery Ser­vices’ to reduce the trav­el­ling time for reg­u­lar unplanned jobs. Bet­ter access to the tools and spares were facilitated.
• Through­out the project the engi­neer­ing team, from super­vi­sors to engi­neers & man­agers have been trained and coached dur­ing work­shops and reg­u­lar reviews, enabling the team to take own­er­ship and to pro­pose and test new solutions.

Com­mer­cial

The two main actions con­duct­ed in Cus­tomer Ser­vice Team (CST) were to review key ele­ments dri­ving Ship­ping Line sat­is­fac­tion and imple­ment rel­e­vant mea­sures among Com­mer­cial, Oper­a­tions, and ship­ping lines for con­tin­u­ous improvement:

1. The four key ele­ments to address cus­tomer ser­vice were:

• Speed: Total Port Time includ­ing Ves­sel Wait­ing Time, Gross Crane Rate, Ves­sel Oper­at­ing Rate
• Flex­i­bil­i­ty: Abil­i­ty to cater to spe­cial requests
• Trans­paren­cy: Infor­ma­tion shar­ing with cus­tomers on oper­a­tional per­for­mance, pro­duc­tiv­i­ty, spe­cial ser­vices pro­vid­ed and upcom­ing development
• Reli­a­bil­i­ty: ETD accu­ra­cy, Berth on arrival avail­abil­i­ty, equip­ment stability

2. Actions tak­en, or mea­sures imple­ment­ed were:

• An improved inter­face with oper­a­tions by enforc­ing an esca­la­tion process for emer­gen­cies or cus­tomer con­cerned areas. In this way proac­tive mea­sures can be tak­en to resolve the issues and bet­ter man­age cus­tomer expec­ta­tions to min­imise cus­tomer complaints.
• Iden­ti­fi­ca­tion of extra ser­vices pro­vid­ed beyond con­trac­tu­al promis­es for review and cre­ation of new busi­ness opportunities.
• Reg­u­lar struc­tured and detailed review between CST and ship­ping lines to realise improve­ment oppor­tu­ni­ties that require both par­ties’ commitment.
• Oper­a­tional per­for­mance improve­ments and devel­op­ments are shared with the Com­mer­cial team, enabling them to refine their sales pitch­es and dri­ve busi­ness expansion.

KEY RESULT