Unit 1: Quality System in Shipping Industry

Quality System in Shipping Industry

The maritime industry is directly influenced by the policies of the International Maritime Organisation (IMO) and its international conventions. IMO has established three major pillars, viz., SOLAS (Safety Of Life At Sea), MARPOL (Maritime Pollution) and STCW (Standards of Training, Certification and Watchkeeping). In addition, there are several international organisations such as ILO which regulate the labour rules and regulations. The maritime sector is very sensitive on two topics: safety at sea and the environment. These two concepts can be found in almost every shipping company’s mission statement. Despite the existing sensitivity, accidents in the maritime sector, especially on vessels, still continue.

IMO was monitoring and working on a quality system which can be accepted by all the member countries in order to be sure that every shipping company in the world is obliged to apply the same basic safety rules and to the same standards. For this reason, the ISM (International Safety Management) Code was developed to provide an international standard for the safe management and operation of ships and for pollution prevention.

The purpose of ISM Code is:

• To ensure safety at sea
• To prevent human injury or loss of life
• To avoid damage to the environment and to the ship

SOLAS adopted the ISM Code in 1994 and incorporated it into the main body of the legislation (what is known as Chapter IX). By 1998, much of the commercial shipping community was required to be in compliance with the ISM Code. By 2002, almost all of the international shipping community was required to comply with the ISM Code.

In order to comply with the ISM Code, each ship class must have a working Safety Management System (SMS). Each SMS consists of the following elements:

• Commitment from top management
• A Top Tier Policy Manual
• A Procedures Manual that documents what is done on board the ship
• Procedures for conducting both internal and external audits to ensure the ship is doing what is documented in the Procedures Manual
• A Designated Person to serve as the link between the ships and shore staff
• A system for identifying where actual practices do not meet those that are documented and for implementing associated corrective action
• Regular management reviews

Another part of the ISM is the mandatory Planned Maintenance System, which is used as a tool for maintaining the vessel according to the specified maintenance intervals.

Each ISM-compliant ship is audited, first by the company (internal audit) and then every 2.5 to 3 years by the Flag State Marine Administration to verify the fulfilment and effectiveness of their Safety Management System. Once the SMS is verified and it is working and effectively implemented, the ship is issued with the Safety Management Certificate. Comments from the auditor and/or audit body and from the ship are incorporated into the SMS by headquarters.

The full requirement of ISM Code 2002 is given later in this Appendix. In creating the family business knowledge framework, the ISM Code is carefully considered, as it plays an important role and needs to be fully included in the intended knowledge framework.

ISO 9000 - Quality Standard

To ensure that there are procedures to implement a set of basic quality system, industry is encouraged to apply ISO 9001 which is internationally recognised standard for the quality management of businesses.  

• it applies to the processes that create and control the products and services an organisation supplies
• prescribes systematic control of activities to ensure that the needs and expectations of customers are met
• is designed and intended to apply to virtually any product or service, made by any process anywhere in the world 

ISO 9001 is one of the standards in the ISO 9000 family.

The benefits of implementing ISO 9001

Implementing a Quality Management System will motivate staff by defining their key roles and responsibilities.  Cost savings can be made through improved efficiency and productivity, as product or service deficiencies will be highlighted. From this, improvements can be developed, resulting in less waste, inappropriate or rejected work and fewer complaints. Customers will notice that orders are met consistently, on time and to the correct specification. This can open up the market place to increased opportunities.

How do you start to implement ISO 9001? What is involved?

• Identify the requirements of ISO 9001 and how they apply to the business involved.
• Establish quality objectives and how they fit in to the operation of the business.
• Produce a documented quality policy indicating how these requirements are satisfied.
• Communicate them throughout the organisation.
• Evaluate the quality policy, its stated objectives and then prioritise requirements to ensure they are met.
• Identify the boundaries of the management system and produce documented procedures as required.
• Ensure these procedures are suitable and adhered to.
• Once developed, internal audits are needed to ensure the system carries on working.

ISO 14000 Environmental Management Systems

The shipping industry is also encouraged to apply the ISO 14001 2004 which is an environmental management standard. It specifies a set of environmental management requirements for environmental management systems. The purpose of this standard is to help all types of organizations to protect the environment, to prevent pollution, and to improve their environmental performance.

ISO 14001 is now implemented in more than 159 countries and has provided organizations with a powerful management tool to improve their environmental performance. More than 223 149 organizations have been certified worldwide against ISO 14001 at the end of 2009, which is an increase of 18 % compared to 2008. Many companies have improved their operations and reduced the impact of their activities, processes, products and services on the environment by using a systematic approach that seeks continual improvement.

The benefits of positively addressing environmental issues not only cover the preservation of the environment, but are also linked to business performance and profitability while improving the corporate image, enhancing access to export markets, providing a common reference for communicating environmental issues with customers, regulators, the public and other stakeholders, etc.

Despite of all the efforts in maritime industry all these quality tools while they apply to regulatory activities they do not solve the family problems faced in many family owned shipping companies. These quality tools do not address shareholders’ structures, business governance, succession planning or the position of the shareholders who are active in the business.