Operations Department in a Shipping Company

One of the most crucial factors towards the success of a shipping company is effective operations management.  Shipping companies establish organizational structures and cultures that seek to promote effective operations management.  Some of the major divisions in ship management include commercial, operation, administration, finance, and technical departments.  Operations department is mandated with the task or responsibility of handling all issues relating to shipping management and ensuring that the shipping company undertakes activities that focus on achievement of respective business objectives.  However, this department works in collaboration with the other departments to ensure that all functions and activities are coordinated and streamlined.  Through the coordinated activities, the operations department has several responsibilities and authority that enable it to act as a link between the ship and the office.  This paper discusses the authorities and responsibilities of the operation department as a link between the ship and the office.

Operations management is basically defined as the administration of business processes and practices in order to enhance organizational efficiency in relation to the established business goals and objectives.  In this regard, operations management focuses on transforming products and/or services into profits in an efficient manner (Kettering University, 2016).  The main objective of operations management is planning, executing, and monitoring the provision of products/services by a business organization.  Therefore, operations management is a delivery-oriented concept and practice through which inputs to an organization are successfully converted into outputs, which in turn generate profits (Kumar & Sunesh, 2009).  For effective operations management, the various individuals working in the operations department work in collaboration with others to promote effective decision-making and seamless operations.

In the shipping industry, operations management is one of the most important factors towards the success and profitability of a shipping company.  Effective operations management in shipping is important because of the significance and role of this industry as the most crucial means of long-distance container transportation worldwide (Yuan, 2016).  Since ships carryout approximately 85% of all international trade across the globe, effective operations of businesses and organizations in this sector is very important.  Without effective operations management in the shipping industry, it would nearly impossible to carry out more than 80% of international trade and other associated operations.  Some of the major activities of operations management in the shipping industry include ship routing and scheduling, ship management, personnel management, and ship loading (Yuan, 2016).

Given the significance of effective operations management, shipping organizations or companies have established several functional departments including technical, administration, and operation departments.  Operations department and the technical department are the most important divisions in a shipping organization or company (International Maritime Organization, n.d.).  Business organizations or companies in the shipping industry have established operations departments to help in operations management through handling the day-to-day activities of the company/organization.  As an important division in a shipping company, operations department is mandated with the task of fleet management.  The major roles of operations department in a shipping company include collaborating with other departments in the daily activities of the company and maximizing safe and economic utilization of ships.  With regards to collaboration, the department coordinates ships, ports, agents, and charterers.  On the other hand, the maximization of economic and safe ships’ deployment entails handling all activities or processes relating to planning and scheduling of ships.

As part of ship planning and scheduling, operations department help in ensuring that every ship performs the specific tasks or activities assigned to it (Osinuga, 2016).  In this regard, the operations department carries out several activities or functions including crewing, bunkering, and employing port agents.  Personnel management is an a relatively difficult process because of the complexities associated with crewing a ship.  When handling crewing, the operations department handles several issues including safety of the crew members and flag of registration.  The operations department work in collaboration with the ship manager to ensure that the crew members of a ship comply with the various regulations relating to safety and other relevant aspects of ship operations.

As shown in the previous analysis, the operations department in a shipping company has several functions that are geared towards ensuring effective and successful operations.  Through its various functions, the operations department has authorities and responsibilities that enable the division to act as a link between the ship and the office.  One of the most crucial aspects of the operations department is handling issues relating to ship loading, ship planning, and ship scheduling.  This essentially means that the department is involved in carrying out some tasks that directly relate to ship handling.  Some of the authorities and responsibilities through which the operations department act as a link between the ship and the office in a shipping company include the following…

One of the most important responsibilities of the operations department is coordinating or collaborating with the other departments to promote successful and effective operations.  When collaborating with the various divisions in the company, the operations department also handle activities that are directly linked to the ship (Schramm, 2012).  On one hand, the operations department works with all parties involved with the ships i.e. internal parties (other organizational departments) and third-parties (such as ship agents and bunkering supplies).  On the other hand, the department handles issues that are directly related to the operation of the ship such as navigation, crewing, and ship planning, ship loading and ship scheduling (Medcare Shipping S.A., 2014).  Through coordination, the operations department ensures that ship activities are carried out in a manner that promotes the achievement of management objectives and overall business goals.  The coordination of the various activities in shipping operations by the operations department also involves facilitating the arrival and departure of ships at the desired destinations.

The responsibility of coordination of activities within the shipping company implies that the operations management act as a link through which management objectives are implemented in the daily operations of the organization.  The office establishes objectives that need to be accomplished through shipping activities.  Once these objectives are established, the operations department ensures they are implemented through ship planning, loading, and scheduling.  Through this process, the department acts as the middle-man or link between the office and the ship by ensuring that management objectives are implemented across shipping operations.

The second major role of operations department in a shipping organization is supervising or monitoring all ships.  Apart from the responsibility of providing support to ship operators and coordinating the various shipping activities, operations department is also responsible for supervising the operational aspects of every ship and providing instructions to ship operators when necessary.  Additionally, operations department has the responsibility of evaluating ship performance based on the desired performance goals established by the organization’s management and the Charting Department.  The responsibility of evaluating ship operations and performance falls within the department’s task of fleet management and ensuring successful and effective operations.

The supervision of ship operations and performance provide an opportunity through which operations department acts as a link between the ship and the office.  According to Iolcos Hellenic Maritime Enterprises (2006), operations department supervises fleet operational aspects and performance while at sea or in port.  During this process, the department examines any emerging issues or problems and offer solutions to them in order to enhance operations.  The identification and resolution of these issues and problems is because of their probable adverse effects on the smooth operations of the ships and organizations (Iolcos Hellenic Maritime Enterprises, 2006).  

When monitoring the operational aspects of ships, the operations department maintains continuous communications with various departments in the office, agents, and ship operators.  The constant communications provide a means through which the department links the office with the ship towards smooth operations of the ship and other aspects of the shipping organization.  Additionally, the constant communications by the operations department with the office and ship operators help in effective management of human error and other problems in shipping operations (Wang & Zhang, 2000).  Actually, communications by the operations department helps the office to ensure that the operational aspects of ships are running smoothly and in line with the established business objectives.

The other responsibility through which the operations department link the office and the ship is by monitoring the daily operational costs of all vessels.  The evaluation of operating costs has become a crucial aspect of smooth operations in this industry given that ship owners are facing heightening pressure because of the significantly high costs of financing ships and their operations (Jahn & Bussow, 2013).  Apostolidis, Kokarakis & Merikas (2012) states that operating costs have gained considerable attention in the recent past because its considered as a crucial factor of business survival in the current trading environment in the shipping industry.  When monitoring operating costs, operations department ensure that the shipping organization’s management is up-to-date regarding the various operational aspects and their respective costs.  In this regard, the department maintains continuous communication with ship operators and provides constant updates to the management regarding operational costs.  The reports and updates from the operating department are utilized by the department for decision-making and improvement of operations.