GBS Event - Maersk: Our journey, delivery methods and on how we have achieved our results

Our journey, delivery methods and on how we have achieved our resultsKim Walsøe Jensen, Head of Corporat e Service Cent re, A.P. Moller MaerskGlobal Business Services Roadmap, Nordics 2015, St ockholm, April 2015

My Story TodayInt roduct ion to Maersk

How we approached…

- Governance of our services

- Building of a lifecycle model for delivering

- Engagement of staf f through establishing a process excellence method

- Building of a customer engagement model

to establish a last ing delivery method, change in mind-set and ways of working

- And what we have learnt f rom it !

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Maersk Group • Founded in 1904 • Represented in over 130 count ries,

employing around 90,000 people • Facilitat ing global containerised t rade

Maersk Line carries around 14% of all seaborne containers and, together with APM Terminals and Damco, provides infrast ructure for global t rade.

• Support ing the global demand for energy The Group is involved with product ion of oil and gas and other related act ivit ies including drilling, offshore, services, towage, and t ransportat ion of crude oil and products.

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Maersk Group portfolio

MAERSK LINE MAERSK OIL MAERSK DRILLINGAPM TERMINALS APM SHIPPINGSERVICES

Self-fundedEBIT 5%-points > peers

Grow with market

2014

400,000 boepdROIC at least 10%

during rebuild

2020

USD 1bn NOPATGlobal leader

2016

USD 1bn NOPATSignif icant posit ion in ult ra-harsh, ult ra-deep

2018

USD 0.5bn NOPATSelf-funded

2016

Investments: Maersk Container Indust ry, Höegh Autoliners, Others

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Key f inancial f igures

Maersk Group highlights 2014 (USD Million)2014 2013

Revenue 47,569 47,386

Prof it before depreciat ion, amort isat ion and impairment losses, etc. 11,919 11,372

Prof it before f inancial items 5,917 7,336

Prof it before tax 5,311 6,620

Prof it for t he year 5,195 3,777

Return on invested capital af ter tax (ROIC) 11.0% 8.2%

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Some meaningful numberspage 6

Some meaningful numberspage 7

Init iat ives that have delivered results over the past 3 years

• Regular SSC vs. CSC• Service LevelsGovernance

• Review Delivery method• Sourcing in the broader senseDelivery method

• Implement ing Process Excellence• Driving standardizat ion

Operat ional Excellence

• Building customer interact ion modelCustomer Engagement Model

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Maersk Group Funct ion st ructure

MAERSK LINE MAERSK OIL MAERSK DRILLINGAPM TERMINALS APM SHIPPINGSERVICES

Group Finance

Accounting, Legal, Sustainability, Finance & R isk

Management

Group Procurement Group Communication and Branding

&Group Public affairs

Group HR Group Strategy&

Investor Relations

Group CEO

MAERSK LINE

MAERSK OIL MAERSK DRILLING

APM TERMINALS

APM SHIPPINGSERVICES

Group funct ions manage:• Minimum requirements• Risk and cont rol act ivit ies• Value adding act ivit ies

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Born out of the f inancial crisis, matured in the Global Service Centre (Maersk Line) and grown into Corporate Delivery Centre• First period was about forming the Service Centre, Fire fighting, establish a production

like mind-set and taking the quick wins

• Second period was a maturation phase where process excellence and a better understanding of the delivery method was introduced.

Furthermore change of reporting lines to Group functions from Maersk Line

• Lastly we have spend the last couple of years on:

• Maturing of processes and understanding what to deliver to whom in which quality

• Right sourcing of activities

• Having service levels in place for all services

• Delivering sustainable savings

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Corporate

IT

Transition

& Transformation

CSC

Finance

HROperations

FacilityManagement

Delivering IT to the Maersk Headquarter and IT for cross Business Unit

services

Deliver headquarter Finance and Accounting

and Treasury Management Operation

across the Group

Delivers project management for change

projects in the Headquarter

Delivers payroll and other compensation and benefit related operation

for 6.000 Danish based employees

Delivers well functioning headquarter facilities for

2.500 employees

Corporate Service Centre2015 Focus areas

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Governance for all services in place

• Established SLA’s for all services in place

• W e do not invoice our services however track all costs to a service line and service owner (including allocation of FTE usage) in order to create vis ibility

• Established Governance Boards for services like Facility Management and Accounting ensuring that all services have clear ownership

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The

agile

head office

Transformat ion of corporate processes is not a one-t ime act ivit y but a journey

Staying there2Get t ing there1

Separating non-core

from core HQ activities

Stabilization

Sourcing solutionD Opt imise t he process

Migrate t he processA

Deliver t he processB

Source t he processC

Manage the vendorE

Re-evaluate sourcingF

Re-negot iate cont ractG

Re-focus t o business needsH

Re-engineer processI

Develop and adjust

to evolving business needs

Challenge conventional

process set-up

Benchmarking

Continuous improvement

HR

FM

IT

FinanceB A

D

G

HE

C

F

I

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The journey creates pressure on the organisat ion…. and focus

• W e have a relentless focus on ensuring delivery of the required quality at the lowest possible cost

• Measure our services (quality and cost) via benchmarking and act on conclusions

• Have a focus on having the right people on-board with the right mind-set

• W e recognize that by constantly measuring and evaluating how we are performing the staff can feel quite some pressure

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Background:

W e decided to use Process Excellence as a means to install work routines that will ensure that the organisation delivers to promise and continues to optimise the activities within its remits .

The concept of Operational Performance, Level Two was created through the process of establishing a framework that f its into the context of the CSC, inspired by the approach of the Maersk Line Global Service Centres .

Implementation Strategy:Create a change in mind-set that through understanding and empowerment delivers

superior results over time through sustainable change

Framework Design Parameters

Understand who the customers are and what is important to them Define how to deliver value to customers as eff icient ly as possible Review performance and adjust as relevant Speak with data Cont inuously ref lect on our values and relate them to how we operate Cont inue to learn Minimise f iref ight ing Collaborate in process teams Lead at the right level Empower and enable our teams to improve processes as part of

everyday work

Our Path

1. Understanding

2. Ownership

3. Ambit ion

4. Accountabilit y

?

Improvements based on:

Voice of Customer

Voice of Process

Voice of Team

Current state

Desired state

Time

Impact

Creat ing a change in mind-set through st ructure

• Which customers?• Which processes?• Which t eams?• Performance?

• These customers!• These processes!• These t eams!• Deliver t o promise!

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Visual Management System Actively used to track performance

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We see that process excellence deliver the business results in e.g. Payroll

44 % customer sat isfact ion increase27 % cost reduct ion67 % increase in Payroll throughput

And through standardizing and maturing the service we were then able to review our delivery method..And decided to outsource the Payroll services one year ago

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Who is involved in the governance

Head of Function updates CSCSenior Management

Professionals

Customer responsible updates Head of department

Team updates Customer responsible

Customer &Professionals

Daily operations

CSC Group functions

CSC Senior Management updates Head of Function

Head of Functionupdates Customer responsible & team

Customer responsibleupdate Operationalteam

Senior Management

meetings

Head of CSC Head of Group

Function

Process ownerService manager

Yearly review Head of CSC Yearly (end year)

Group CFOHead of GAHead of GSO

Head of HR OPS Head of FunctionDecision maker

meetings

Service deliverymeeting

Input gathered for Yearly Review

CSC Senior Management updates Head of Functions

Customer Engagement Model

• Structure is fairly easy to establish. Living the structure requires some getting used to

• Getting the customers on-board requires an effort and the work is worthwhile

Second generation KPI’s in process of being rolled out where we look at end-2-end KPI’s - regardless of us operating the service end-2-end

• Asking about customer feedback requires courage

• The model ensures that we get understanding of customer needs and wants

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That was our journey and lastly some thoughts on our learnings

We have learned that ……

• Being focused on what to deliver to whom in which quality sounds easy … And when we get it right it is worthwhile the effort

• Performing right-sourcing of a service is a skill that we are mastering however change management of the retained staff is something that we still can improve on

• W e do not have a mandate to operate services or expand service scope and thus have to earn our stripes

• Conflicting interests between Headquarter needs/wants and BU’s same forces us to be sharp on how we can deliver value – and de-scope if we cannot

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Next steps

• Cont inue to deliver to promise• Maturing vendor management

capabilit ies even more and looking at how we can get more value out of output based sourcing cont racts

• Cont inue to support the HQ in opt imising the processes

• Cont inue to focus on where we can create value in the process

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Thank you

[email protected]

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