Upload
others
View
9
Download
0
Embed Size (px)
Citation preview
Private & Confidential
Project MAX
Analyst Meeting
15 November 2016
2
MAX Agenda
What is Project MAX?
What does Project MAX do ?
How could Project MAX improve
PTTGC’s performance?
What we have done so far …
3
PTTGC strategic direction
From the aspiration to be the first quartile-performance company
4
What is project MAX ?
New normal
To adjust ourselves to the new normal, Project MAX is aimed to improve
Performance and Organizational Health in sustainable way
5
9
16
26
Why performance & organizational health ?
3x
TRS over time (%) Org Health
Top quartile
Middle quartiles
Bottom quartile
Average Total Return to Shareholders (TRS) by health quartile (9 year average)
Companies with top quartile health deliver on average 3x
greater TRS over time
Source: McKinsey
Aspiration path of PTTGC “transformation”
6
What does Project MAX do ?
Organizational health Performance
Productivity oriented
Work process improvement
Collaborated and cross-functional
Partnership with external stakeholders
Classroom / OJT training
McKinsey Academy
Experiential learning
Shift employee mindset
Drive 4 core behaviors
Build new capabilities
Increase capacity for renewal
Values/ Culture
7
How could Project MAX improve PTTGC’s performance?
Process
people
mindset
8
Whole picture of Project MAX
Performance Top down diagnostic 6 weeks
Overall assessment “Assess full potential”
Phase 1
Deep-dive analysis and implementation Deliver full potential
Phase 2
Bottom up
planning
12 weeks
Transformation
implementation
24-30 months
Phase 3
Health
Performance management
▪ Track the progress of transformation and maintain the momentum to ensure rigorous execution
Capability building
▪ Deliver training programs on key functional topics
▪ Bring new tools & techniques ▪ Embed new mindset and desired behaviors
9
Phase 1: Assess full potential thoroughly
Performance Top down diagnostic 6 weeks
Overall assessment “Assess full potential”
Phase 1
• Use the same assessment methodology as the Private Equity’s due diligence process to estimate the baseline (As-is) and EBIT uplift potentials
• Focus on efficiency improvement via
Equipment upgrade, standard/ work process improvement
Introduce new tools/ techniques to increase the efficiency
• Project scope includes initiatives that have payback period not over 3 years
Phase 1 concept: What could we do? 2016
Mar-May
10
Potential improvement from top down assessment R
ecu
rrin
g E
B I
T
Lever
Plant operations & maintenance
A
Commercial & marketing B
Sub-lever
Supply chain & Unit Optimization
1
2 Energy Efficiency
3 Maintenance
Turnaround 5
4 Availability
Procurement C
Small to medium CAPEX D
Cash
sa
vin
g H
Spare part inventory G
Refinery & Shared
Facilities Aromatics Olefins
Polymers EO-Based
Performance
Green Chemicals
Phenol
3 GPCs + 4 BUs
11
Phase 2: Deep-dive analysis and implementation
Performance Top down diagnostic 6 weeks
Overall assessment “Assess full potential”
Deep-dive analysis and implementation Deliver full potential
Phase 1 Phase 2 Phase 3
Bottom up
planning
12 weeks
• BU representatives, consultants and industry experts jointly develop the Bankable plan of the initiatives, including
Deep dive analysis
Quantify impact
Action plan and key milestones
Financial projection for both implementation cost and benefit
Phase 2 concept: Step-by-step planning what we’re going to do
2016
Jun-Aug
• Set up the “Transformation Office (TO)” as core team to expedite the decision making, shorten process time, clear roadblocks by week to make sure the benefits realization as plan
12
Phase 3: Roll out the transformation process
Transformation
implementation
24-30 months
• Launch a full-scale effort to drive value to the bottom-line
• Follow up the progress and monitor the actual benefit realized against plan
• Develop catch up plan if the initiative could not fully realized as expected
• Continuously initiate new ideas into the pipeline
Phase 3 concept: Launching the spaceship
2016 ‒
2019
Performance Top down diagnostic 6 weeks
Overall assessment “Assess full potential”
Deep-dive analysis and implementation Deliver full potential
Phase 1 Phase 2 Phase 3
Bottom up planning 12 weeks
13
Systematic idea development and performance monitoring
Health
Performance management
Phase 1 Phase 2 Phase 3
▪ Track the progress of transformation and maintain the momentum to ensure rigorous execution
▪ Track the initiative pipeline progress by using a systematic process
Overall assessment “Assess full potential”
Deep-dive analysis and implementation Deliver full potential
14
Expected benefit realization curve
Cumulative recurring benefits (Mbaht)
ILLUSTRATIVE IL2 IL0 IL1 IL3 IL4 Bankable plan
Quick wins within 2016
Details
▪ All step-by-step milestones are planned and validated in Phase 2: Bottom up planning
▪ Validated initiatives (above IL3) will be counted as target of potential benefit
▪ Execution plan will be expedited to achieved target, while new initiatives (IL0) can also be added at any time
Cut-off date to set the target and bankable plan
Phase 2:
Bottom Up Planning
Phase 3:
Implementation
15
Expected recurring benefits by workstream*
CAPEX
Procurement
PHN
GRN
EOB
POL
OLE
ARO
REF
Cumulative recurring benefits along the project period
We focus on holistic improvement of whole organization
We also do not
compromise on
SAFETY and RELIABILITY
Only
initiatives per workstream capture over
of total target
Reliability
ILLUSTRATIVE
Remark : * moving target (as of Sep 16) depends on progress of developing initiatives
100%
16
Build up people capability to ensure the sustainability
Health
Performance management
Capability building
Phase 1 Phase 2 Phase 3
▪ Track the progress of transformation and maintain the momentum to ensure rigorous execution
▪ Deliver training programs on key functional topics ▪ Bring new tools & techniques ▪ Embed new mindset and desired behaviors
Working side-by-side and get mentoring
from global experts
Foster 4 core behaviors among staff
Take initiative to create better results
Work proactively to serve customers’ needs
Strive for the greater good
Keep improving self and inspiring teamwork
Overall assessment “Assess full potential”
Deep-dive analysis and implementation Deliver full potential
18
Shift mindset with new processes & tools
Performance tracking and management tool
▪ Gather all initiatives in one database to see the big pictures
▪ Progress tracking on weekly basis
Sales performance management tool
▪ Support management’s decision making in various aspects, i.e. Sales channel shift, product mix, geography mix
Margin curve
Price waterfall
Benefit dashboard
Procurement tool
▪ Increase price competition among suppliers by introducing new procurement technics
Real time price bidding
19
What we have done so far …
EBIT improvement from increased sales & throughput, adjust customer portfolio
Marketing and sales • Increase domestic market share for refinery and aromatics products by
changing customer portfolio • Engage new customers with new product applications for EO based &
polymer products
Polymer Shift product portfolio and expand the market of High Value-added
Products in domestic and export Increase throughput with minimum investment
Olefins Increase fuel air for higher power generation by using inlet fogging
technology
20
What we have done so far …
EBIT improvement from cost saving by changing / improving work process
Supply chain (upstream) Improve crude & condensate approval process Improve crude purchasing methodology Improve LP model efficiency
Procurement Drive price competition by using different technics, i.e. clean sheet
analysis, e-Auction, expand Approved Vendor List (AVL) pool in potential Low Cost Countries
Sustained CAPEX Shorten the decision making and approval process for investment Scope & schedule optimization
21