Challenging established organisational thinking to achieve a new standard in operational efficiency

Background

Our client is one of the largest conglomerates in Southeast Asia, focusing on the electricity, financial, and food sectors. It has several hydroelectric and geothermal assets in their generation portfolio, as well as several non-renewable power plants located across its country of operation. The client also owns distribution utilities that operate in several high-growth areas across Southeast Asia.

The client was dealing with several critical issues. In addition to the rising price of electricity and government regulations, it was also having difficulty bringing together the different management systems for each of their six distribution units. Future acquisition would add to that complexity if they were not harmonised. Management was also looking for sustainable solutions to streamline business processes in engineering, customer service, and administrative support across all distribution units.

We had worked with some of the subsidiaries under the client organisation before. Based on the results of our prior collaborations, the client invited us to conduct an analysis of its overall operations.

These were some of the results from our analysis:

1. Work order processes were not managed as well as they should be, resulting in progress being hampered and significant time being wasted.
2. The business streamlining process was being tackled in the wrong way.
3. There was no clear understanding between responsibilities and accountabilities for each of the process steps.
4. Current spans of control for some departments were too high or too low.
5. There was a strong belief within the organisation that the solution would come forward by just letting employees do their jobs as they felt best.

To improve the organisation’s operational efficiency, transparency and effectiveness of the organisation, we suggested the following recommendations:

1. Synchronise and optimise processes leading to increased customer service levels, increased efficiency and significant cost optimisation.
2. Review and Develop own personnel and contractor standards to drive increased efficiency and reduce overall personnel and contractor spend.
3. Develop a streamlined organisation structure for increased transparency, improved roles, responsibilities and accountabilities.

Project Approach & Implementation

We set up a full-time task force (consisting of our consultants and several client-side staff) to ensure that the knowledge and experience gained through the implementation, remained with the client. Here are some of the systems that we implemented:

ONE: Improved management practices

1. A new MCS was introduced and implemented to help the client manage activities within a global framework. It assisted the management team to improve its operations with better transparency.
2. We customised a ‘Plan-Do-Check-Act’ tool according to the client’s specific operational requirements to be used for planning, execution, checking, and action-taking. The tool was genuinely effective in driving engineering and customer service teams to work efficiently and effectively.
3. KPIs and scorecards were defined for each department to monitor progress, procedures.
4. Training manuals were written, and employees were trained in the new ways of working.

TWO: Improved operational practices

1. End-to-end work order (WO) processing
   – Sharing of best practice across distribution units.
   – Shortened lead time by eliminating non value-added process steps, e.g. unnecessary handling of documentation.
   – Increased transparency of WO status through one platform.
2. Contractors and gang management
   – Established new standard times for work order activities.
   – Enabled contractors to update work order progress on a daily basis.
   – Reviewed contractor proficiency test requirements and frequency.
   – Implemented and defined reporting tools.
   – Root cause analysis and monitoring of open work orders.
   – Implemented capacity planning.
3. Improved customer service level
   – Integration of call centres.
   – Manpower forecasting and planning for call centre.
   – Established call quality review and monitoring.
   – Weekly complaint review between engineering and customer service.
   – Established case management with departmental SLA.
   – Review of case handling for each department.
4. Clarity of roles and responsibility
   – Streamlined SLA setting for key operational processes across distribution units.
   – Setting of RACI at corporate level for each key step of key corporate processes.
   – Increased clarity in relationships of matrix organisation.
5. Supply chain management
   – Established supplier evaluation model and penalty system to monitor their KPIs.
   – Conducted gap analysis to identify user requirement on inventory management.
   – Review of Inventory Monitoring Report for weekly coordination meeting.
   – Finalised Min-Max levels and setting-up in EBS system.
   – Input of alerts in ERP for upcoming deliveries.
6. Review of organisation structure
   – Established proper spans of control.
   – Improved efficiency in departmental manning.
   – Enabled centralization of some of the departments.
   – Enabled the planning and finalization of a new structure.

Key Results