Defining and delivering a radical reorganisation for securing site survival

A heavily-unionised petrochemical site in France which had suffered from underinvestment and underperformance was brought under the control of new investors working in a joint venture (JV) structure. The new owners recognised that historic practices and behaviours would have to be overturned and competences upgraded if the site was to become com-petitive.

Objectives and Approach
T.A. Cook was asked to provide an independent assessment of opportunities across the whole plant from maintenance to shutdown  management; engineering to facilities management and inspection to HR.

Given the sensitive nature of the task, the T.A. Cook team initiated the exercise with a comprehensive programme of communication covering staff and unions. Emphasis was placed on ensuring that all major expectations between Shareholders, the JV company and vice-versa were clearly stated and documented.

The site uses a significant contractor workforce which is effectively embedded into the company organisation. Some of the working practices and, especially the expectations surrounding working practices, were symptomatic of long-term relationships.

Specifically T.A. Cook found:
At site level - good union and works council relations, but:
•    a belief that little improvement was possible
•    no overall dashboard or KPIs
•    too few identifiable control and feed-back loops

In maintenance - pockets of good practice, but:
•    poorly-defined roles and responsibilities
•    lack of contractor performance man-agement
•    over-generous standard times
•    inadequate maintenance planning and scheduling, lack of cost estimation
•    mostly reactive supervision

In Project Engineering - good project execution capability, but:
•    late scope definition
•    inadequate understanding of the JV partners’ different validation processes
•    weak definition of Turnaround scope

In Support Services - good SAP imple-mentation and data structures but:
•    little cost transparency and insufficient personal accountability
•    poor contract set up and variable contractor management
•    inadequate controls on localised pro-curement

It was clear that the significant effort expended by the JV Partners over several years to introduce “best practice” had produced disappointing results and a new approach was called for.

The T.A. Cook team was asked to provide an opinion of management capability with a view to designing an externallyled but internally-supported change programme that would have the highest chance of success.

Deciding upon a strategy of keeping the existing operating level required an up-front three-month detailed definition and design programme that focused on in-creasing awareness of performance, cost and the ability to influence and set expectations.

From a solid start of significantly enhanced management belief and under-standing of detail, mid and lower levels of staff were engaged to review processes and organisations if they were fit-for-purpose and determine opportunities. The Definition Phase ended with a Management-endorsed improvement target supported by bottom-up detail and localised buy-in of the actions and changes required for the next 12 month and a 3 year outlook.

Both the new owners and the site management were impressed by the nature and style of the engagement and the speed with which benefits were attained. These include:
•    A management team which is aligned and wholly supports improvement and cost-cutting measures required to secure future investment
•    New organisational structure with clear roles and responsibilities has been designed
•    Improvement opportunities within key processes have been identified and evaluated
•    A clearly-defined implementation plan driven by T.A. Cook but designed together with all significant managers and supervisors
•    A 10% reduction versus the original budget has been identified
•    A 24% fixed cost reduction within the next 3 years has been identified
•    An improvement program has been installed to reduce variable cost as well
•    Project benefits (CAPEX) are in line with the fixed cost reduction targets
•    Turnaround costs are estimated to be reduced by 25% on the upcoming shut down.