Defining and delivering radical reorganization for securing site survival
A heavily-unionized petrochemical site in France suffering from under-investment and underperformance was brought under the control of new investors working in a joint venture (JV) structure. 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 program 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. Then T.A. Cook identified areas for improvement in maintenance, project engineering, support services and at site level. These included poorly-defined roles and responsibilities, lack of cost estimation and little cost transparency, late scope definition, poor contract set up and variable contractor management.
The T.A. Cook team was asked to provide an opinion of management capability with a view to designing an externally-led but internally-supported change program that would have the highest chance of success. Deciding on a strategy while keeping the existing operating level required an upfront three-month detailed definition and design program that focused on increasing awareness of performance, cost and the ability to influence and set expectations.
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. The benefits included: A goal-oriented management team that fully supported improvement and cost reduction measures, the development of a new organizational structure with clear roles and responsibilities, and the identification and evaluation of improvement opportunities within key processes.
As a result, a 10% reduction in the overall site fixed cost budget within the first year and a 24% fixed cost reduction within the next 3 years has been identified. Also, turnaround costs are estimated to be reduced by 25% on the upcoming shutdown.