Closework Global Review - Issue 4

CELERANT CONSULTING Down on the ground helping to drive results up. Global Review 2012

EDITION FOUR

CLOSEWORK®

Bright Lights. Booming Future.Full speed ahead in West Africa.

An optimised Supply Chain doesn’t just align plans, it also aligns practice.

Unlocking Creativity: Alternatives to traditional brainstorming.

Driving Change

2 CLOSEWORK® GLOBAL REVIEW 2012

Change is the constant, the signal for rebirth, the egg of the phoenix.

2012 marks Celerant Consulting’s 25th year of changing people and business. For good.

CLOSEWORK® GLOBAL REVIEW 2012 3

‘I can see the difference.I can even feel the difference.’ European Manufacturing Client

Closework® Global Review is a magazine published by Celerant Publishing on behalf of Celerant Consulting Ltd. Edition Four: June 2012.

Publication Director Thibaut Bataille

Chief Editor Lisa Smith

EditorsUS & EMEA Marketing Teams

Editorial conception and realisationPatrick Keating

Design conception and realisationAndrew Barnes-Jones

ContributorsCelerant Consulting thanks all its Clients, Friends of the business and Celerant teams for sharing their exceptional experiences and knowledge with us.

The words, photos and images in this publication cannot be used without the express consent of Celerant Consulting Ltd.

For more information on business solutions, sector expertise, service lines and insights mentioned in this magazine, please visit:

celerantconsulting.com


Driving Change

Leaving My Mark On The World

Celerant’s Pamela Griffin leaves her mark in

Ipalamwa, Tanzania with Global Volunteers.

A New Beginning At The End Of The World

Clients don’t usually ask Consultants to help

them totally change people’s lives, but that’s

exactly what Technoserve did in Mozambique.

Mining For Knowledge

Celerant sponsors the Prospectors &

Developers Association of Canada (PDAC)

2012 International Convention in Toronto.

After Working At Our Desks All Day

We Decided To Stretch Our Legs

Client and Consultant create a winning

partnership at the Rome Marathon.

C-Cube Opens More Doors

Celerant’s unique club for Masters of Change

is now open in Paris, Doha and Dusseldorf.

Driving Results

Riding The Wind Of Change

Helping Siemens Wind Power expand from an

ambitious entrepreneur to a genuine global player.

The Harbour Consultants:

Bright Lights. Booming Future.

Mad traffic, mosquitoes and a midnight

break-in are all part of working life for

Celerant Consultants Maxime B, Cyril F,

Mickaël S and Antonio F on a major

Oil Service Centre project in West Africa.

Global Project Snapshots

Construction, Financial services,

Manufacturing, Energy.

Turning Uncertainty into Global Results

Celerant Consulting Supply Chain

Global Experience


Manufacturing, Chemicals,

Life Sciences, Government Services.

Leading The Field

Getting down on the ground in Europe to help

drive results up for Irish Dairy Board.

Creating Global Value Acceleration

Celerant Consulting Operational

Transformation Global Experience


FMCG, Energy, Manufacturing,

Construction.

Down on the ground helping to drive results up

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agendaDriving Insights

An Optimised Supply Chain Doesn’t Just

Align Plans, It Also Aligns Practice

Translating a global SC strategy into consistent

global action means engaging people at every

level of your organisation.

Unlocking Creativity

Alternatives to traditional brainstorming.

Changing The Way Government

Spends Taxpayer Dollars

Looming budget challenges mean the

relationship between the US Government

and the Contracting community must be

fundamentally redefined. Performance Based

Cost Management is the way forward.

LEAN In Financial Services: Money Might

Make The World Go Around, But People

And Processes Make The Money Go Around

Research by the Lean Enterprise Research

Centre shows that improvement potential

is greater in a services environment than

a manufacturing one. Our global financial

clients would agree.

Meet In The Middle

What’s the best strategy for demand driven

Supply Chains that don’t look like Dell’s?

The Formula For A Successful Change Program

Drawing on his 30+ years career, Paul DeVivo,

CEO of Houghton shares ‘10 Learnings’ that serve

as a project implementation tutorial.

Managing Growth In A High Growth Region

– From Supply Chain Nightmare To Supply

Chain Wonderland

Many Latin American companies are now

regional or global players, but they need to

balance their rapid growth with sustainable

internal change.

Entrepreneur Is A French Word, But Just

How Entrepreneurial Are French Companies?

Collaborative, cross-disciplinary organisations

are still few and far between, says Françoise

Berthier, Head of Change Support/Human

Resources at Sanofi. Yet compared to traditional

pyramid structures, they allow more room

for innovation.

Consulting – Quo Vadis?

Greg Baranszky and JJ Sendelbach of Doublejay

Consulting LLC look at the unprecedented

changes sweeping the industry.

Compelling asset management to drive

shareholder value in the midst of a North

American Chemical Renaissance.

The North American chemical sector is in the midst of

an exciting renaissance, but Operational Excellence

is essential to build long term shareholder value.

THE GRANITE CITY: It’s been a home from

home for almost 20 years.

Celerant Consulting has established itself as a

major partner for Oil & Gas companies in the

North Sea, helping them improve performance

and implement change. Our sector experts give

their views on what now lies ahead.

The Bottom Line Is That Change

Improves The Bottom Line

When we partner with Private Equity firms and

their portfolio companies we help management

teams boldly change the way their business runs.

Driving Ideas

Surviving The Storm Clouds

The French CEO Challenges 2012 Barometer.

Switching To A ‘Can Do’ Mindset.

Niko dominates its home market in Belgium.

Now it wants to dominate internationally. CEO

Peter Watteeuw explains how the company

was galvanised into real Behavioural Change.

Nordic Productivity

Celerant Consulting’s 2011 Survey details the

facts, the fiction and the future.

Rediscovering Our Hunger: Working Harder

And Smarter To Improve Nordic Productivity

Hard work and ingenuity created our present.

Now they must protect our future.

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Printed by Corelio Printing

RIDING THE WIND OF CHANGE.

Driving Results

All thoughts must be distilled into action and action that brings results.


When Siemens Wind Power wanted to expand from an ambitious entrepreneur to a genuine global player it appointed Celerant Consulting to help it resolve 3 spiky issues.

‘ This project fostered cross-continent collaboration which was essential to prepare our organisation for future growth.’ Ingrid Jaegering, CFO Siemens Wind Power, EMEA.


iemens Wind Power is one of the world’s largest providers of complete wind power solutions for offshore, onshore and service projects. Rapid global growth had created inefficiencies in its Corporate and Operational processes, so it decided to launch the LEAPFROG Project and chose Celerant Consulting to help it analyse and resolve 3 key issues: Inadequate alignment between Operational and Financial forecasting; insufficient transparency in Operational business performance; the lack of SOPS and tools in its Project Acquisition and Execution phases.

Virtual collaboration. Real progress. 3 work streams were established at both the company’s Corporate and Americas Headquarters and collaborated virtually to design and pilot new ways of working to deliver:

Integrated Planning: New set-up of the Load (S&OP) Plan. Planning & forecasting processes were aligned between Corporate Headquarters and the regions to ensure faster response times to Sales and less change requests to existing plans. New order forecast, sales planning and capacity demand processes & tools were installed to support more regionalised operations.

A new Management System: A new MCRS® Management System with a KPI navigator was designed and implemented

for Corporate Management (Level 1-2) and Regional Management (Level 2-4) and fact based performance meetings with clear roles and responsibilities for operational improvements were established.

Regional Interfaces: New tools and processes were designed and implemented for all Sales Acquisition and Project Execution phases. Continuous Improvement was guaranteed through root cause analysis and consistent processes and interfaces were installed right across the global organisation.

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RAPID RESULTS RAPID BUY- IN• The company quickly moved to a fact based performance culture. • Operational performance and deviations to plan are now fully visible in the KPI navigator and used to deliver Continuous Improvement. • Changes to the Load Plan have been substantially reduced which enables better planning and forecasting. • The projects standardised, aligned tools and processes enabled the Americas Sales organisation to gain a perfect score in an internal audit.

The Harbour Consultants


Bright Lights. Booming Future.Mad traffic, mosquitoes and a midnight break-in are all part of working life for Celerant Consultants Maxime B, Cyril F, Mickaël S and Antonio F on a major Oil Service Centre project in West Africa.

est Africa is booming. It’s colourful, chaotic and full of energy. The region is undergoing high speed development thanks to its huge offshore oil fields and other natural resources. Everywhere you look there are sky-lines of cranes and new public works racing to create a modern infrastructure in record time. But right now, there are still more bumpy tracks than good roads and more traditional houses than shiny, new air conditioned homes.

They say that if a company wants to do business in China, it’s too late. If it wants to do business in Brazil, it’s just about in time, but if it wants to get ahead of the future it must come to West Africa. Our client has been in the region since the mid 90s. It’s a Port Facilities company working with the Oil & Gas industries. Every minute of non-productive offshore time is a waste of thousands of dollars for these industries, so they use Oil Service Centres, dedicated ports with their own customs facilities and logistics to speed up the loading and unloading of their ships.

CLOSEWORK® IN ACTION


W

The Harbour Consultants


‘ Everywhere you look there are skylines of cranes and new public works racing to create a modern infrastructure in record time.’

Around 15 vessels use this one every day, including giant ocean going ships, complex offshore pipe laying vessels, supply vessels and crew ships that travel back and forth to the platforms. The company is responsible for moving everything within the OSC and our role is to help them increase client satisfaction to the levels of other OSCs across the globe by installing Operational Excellence and coaching their workforce. We’re also working with Procurement, Finance and HR. The long and winding roadBy law every company that wants to do business here has to have a local partner, so this OSC is a joint venture with a local oil company. It was carved out of nothing, expanded incredibly fast and is now so vast that the only way to get around it is by car. We arrive on site at 7.00 am and work through till around 7.30 pm. It’s incredibly hot, 30oC every day, and very dusty. In fact, there’s so much dust that there’s actually a team of people who regularly sweep the roads.

The site entrance is a long and bumpy, dirt road with a sign on the gate that says: ‘No Guns. No Alcohol.’ Container trucks rumble up it day and night and it’s so bumpy that once a truck flipped over. Our biggest problem in getting to and from work is the traffic. In the last 10 years, hundreds of thousands of people have poured into the cities from the countryside, but at the moment there simply isn’t the infrastructure to handle all these people. There’s very little public transport, so everyone gets around by car and they all drive really fast, which means that the only option is to take your life in your hands and force your way through. It’s crazy. Some days it takes us 2 hours to get from the base to our guesthouse – and that’s only 6km. Zinho, Pépé and ZézéThere are 4 Celerant consultants on site, 3 from the French office and a Portuguese-South African colleague. There’s also a VP who comes out once a month to oversee the project. We completed our analysis in October 2011 and

began the project in November with the aim of introducing a totally new culture of performance.

We began by putting in place a visual management system which allows Managers to see exactly what’s happening across the OSC at any given point. We also implemented a planning system that listed each worker’s full name and detailed all the tasks that needed to be done. At first though, the Manager in charge of planning each day’s activities was reluctant to put names against each task. We couldn’t understand why he didn’t know who was supposed to be doing what, until finally he told us. It was because nearly every member of the team has a nickname, just like Brazilian footballers. People only know you by your nickname, Zinho, Pépé, Zézé and so on, so it was almost impossible for him to put a face to their correct name.

Missing parts and ever present mosquitoesAround 800 people work at the OSC, plus all the clients from the Oil & Gas companies.

CLOSEWORK® IN ACTION


Around 90% are West African, but there are also ex-pats from Europe, Eastern Europe, South Africa and India. Operations work 24/7 and dealing with this mixed work force throws up a lot of challenges.

Most people have been here for a while and they’re reasonably set in their ways. This had created a culture where some of them didn’t really feel accountable for their actions, so we saw a few strange things when we first arrived.

One of our prime tasks is to instil this culture of accountability. We’ve already completed this with the top management and now we’re working on it with the middle management. We’ve also made big improvements in the Maintenance Department. When we first arrived there were about 30 pieces of vital equipment waiting outside the workshop for new parts - and some of those parts hadn’t even been ordered because they didn’t really plan or measure workloads. Now we’ve imple-

mented a process that enables them to track a job to completion with the aim of dramatically improving equipment availability to 95%.

We’ve also introduced a ‘Day In The Life Of’ where we track individual operators. During the analysis period we did night shift DILOs and even though we were following the operators by car, we still got bitten hundreds of times because there are millions of mosquitoes here at night. Some clients simply won’t work at night because of them and there is a risk of malaria - in fact someone at the site contracted it just last week.

A region of contrastsWest Africa is full of huge contrasts. You see really smart homes guarded by guys with Kalashnikovs and it can be very expensive to eat in some of the restaurants. But many of these homes also have an outside water tank and their own generator because there are power cuts almost every day. You also see people living by the side of the road in shacks,

just like the favelas in Rio.

It can also be a bit ‘Wild West’ at times. One night an intruder burst into our guesthouse and raced down the corridor chased by the guards. Then a second robber tried to force his way in and another guard had to fire his pistol in the air to scare him off.

It’s definitely an exciting region to work and in some ways it’s easier to effect change here than it is in Europe. Although some of the people we’re working with may lack certain skills, they’re often more curious about new and better ways of doing things. They listen to you and it can be easier to create a feeling of trust and collabora-tion. In Europe a lot of people tend to see Consultants as the ones who are just there to downsize an organisation. Here they don’t know anything about that. They work in a business that’s always growing and their jobs are well protected, so they’re always looking to the future. And what a future it will be.

The Barometerwas conducted

Nov-Dec 2011.

100 Senior Executives took part.

76% of respondents were C-level

Executives, 24% in Senior Management.

Participants represented a wide range of industries.

Over 40% came from organisations

with annual revenues greater than €20bn.

CEOs from CAC 40 and SBF 120 companies were also interviewed.


Surviving The Storm CloudsThe French CEO Challenges Barometer 2012. conomists around the world are still hedging their bets on when and how the current economic crisis will end. Will there be a V shaped recovery? A slow U shaped recovery or a long L shaped recession? For the majority of French CEOs interviewed by Celerant Consulting and L’Expansion Magazine, however, the answer is already clear. It’s a W - and they’re preparing for the worst.

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Driving Ideas

Ideas move fast when their time has come.

*BRIC - Brasil, Russia, India, China.

1. What are your investment forecasts for 2012?

Only 30% expect overall investment to increase in 2012. 30% say it will fall. Increase Stable Decrease N/A

Overall company 30% 35% 30% 5%In France 21% 37% 32% 11%In Europe 26% 26% 32% 16%In BRIC* countries 41% 35% 12% 12%Rest of the world 32% 26% 26% 16%

3. How will your workforce grow in 2012?

39% expect their workforce to decrease in Europe, but 53% expect it to grow in the BRIC countries. Increase Stable Decrease N/A


2. What are your business forecasts for 2012?

Only 55% expect overall business to grow. Increase Stable Decrease N/A


4. What are your profitability forecasts for 2012?

Only 55% expect overall profits to increase. Increase Stable Decrease N/A



Capital investments will be saved at all costs. Unlike 2008, there is no question of sacrificing investment projects that involve future competitiveness. CEOs know that, once again, they will have to drive transformation initiatives to create deeper flexibility and adaptability within their organisations.

The initiative was led by Celerant Consulting’s Paul Pinto,

Senior Vice President, supported Sabrina Laborde,

Marketing Manager. The full article appeared in

L’Expansion, January 2012. L’Expansion is one of

France’s Top 3 Monthly Economic & Business

magazines with a circulation of 800,000

and a web visibility of 1.8m unique

visitors per month.

5. Among the following external factors, which ones are you most concerned about for 2012?

The biggest concerns are the continuing economic slowdown and political instability.

The pursuit of the economic slowing down

The political instability within the Eurozone

Geopolitical crises

Bank failure in Europe

Competition from Asia

Failures from customers

Increase in interest rates

Euro/dollar exchange rate

French presidential elections

Social and fiscal constraints in France

68%

42%

42%

37%

37%

37%

32%

26%

26%

26%

7. What are the main challenges facing your company in 2012?

The Top 3 Challenges are cost reduction, productivity and innovation.

Cost reduction

Productivity

Innovation

Conquer new markets

Managing talent

Organic growth

74%

63%

53%

42%

37%

32%

8. What are your priority actions for 2012?

The Top 3 Planned Actions are to improve productivity, develop innovative solutions and rationalise processes, systems and structures.

Improve productivity

Develop new products or services

Rationalise processes, structures

Reduce overheards

Reduce purchasing costs

Investments on the production tool

78%

56%

50%

39%

33%

28%

6. which are the main internal threats in your company?

The No.1 internal threat is resistance to change.

Resistance to change

Reliability of forecasting system

Growing number of simultaneous projects

Production costs too high

Lack of Human resources on growing markets

Loss of skills/competencies

53%

42%

42%

42%

37%

35%


Translating a global Supply Chain strategy into consistent reality means engaging people at every level of your organisation, says Adel Ouederni, European Supply Chain Service Line Leader at Celerant Consulting. You have to power your SC with efficient humanware and a clear, shared roadmap.

n many organisations today there’s a serious disconnect between the flow charts that show how their Supply Chain is supposed to work and what’s actually happening out in the field. Celerant Consulting’s global Supply Chain experience has uncovered two main reasons for this. The first is a significant disconnect between what many companies believe they have as processes and organisational models and what they really have in practice. The second is that supply chains tend to have hidden bricks, sort of ‘black boxes’, too complex for the organization to recognize, analyze and align. Working with companies across the globe in various sectors, we see how these ‘black boxes’ impact performance and derail overall supply chain alignment.

Supply Chains’ disjointed organizational structures, combined with increasing complexity and cum-bersome IT systems make these black boxes harder to identify and fix. For instance, some IT systems, with obsolete or unsuited rules, can become a problematic rigidifying factor.

Our view is that to develop an efficient, agile Supply Chain you need to recognize these black boxes in order to realign the Supply Chain and have it fully under control. This can be achieved only by putting enabled ‘humanware’ back in the driving seat, which supposes revisiting the organisation, as well as the policies and levers it’s running with. This is why we put a strong focus on the organisational dimension (people, roles & responsibilities, skills and capabilities, change management, etc.) when analyzing,

then transforming supply chain performance.

Also, the objective of any Supply Chain trans-formation should not to be to fix a new static model, but to redefine an adaptive, agile one. For this purpose, Supply Chain organisations have to question the way they operate on a regular basis to discover how their reality is changing and how they can optimize the way the business produces, procures and distributes. We see for example, that some companies use exactly the same logic in their production with 20 customers as they did 10 or 15 years ago with just few ones, leading to significant inefficiencies and a damaging disconnect. Their business, product mix, supply base, etc. has changed, so their Supply Chain must be revisited to adapt to the new reality.

AN OPTIMISED SUPPLY CHAIN DOESN’T jUST ALIGN PLANS, IT ALSO ALIGNS PRACTICE.

Driving Insights

Success always demands a greater effort.

I


‘ Supply Chain is primarily about Organisation and Change Management. In broad numbers, 60% of it is about people.’

In today’s dynamic, globalised markets complexity is increasing, visibility is decreasing and the paradigms that were adopted in the 90s and 20s are no longer enough to ensure performance. You have to satisfy the market, reduce costs, become more efficient and avoid permanent fire-fighting in dealing with new environments and constraints. The only way to achieve all this is to become adaptable, agile and permanently in control of your Supply Chain. This can only be achieved by aligning all Supply Chain dimensions (Organization & People, Processes, Systems and tools, Footprint and infrastructure), end-to-end, from strategy to daily practice.

In Celerant, we have a unique capability to move from Operations Strategy down to day-to-day execution where individuals make a huge difference in putting together the full picture. We work alongside people at every level of the business, because whatever your plans are in theory, if people running them don’t have the means and capabilities to ensure that ideas successfully cascade from the CEO to the sharp end, your Supply Chain can fail. This also means being able to take into account local facets and cultures at every stage of Supply Chain transformation projects. Then, needless to say that in today’s complex environment, efficient humanware is the foremost differentiator in business adaptability.

An efficient Supply Chain is the backbone of every successful business, but it has to be a flexible backbone, which means having robust, rather than rigid foundations. It must be able to regularly adapt to new trends and changes in the market, as well as internal and external network mutations. This supposes to constantly capture the influencing factors on the business.

Supply Chain adaptability has to become an embedded gene within the business so that it can follow a continuous evolution, instead of having to undergo a perilous deep transformation every couple of years or just be reshaped and eroded by the environment.

The Six Pillars Of Supply Chain Adaptability ExcellenceCelerant Consulting believe that Supply Chain adaptability excellence is built on: An Aligned and Integrated Organisation at All Levels: Not just internally, but also with key

suppliers and customers to ensure that all different parts in the value chain have the same targets, work together smoothly and can collaborate to adapt collectively to the changing environment. Supply Chain is primarily about Organisation and People. In broad numbers, it’s 60% about people and organisation, 30% about processes and how value chain components are operated, and 10% about information systems and other enabling tools. Organisation remains the key, but you cannot simply focus on one component: you have to focus on all three at the same time.

An Adaptable Supply Chain Footprint: Regularly reviewing and adapting your Supply Chain footprint is essential to control costs and risks. It may currently make sense to buy components from China for example, but if this means reducing unit cost while significantly increasing lead times or quality issues, it will decrease your adaptability. So all key factors need to be in balance. Footprint review is also about how much capacity you want to have in-house (‘base’ capacity) and how much you need to be able to trigger to adapt to variations (‘surge’ capacity) for an optimal response to demand.

Key Customer & Supplier Intelligence & Collaboration: In today’s fast moving environment, active customer and Supply Chain intelligence is vital to help a business detect trends and pick up any signals which might mean additional risks or opportunities. This means going far beyond transactional exchange, through EDI or other forms of data communication; it means working closely with your suppliers and customers to analyse the risks and opportunities and jointly come up with timely, effective plans.

Integrated Visibility & Planning: The most effective Supply Chains have the best visibility, from strategic planning, to tactical planning, to

execution. A business must then be able to revisit these plans at any time and adapt to any changes in the environment based on a structured and optimal Supply Chain response mode. Integrated Visibility & Planning enables internal and external alignment and collaboration, so that a business can anticipate issues and seize opportunities, not in a fire fighting manner, but with informed decisions and robust rules.

A Direct Link between Operational Excellence & Supply Chain Management: Businesses might talk about LEAN and Operational Excellence in general, but what is sometimes missing is the link between Operational Excellence and overall Supply Chain optimisation and agility. In our experience the two aren’t always hand in hand which is counter-productive. A business might have optimised sites or production lines, but that doesn’t necessarily mean its overall Supply Chain is synchronized and aligned. That’s why it’s vital to have a consistent link between the way the overall Supply Chain is being operated and the way the execution is happening at each individual node.

A Back to Basics Overview: Many businesses have been reshaped by acquisitions or mergers, or extended into new geographies or new market segments, and these additional layers can often corrode the existing Supply Chain rules or make them irrelevant. Unfortunately, many rules are embedded and hidden in IT systems or other forms of what we call black boxes, areas that nobody controls or questions but which can mislead a business. So it’s key that in strategic, tactical and short term Supply Chain planning, existing policies are revisited to make sure that the business is being run according to optimised rules and current reality, not the rules that were set 10 or 15 years ago, or uncontrolled derivatives of those outdated rules.


Driving Results


Tough Targets For Tough Machines

BUSINESS CHALLENGE The client is a leading construction company in the Middle East and has the largest market share of the industry in Oman. It also has the region’s largest fleet with around 7,500 vehicles and pieces of equipment. The company built its reputation by delivering high quality projects to clients in tough conditions and often remote locations. However, after rapid growth in the last decade, increased pressure from new competitors meant that its competitive edge was beginning to erode, primarily because of an ever increasing operating cost base. The company was determined to retain its leading position in Oman, so Celerant Consulting was brought in to help drive a rapid, bottom up productivity improvement programme, with a specific focus on Plant equipment availability and operating costs.

CELERANT SOLUTION The project focused on 4 key areas: Optimising Plant hiring spend and surplus fleet hiring out; Reducing vehicles and equipment off road and Mean Time To Repair (MTTR); Reducing the costs of spare parts by for example, leveraging the utilisation of OEM/Replacement spare parts and tyre retreading whenever possible; Optimising the static plant overall cost of operations by increasing productivity and leveraging subcontracting opportunities.

RESULTS Annual equipment hire costs reduced by 45%. •Off road equipment rates reduced at all main construction sites, directly impacting productivity throughput. •Better managed Equipment Operating costs. •Subcontracting and fleet hiring out increased by 25%, cutting the Plant Department’s overall operating cost. •MTTR reduced by 30%. •A Fleet Tracking tool installed to optimise the allocation, utilisation and productivity of every piece of equipment across the company. •A Maintenance MCRS® Management System fully installed in the Plant Department and a ‘can do attitude’ embedded in the team.

‘I can clearly see the change of attitude and behaviour in my people and the improvements in my department. This was an amazing journey.’ VP Plant Department.

Construction

The Best Medicine For Growth

Financial Services

BUSINESS CHALLENGE The client is one of the world’s largest insurance groups. Across Europe, the industry was consolidating. Customer expectations were rising, driven by the increasing availability of information and choice. This put great pressure on cost, delivery and margins. The company wanted to move into the industry’s upper quartile, so it set a challenging target - reduce operational costs, double premium income and increase the customer base by 50%.

CELERANT SOLUTION Following a 6 week analysis, Celerant proposed a plan that would save over €1m in the first 3 months and many millions in the first year. An inter-departmental client Task Force was established and supported by Celerant to help engage the whole company in finding new ways of working and demonstrate early successes. The approach centred on a new set of competencies, such as LEAN efficiency, which ensured optimised processes and measurable results. Celerant’s experts coached the client through the process, encouraging stretch targets and building skills and confidence. They had to understand the company’s strategic goals and the ‘Voice of the Customer’ to ensure that the process was focused on customer needs, rather than just internal demands. An MCRS® Management System was implemented to secure performance visibility, sustainable results and an effective monitor for the impact of change. One-to-One Management Coaching helped develop leadership skills in an environment where an end-to-end process perspective is essential and was complemented by a rigorous training plan that embedded quality customer service skills right across the business.

RESULTS Over €1m in savings in the first 3 months. •Total benefits of € millions, 40% higher than target. •A cost-neutral project by the first milestone. •Claims handling efficiency improved by 40%. •Central Claims non-value added activity dropped 42%. •Ad-hoc sickness in the Customer Retention Team dropped 30%. •Call waiting time dropped 35%.

‘I can honestly say I don’t remember another project which achieved so much so quickly and within sound financial parameters. I wholeheartedly recommend Celerant.’ Transformation Director

CELERANT GLOBAL REVIEW 2011 XXCLOSEWORK® GLOBAL REVIEW 2012 17

More Power More Participation

BUSINESS CHALLENGE The client is a global leader in the Nuclear Power industry. Due to recent events the industry is facing tougher regulations, but performance objectives remain the same. Internal resources at its plants are finite because of hiring restrictions, an aging workforce and the time needed to train new people. The challenge for each plant was therefore to achieve its targets with roughly the same resources. Celerant Consulting was brought in to help make this happen because of the successful Organisational improvements it had achieved at other client plants.

CELERANT SOLUTION The project’s objective was to identify areas to facilitate, simplify and improve employees’ way of working. Celerant did an extensive scoping with more than 10% of the workforce and narrowed their comments down to 60 focused areas. Top management were then engaged to weigh and eliminate irrelevant areas and data analysis, process critics, design workshops and focus interviews were used to further define the selected areas of improvement. The goal was to gain everyone’s participation and belief in the process and identified solutions, so they could carry out the required changes in the near future.

RESULTS More than 800 improvement areas were identified. •From 60 selected areas, 18 were validated by top management as key to overall site performance - maintenance planning of secondary equipment, work authorisation permits process in controlled zones, spare parts management and delivery process to work stations etc. •Each selected area was structured as a typical Celerant project with a MCRS® Management System, Client project manager, team structure and agreed milestones. •Final deliverables were to: work with the 18 client project managers on detailed Steps to Milestones and ensure buy in as they would have to present it and deliver it to the plant director; provide the plant director with the tools and MCRS® to drive and manage those 18 individual projects.

The Sky’s The Limit

BUSINESS CHALLENGE The client is one of Europe’s leading solar module producers in Germany. It’s a vertically integrated company, producing final product modules, cells and basic wafers, but it’s a growth story with particular challenges. The company faced increasing and fluctuating demand and greatly increased competition. So to protect its position and prepare its production platform for the future, it decided to launch a comprehensive Operational Transformation programme. Celerant Consulting was brought in to help because of its extensive experience and its unique Closework® approach to implementation and behavioural change.

CELERANT SOLUTION The programme’s aim was to significantly increase capacity in the short and long term by just over 30%, reduce cost per peak watt and right size the headcount. Working closely with Client Management, Celerant confirmed the original productivity target and a multimillion Euro business case was in sight. The entire workforce was mobilised and aligned to drive beyond the performance limit. Action plans were immediately implemented to address the extensive use of contract employees and detailed plans were designed and implemented to optimise a complex production line. Using LEAN and 6 Sigma methods and tools, Celerant helped the workforce build Process Excellence and create a culture of Continuous Improvement.

RESULTS Long term targets became short term targets. The long term business case was doubled and increased capacity of over 30% was in sight. •Significant yield and throughput improvements were achieved within the first 3 months. •Full project tracking with standardised templates was implemented to professionalise the approach. •Key people trained by Celerant in soft and hard tools to enable them to continuously improve the company and train others.

‘Celerant gave us valuable drive and support from analysis all the way through to implementation.’ Head of Wafer Production

Manufacturing Energy

Driving Change



2012 marks Celerant Consulting’s 25th year of helping clients turn complexity into opportunity.


In today’s uncertain times, companies are looking for Supply Chain flexibility, efficiency and visibility. Celerant Consulting turns complexity into opportunities, helping clients to design their supply chain as a key driver for growth and value. We focus on your people for successfully transforming your supply chain operating model, globally and end-to-end, in all industries & services.

Golden RulesGet results as a way-of-working, not as a one-off programme:

• Make your Supply Chain a sustainable competitive advantage.• Engage leaders own and inspire supply chain excellence.• Implement a lean, safe and clean supply chain operating model.• Work 360°: top-down, bottom-up and end-to-end.

EXPERIENCE 1 Challenge: Generating truly effective Working Capital improvement Location: Asia Pacific Sector: Manufacturing

‘Celerant helped us reduce our Working Capital position significantly in a very short time span, and by engaging local process owners heavily in the project they learn a lot of methods and concepts.’ Managing Director

5 Net inventory and DSO significantly reduced (two-digit %) across 5 regional business units.

EXPERIENCE 2 Challenge: A Pan-European Improvement plan to deliver the targeted savings Location: Europe (7 countries) Sector: FMCG ‘Celerant has a special capability that other consultants companies do not have – you’re really good at going into the details from shop floor to senior management level and you are able to truly solve the issues.’ Supply Chain Director

15 OEE average increased

EXPERIENCE 3

Challenge: Making External Manufacturingwork for you

Location: US, China, India

Sector: Pharma ‘Success means an assured, flexible and partner based supply chain. We will build trust and grow benefits forward.’ Global Vice President

No.1expert benchmark level at managing external manufacturing partners in the least time possible.


Turning Uncertainty into Global ResultsCelerant Consulting Supply Chain Global Experience

Driving Results


EXPERIENCE 5

Challenge: Creating a performance management culture to deliver global supply chain stability

Location: Europe & China

Sector: Telecom

‘With Celerant we have a coach, leader, project manager, expert and a consultant helping us think out of the box. Truly remarkable.’ Supply Chain Manager

95%Supplier delivery accuracy ‘On Time In Full’ risen from 50% to 95%

EXPERIENCE 6

Challenge: Delivering success from raw materials to finished goods through Total Cost of Ownership

Location: Africa and Middle East

Sector: Metals & Mining

‘Celerant made us realise that we were buying the cheapest coils, but not necessarily the most profitable ones.’ CEO

3 inventory write offs reduced by $3m in 3 months

EXPERIENCE 4

Challenge: Putting the power back into a Supply Chain Organisation

Location: North America

Sector: Chemicals

‘While the financial results are impressive, the ultimate goal of the project with Celerant was sustainable behavior change - changing the way people work.’ President, North America Operations

$10mSavings in inventory right-sizing

EXPERIENCE 7

Challenge: Creating Data Driven Numbers to optimise the allocation of scarce wood resources

Location: Scandinavia

Sector: Pulp & Paper

‘In our industry, aligning the processes between our businesses is very challenging. The practical tools, best practice project management and not least, constant pacing provided by Celerant Consulting, made all the difference in making this happen in such a short time.’ Demand & Supply Process Director

10Weeks to design and install a robust, scalable Demand & Supply Planning Process for the whole Northern European Supply Chain



Driving Insights


Innovative problem solving can only occur when traditional, ineffective techniques

are challenged, argues Greg Kinsey, SeniorVice President at Celerant

Consulting. Sometimes you have to turn the established

thinking upside down.

Alternatives to traditional

brainstorming.

UNLOCKING CREATIVITY

hen faced with a tough problem that requires an innovative solution, many companies automatically turn to traditional brainstorming techniques. A team comes together in a conference room, with everyone seated around a table staring at an empty flipchart. The team leader usually controls the flipchart, or appoints a ‘scribe’ to do the writing and after a short discussion and a bit of wordsmithing, everyone settles on a problem statement which is written across the top of the flipchart. Then the leader says ‘Right, let’s brainstorm some possible solutions.’

The process begins, as individuals volunteer ideas and the person at the flipchart writes them in a list. Soon the team becomes quite animated and the ideas flow so quickly the scribe can barely keep up. Eventually the ideas trickle to a stop. The chart has a long list of possible solutions, so the team then goes through the process of combining, pruning and consolidating the list into the equally traditional 3 to 5 potential solutions, before voting to select the best idea. The brainstorming session is now over. But how innovative were the ideas generated? Probably not very. How much creativity of the team was tapped? Probably very little. Truly new ideas rarely come out of such sessions, yet this type of brainstorming plays out every single day in conference rooms around the world. So why does it fail? And what are some better alternatives for unlocking creativity?

Allow time for reflection The first weakness of this approach is that idea generation immediately follows the formulation of the problem statement. Research shows that people need a period of reflection, allowing the brain to focus on the problem for several days to really formulate creative ideas. This inward thinking process is often passive and can occur while driving, riding a bus, jogging or just standing under a warm shower. In fact, some of the very best creativity occurs while you sleep and your brain continues to work on the problem, hence the expression ‘Let me sleep on it.’ Consequently, it is recommended to separate the problem formulation from the ideation process, by a few days or a week. If the problem is already well defined, it can be simply sent in advance, asking the team to reflect on it before the ideation session. If the problem is not well defined, you should create two separate meetings with a week between them: one meeting to agree on the problem statement, another meeting to generate solution ideas.


WThe second problem with classical brainstorming sessions is that the idea generation is biased. It’s controlled by the social norms and political agendas within the group, which means that people tend to agree with the ideas of the most influential members and avoid proposing ideas that are controversial. Also the most extroverted or popular people tend to control the idea flow, so the group does not participate equally. Ideas from timid or unsure people may not even be spoken, let alone transferred to the flipchart. International groups can often be hampered by language inequality. Even worse, people are sometimes afraid to voice a thought which they fear is a stupid idea. A proven approach for overcoming these issues is a technique called brainwriting. With brainwriting, participants are given post-it notes and asked to generate as many ideas as possible within a defined timeframe, usually 5 or 10 minutes. A variation is called ‘Brainwriting 6-2-5’ in which 6 people each write down their 2 best ideas within 5 minutes. Regardless of the specific format, the act of privately writing ideas instead of having to say them in front of a group removes much of the bias and inequality from the process. To ensure anonymity, make sure that everyone uses the same color post-its and the same type of pen.

Disrupt established patternsA third problem with traditional brainstorming is the lack of stimuli. A bleak white conference room in a familiar office building is simply not conducive to creativity. There is nothing to stimulate new thinking or prompt new ideas. In fact, the workplace setting actually reinforces the status quo and kills creativity. The workplace is the wrong place. It is far better to meet in a different physical location: an offsite hotel or conference center, a café in the train station, a quiet corner of the airport, someone’s house, a baseball game, ein Biergarten, a ski chalet, a dairy farm, the science museum, in your factory, at a customer site, on a walk in the woods or a city park.

Regardless of where you decide to meet, the most important thing is to have external and random stimuli -- such as advertising, magazines, music, exhibits, different people, different landscape, different smells and different tastes. A random stimulus forces you to move your thoughts to new ideas and new associations. It serves to disrupt established thinking patterns. Another problem with traditional brainstorming is the absence of new insights. Teams tend to think within their current paradigm. They have often been in the company, and the industry, for many

years and have little insight as to how similar problems may have been solved elsewhere. There are a range of techniques to overcome this problem. Open Innovation is a method for engaging the user community or marketplace in contributing ideas. It is commonly used in the software industry. Ethnography is the study of how people really use your products and services, sometimes revealing surprising discoveries – such as when the bicycle industry saw how California teenagers were converting their products into mountain bikes, a product they’d never even imagined. Or Biomimicry, which is the adoption of solutions occurring in nature. When the glass industry was looking for ideas on how to engineer self-cleaning windows for example, they found the answer in the structure of the lotus leaf.

Is the answer already out there? Another popular methodology is TRIZ, or Theory of Inventive Problem Solving, which is based on the notion that all problems have already been solved elsewhere. By defining a problem with specific parameters and characterizing the con-tradictions of those parameters, you can source ideas from the 40 inventive principals of the TRIZ framework, which were derived from over 2 million patented inventions.

Cross-Industry Benchmarking or the borrowing of ideas from other industries, is another underused concept. It can bring a wealth of new ideas on how to solve tough problems. For example, a perfume company looking for ways to reduce counterfeiting may not find too many new ideas by benchmarking within their industry. However, they could probably learn something new by looking at how leading pharmaceutical or ink-jet cartridge businesses address the same problem. Cross-industry benchmarking can provide new ideas that no competitors in your sector have discovered.

So if you really want to unlock the creative potential of your organization, stop the endless routines of uncreative brainstorming. Innovative problem solving will only occur when ineffective techniques are challenged and replaced. While there is no single silver bullet for innovation, there are a number of best practices which any organization can adopt – just a few of which have been touched upon in this article.

Think about it… and sleep on it.

Driving Insights


natural conflict between what they should do in order to be more efficient - and what they actually do to meet their expenditure and program objectives. With pronounced long-term budget challenges now facing our nation, Celerant Consulting believes that a much greater emphasis must be placed on significantly increasing the probability of success for Government contracting so that it can achieve greater efficiencies that are both understood and measurable.

Current thoughts within the U.S. Federal space on acquisition and programmatic efficiencies already indicate some willingness to consider new ways of approaching contracting. For example, contracts that provide smaller incremental payouts to ensure that success is consistently demonstrable and measurable , or longer contract terms to minimize the workload on the contracting community, have begun to appear throughout the U.S. Federal and military space. Unfortunately, such changes fundamentally do nothing to ensure that the officials managing these billion dollar contracts will receive value for what they have acquired.

Revamp the risk – reward model What’s needed is a way of changing collective thinking towards increasing the probability of

he US Government faces a future where more or better work will have to be done for the same or less dollars. That means the risk - reward relationship between Government officials and the Contracting community will have to change. It sounds simple, but given the cultural and behavioural changes that will be required to break the current legacy processes that influence how taxpayer dollars are spent, it could prove difficult without the catalyst of a fresh perspective. With a 95% success rate in value-based consulting for commercial clients and a track record of successfully changing behaviours, Celerant Consulting can provide that perspective.

We believe that not only can the current levels of performance be met within shrinking budget cycles, they can be dramatically improved.

Think differently Act differently The process by which Government officials manage congressionally approved budgets is complex and often fraught with politics. They must remain vigilant on how taxpayer’s dollars are spent, but the Federal Acquisition Regulation procedures they have to follow to manage budgets, continuing-resolution budget delays and fiscal-year constraints create a


Only a few times in our nation’s history has the need for profound change in the way Government spends taxpayer dollars been as apparent as it is today.Looming budget challenges mean that the relationship between Government and the Contracting community must be fundamentally redefined, argue James Biere Marceau, President and Matthew Jankowski, Vice President, Celerant Government Services. It’s the only way to drive greater performance from both sides.

T

success of projects throughout the Contracting community. Celerant Consulting believes this new paradigm can only succeed if it is accompanied by a change in risk versus reward expectations across the Federal Government and its contracted support teams. This must start with a Federal community that is motivated to reduce costs and maximize efficiency. While the Government does not operate like a profit-driven entity, it is worthwhile asking why, unlike in the corporate world, there has been no historical quest for proactive measures to reduce costs in up, as well as down years. The simple truth is that the current budgetary process does not motivate U.S. Government organizations to create one. The current model is: Spend it, or lose it in next year’s budget request.

This is not to imply that U.S. Government workers are complacent within the current environment. The opposite is true. Well intentioned, patriotic and hard working Government employees who are bogged down performing activities that add little value simply don’t have the luxury of trying something different, unless it’s driven top-down through the organization. What’s more, many Government agencies are extremely risk-averse, so it’s virtually impossible to implement a culture of taking risks with new processes or concepts in an effort to maximize efficiencies. In contrast, commercial sector industry partners would not accept, nor even prevail, if such conservative practices were the mainstay in their environments.

Incentivize to change behavioursSo how do you motivate people to spend less when they’re under no external pressure to do so? The challenge lies in first incentivizing the Contracting Officer community with rewards for giving money back or optimising budgetary spends. From there, this change in behaviour will permeate the Contractor base at large, whose members can quickly be expected to adopt a fresh perspective.

In Contracting, as in any business, incentives motivate certain behaviours. Business executives as a group, motivated by promotions and bonuses, will strive for greater profits, usually achieved by driving down costs and increasing margins. Incentives do exist in the current Government contracting environment, but they’re

not aligned to drive the right behaviours in today’s budget and programmatic climate. Another, perhaps greater flaw in the current process is that it also fails to provide the Government with sufficient time to clearly articulate what is realistically needed, and to award contracts to companies that can realistically deliver.

The use of incentives in the U.S. Federal market is not new. A form of Performance Based Contracting that has already been embraced by the U.S. Department of Defense (DoD) is Performance-Based Logistics (PBL), which gave Acquisition Program Managers an opportunity to reduce costs without compromising operational system readiness. By getting the contractor to commit to a performance level, rather than contracting for goods and services, the Government effectively shifted its cost risk to the contractor, which in turn saw the opportunity for a greater profit. Based on the same core principle as PBC, PBL is now gaining wider popularity and attention within the DoD at large.

As a further example, energy-conservation contracts propose fees based on a PBC model where compensation is tied to energy savings. When the annual savings in energy bills exceeds the amortized costs of the services, the customer has little need or desire to be concerned with contractor profits. With the promise of dramatically reduced utility bills, particularly for sizeable, aging Government buildings, these contracts represent a strong proof-of-concept for expanding the use of PBCs into other types of services and are currently in use within some U.S. Federal agencies.

Celerant Consulting believes it is now time to examine how Performance Based Contracting can be applied within all Government organizations to create an ideal environment for:• Greater collaboration across the Government and the Contractor community.• Motivating the Government workforce to share in the agency’s overall efficiency objectives.• Motivating the Contractor to exceed expectations - as profit margins increase. • A greater sharing of the risks and rewards of achieving cost savings.• A tighter management and measurement of expectations within shorter intervals.


‘ Historically, the only time government becomes innovative in cost cutting is when the budget is cut. There’s little motivation when budgets are expanding.’ Greg Rothwell, former Senior Acquisition Executive, DHS.

Reciprocal trust is paramountIn our experience, the recurring theme that has driven successful PBCs is trust. With both the Government and the Contractor having skin in the game, trust is paramount to successful implementation. This in and of itself may be the greatest barrier to implementing what has been proposed because trust can’t be achieved over-night; it develops as a result of an expected and consistent set of outcomes that are tied to the human behaviours of both sides engaging the contract.

American taxpayers are demanding that their government maintain and even increase levels of performance with decreasing budgets. It’s clear that this goal has quickly risen to top of mind for several leading acquisition officials. The time is right for Government organisations to increase accountability, enhance operations, drive cultural change and demand better results. At a grass roots level, the fundamental question which is driving fiscal change in both the public and private sectors is: ‘If the dollars the contracting community spent were coming directly from their personal wallets, would they spend the budgets the same way?’


Driving Ideas


SWITCHING TO A ‘CAN DO’ MINDSET.For over 90 years Niko has dominated its home market in Belgium. Now it wants to dominate internationally. CEO Peter Watteeuw explains how the company was galvanised into real Behavioural Change with help from Celerant Consulting.


nationally successful are also very different from

those you need to be nationally successful.

Being a market challenger is totally different

to being a market leader and the whole DNA at

Niko was that of a market leader, so we didn’t

have the right attitude to grow our international

business in the most successful way. This led us

to the situation in 2010 where we decided that we

wanted to double our international sales within

3 years and at the same time maintain our market

leadership in Belgium. We wanted to take that

cash flow and invest it in international growth.

Now we quickly realised that to be successful it

would not only be a matter of good sales and

marketing efforts, in terms of understanding the

needs of the different markets and providing

solutions, knowing the right players in those

markets and so on, it would also be a matter of

improving our operations - and by that I mean

our operations and Supply Chain. We needed

to make a major shift because for a long time

the company has been an extremely production

oriented company. So we needed to shift to a

more customer centric company.

Also more specifically in Operations, it meant

that where the focus was oriented in a ‘push

order’ model, we now had to make sure that we

could handle what I call ‘any kind of order.’ If

we wanted to grow the business outside Belgium,

certainly at the beginning, orders would come

in at unexpected times and in the volumes that

were not as high as we would have liked to make,

or as we were used to making in our Belgian

market. So we needed to create an Operations

organisation that could react quickly and flexibly

to all the different types of orders from the

different markets. On the other hand it was

absolutely imperative that our quality, costs

and service levels remained the same.

Why did you decide on a LEAN programme?To be honest, we didn’t deliberately choose

LEAN. We chose Celerant Consulting. The

Operations Manager had a vision of LEAN and

was articulating what it would mean in terms of

the programme, so it was a good fit and clearly

what we implemented is covered under LEAN -

the need for change was there, we had to

create an Operations organisation that could

do everything I described earlier and to make

that shift we quickly came up with the main

priorities: We had to increase production

efficiency, we had to maximise production flow

to decrease waste and so on, and we had to

look at our Supply Chain model. What we soon

realised however, was that to be really successful

this Change Programme would have to go much

further than the technical aspects. We would

have to shift the whole mentality of the factory.

As I said, Niko has been very successful for a

very long time, so most people here live pretty

much in their comfort zone, including lower and

middle management. We had to create a real

sense of urgency for change and we wanted to

use an outside party to help us do this. A partner

that could not just help in terms of content,

but also with the whole Behavioural Change

process. And that’s basically why we chose

Celerant. When we had our first contacts with

them and after they conducted the analysis we

felt that the way Celerant operates is by going

deep into the change process, working on the

mentality in the company and creating a sense

of urgency for change.

Has your appreciation of LEAN changed? I had no experience of LEAN implementation until

then and I basically saw it as a method to make an

operational department more efficient. So the

first and most important thing that I’ve learned

about LEAN is that it’s a general business

philosophy that helps you better define your

whole vision and company strategy. It’s not

just focused on Operations, it’s much wider

and deeper than that. The whole concept of

LEAN is to focus on the customer. You have to

think how you can create extra value for your

customer and what the impact will be. So LEAN

helped me fine tune our vision and overall

strategy. That’s the most important thing that

changed throughout the programme.

Continuous Improvement

What was the burning platform that made you start this programme?Niko has been hugely successful in Belgium for

over 90 years, mainly with sockets and switches.

We’re the dominant player in terms of turnover,

margins and market share. But we came to realise

that while this dominant position was a good

thing, it was not so good that we couldn’t grow

other products groups in this market. That was

also our situation internationally. We were not

as successful internationally as we were at home,

mainly because the type of products we were

offering were not as easy to differentiate from the

competition. There was nobody outside of Belgium

just waiting for Niko switches and sockets.

The characteristics you need to become inter-

I also learned that LEAN is not a one-off project.

Once you start you’ll never stop. It’s Continuous

Improvement and this is what I now see happening

on the shop floor. People are driven and they’re

getting this extra motivation because they have

an impact on the process. My main concern

had been how would we keep this going after

Celerant left us? Now I see that my own people

are very motivated and it is going very well.

The third thing that impressed me is what

I would call the power of visualisation. We

had no experience with a lot of the tools that

Celerant brought us, so visualising all these

things was so powerful and effective for this

programme. It also taught us how to better

visualise our other plans and bring them to the

floor. We worked very closely with Celerant and

whenever they asked for help or wanted us

make a decision we immediately responded.

You said that many people were set in their ways. Was it difficult to change them?It was the major effort. Three things needed to

happen for the programme to be successful:

the first was convincing people there was an

urgent need for change - and that wasn’t easy

when the company has been doing so well and

people believed there was a direct relationship

between that success and how they did things.

The second was transmitting our ambition

and objectives to everyone. In the Operations

Department it was clear that we wanted to

change something, but the Operations Manager

needed some help in defining and translating

what exactly we wanted to achieve and how

we were going to achieve it.


The third success factor was changing the culture

and the mentality, and here I’m specifically

talking about changing the management mentality.

We had to become more action driven, more

disciplined and we also had to learn a lot more

about fact based decision making. We were

working a lot, doing a lot, but it didn’t always

correspond to the three things I’ve just described.

My main concern and my impact on this project

has been creating the sense of urgency. Creating

the awareness that there is a need for change

and changing the operational clock speed, not

only in the beginning to motivate people to

get started, but also in how we continue that

by doing things in a more effective way with

a higher sense of urgency.

How easy was it to bring the Voice of the Customer deeper into the organisation? To be honest, there are areas where we are

still struggling with that. The things we’ve

changed on the Supply Chain, they’ve worked

well, but the Voice of the Customer has to

come through our commercial people and

that’s one of the areas where I feel we most

have room for improvement. The whole

programme worked well in the Operations

Department, but with Niko being the company

that it is, we were pretty much organised in

silos. It was top down communication in

most departments, with some bottom up

communication in other departments, but

there was very little communication between

departments and that was something we had

to break through. I think we only partly

succeeded in doing that last year with the

project. There’s more work to be done.

‘ When we had our first contacts with Celerant we felt that the way they operate is by going deep into the change process, working on the mentality in the company and creating a sense of urgency for change.’

Driving Ideas



How are you continuing your change journey? The programme has succeeded in Operations

and Supply Chain. Now we need to keep up

the sense of urgency and take it to the other

departments which weren’t so much of a

priority in the beginning.

Was it difficult to make people understand this wasn’t a one-off, it’s now the way we work?Not in Operations, Supply Chain or the technical

departments like engineering. That’s one of the

great things I discovered walking around the

organisation. People are now self motivated,

they’re proud that they can contribute and

they want to continuously improve.

I would like to add one more thing. When

Celerant left us just before Christmas 2011 it

was clear to me that our biggest challenge

would be keeping this process of change going

without them. I had a fear that we would fall

back into the old habits, but what happened

was the complete opposite. From January our

Belgian market has been extremely strong and

this demand continued throughout February.

We had sales that exceeded by 25 – 30% our

budget and all forecasts by 25 – 30% which

meant we quickly reached our capacity levels,

had backlogs and our service levels were

dropping. People in the Belgian market know

that they can order and we will always supply

within 24 hours, but this unexpectedly strong

demand built up a very serious backlog, so

reaction in the market was pretty strong and

it was impacting our reputation.

I asked for a crisis meeting to figure out how

we were going to handle this. I wanted us to

be back at historical levels of backlogs within

three weeks. The people in Operations took

that challenge on and within three weeks we

ended up at a level that was lower than the

lowest day in 2011!

This was a tremendous success and several

people here have said that they’re convinced

that it would have never been possible before

this Change Programme. And it’s not just

because of the tools and tricks they leaned

from Celerant, it’s because of the total shift in

mentality that Celerant had helped us create.

Everybody took it very seriously, they created a

system whereby every morning at 10 am repre-

sentatives of all the departments got together to

go over the plans, see what problems there were,

then follow up on that and monitor everything

- that was also something we’d learned from

Celerant. There was also a very clear command

structure which was one of the things we lacked

previously in this kind of situation. These meetings

were run very efficiently because they were fact

based and action driven, there was no discussions

around things, people just got straight to the

facts. I attended some of those meetings and

they were very impressive.

Anything you’d have done differently?I wish we had done this earlier.

‘ People are driven and they’re getting this extra motivation because they have an impact on the process.

Continuous Improvement

1 The Nordic Perspective I 2 The Global Reality I

‘People are creative and full

of ideas. If you have the right staff, you get good

input and good productivity.’

CEO Consumer Goods & Services.

‘In Nordic society, the incentive to work is diminishing and the urge to put in extra effort is disappearing. This is in sharp contrast to foreign competition.’

CEO Global Transportation.

Last year Celerant Consulting carried out a major online survey of 175 Nordic Business Leaders to establish the bottom line on Nordic productivity.

Profile: 30% Top Executives, 70% Senior Executives.

12 sectors with 50% from Manufacturing & FMCG. 15 functions with 36% from Operations &

Production, 28% from General Management.

NORDIC PRODUCTIVITY:THE FACTS, THE FICTION

AND THE FUTURE.

Do you believe productivity levels in the country where you work are comparable with other countries?

NO

26%

PROBABLY

35%

YES

39%

AVERAGE LABOUR PRODUCTIVITY 2009 INDEX: 2005 = 10. SOURCE OECD

Productivity levels in Nordic countriesare all below the OECD average.

4 The Nordic Perspective II

How much has productivity increased in your business unit/department in the last year?

23% 25% 34% 6% 11%

5-10%

Don’t Know

20%+

5%0-5%

Slovakia120

South Korea118

USA106

Ireland106

OECD Avg103

Finland101

Sweden99

Denmark97

Norway95

3 The Global Reality II

AVERAGE ANNUAL PRODUCTIVITY INCREASE 2000-2008 (%). SOURCE OECD

Productivity increases are significantly lower in Denmark and Norway – a worrying trend.

Slovakia5.1%

South Korea4.3%

Ireland2.5%

Finland1.9%

Sweden1.8%

OECD Avg1.7%

Norway1.2%

USA2%

Denmark0.3%

Driving Ideas



7 The Power Of Productivity

COMPETITIVEADVANTAGE

16%

PREREQUISITETO SURVIVAL

33%

CONTINUOUS IMPROVEMENT

48%

OTHER

3%

How do you classify productivity gains?

8 2011-12 Nordic Productivity Targets

What is your target for improving productivity in your business unit/department this year?

0-5% 5% 5-10% 20%+ DON’T KNOW NON REQUIRED

8% 22% 51% 10% 3% 6%

9 Measuring Personal Productivity

How do you measure your own productivity?

FINANCIAL VALUE

I CREATE

I DON’T

MEASURE IT

TASKS I COMPLETE

PER DAY

OTHER SPEED OF TASKS

I COMPLETE PER DAY

48% 25% 13% 11% 3%

5 Productivity Levers 6 Improving Value Chain Productivity

What do you think are the most important levers for productivity?

Where do you see the biggest productivity increases coming from in your value chain?

MA

NA

GEM

ENT

90%84%

69% 69% 67%54%

BETTER

PRO

CESSES/ SYSTEM

S

TRA

ININ

G

WO

RKFO

RCE

COM

MU

NICA

TION

TECHN

OLO

GY/

INV

ESTMEN

T

MA

NU

FACTU

RIN

G

75%

58%R

& D

48%

SALES &

MKG

34%

OTH

ER

(SUPPLY CH

AIN

)

Nordic Productivity Survey


REDISCOVERING OUR HUNGER.Working harder and smarter to raise Nordic Productivity.Productivity figures for all Nordic countries are consistently

below OECD average. Business leaders know this must change,

says Hans Lindeman, Head of Celerant Consulting Nordic and

with the right leadership and the right vision it can.

Business leaders know this must change and 51% have a target of improving productivity by 5-10% in their business unit or department this year. They also believe that change will take time and this is underlined by the fact that for some, ‘The Nordic Model’ is seen as a block or a challenge to improving productivity.

The bottom line is that all Nordic countries are going to have to work harder, smarter and add more value to everything they do in order to stay competitive on the global stage. The positive results of the survey however, suggest that our

hat did we learn from our Nordic Productivity Survey detailed on the two previous pages? When asked the question: Do you think productivity levels in the country where you work are comparable to other countries? only 39% of respondents agreed and even they were wrong. Nordic productivity generally lags behind many 1st world countries.* In addition, the Nordic workforce generally works less than many other developed countries, productivity is rising more slowly and the gap to countries that we typically compete with is growing.

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Driving Insights



‘ Hard work and ingenuity created our present. Now they must protect our future.’

* AVERAGE LABOUR PRODUCTIVITY 2009 INDEX: 2005 = 10. SOURCE OECD

respondents believe that we have many of the traits that are necessary to improve such as high education, political stability, creativity and global experience.

Increasing Value Added workSo how do you create a performance based business culture? One that is continually challenging people to learn, to grow, to improve productivity, freeing up information, democratising problem solving and giving people the autonomy to be successful? A critical lever is to work smarter. And the quickest way to work smarter to improve productivity is to get everyone in the organisation to increase their Value Added work - and stop doing things that don’t Add Value.

The Celerant Consulting Workforce Impactability Study 2011 demonstrated the dramatic impact this can have. It tracked the daily activities of 200 middle managers from 6 different industries in the US and after assessing more than 11,000 work hours, demonstrated that operators generate a stunning 50% more value than supervisors.

It also showed that 43.5% of a supervisor’s daily work load can be effectively impacted, so to really drive productivity companies must review supervisor activities in detail and determine which portions of their day can be altered to improve the value add they generate.

This also means examining specific roles to ensure that the right employees are performing the right tasks. Loosely defined roles and ineffective practices create a frustrating daily work experience, with a great deal of lost time. Implementing a simple architecture with clear roles and responsibilities is the first step in breaking this cycle and improving productivity.

Celerant Consulting’s Operational Transformation Service Line has a track record of improving productivity by changing behaviours - and what changes behaviours is simultaneously addressing management systems, processes, people and skills. Our robust MCRS® Management System creates alignment from the boardroom all the way down to the lowest person on the floor and back again. This enables an organisation to create accountability at the lowest possible level. Creating this holistic perspective and process allows Managers to make the right decisions,

Nordic Productivity Survey


improve communication and reduce the negative effects of errors from one department or function to the next. In addition, a team that understands its contributions and feels connected to the entire programme is more motivated to improve performance.

Doing more with less All Nordic countries are well placed to improve. They have high levels of education, stable political models and their citizens are not yet exposed to the type of extreme short-term measures that the Greeks are. Over the last decade Sweden has demonstrated its ability to change and improve its competitiveness and financial strength, and along with Finland is reasonably placed in terms of productivity and hours worked compared to the rest of the world’s high-productivity countries. However both countries must continue their focus on improving productivity growth and building on past strengths, especially Finland which is facing increased national fiscal challenges in 2012.

Norway is in a special category due to its reliance and income from fossil fuels. However, considering that its workforce work fewer hours than any other country in Europe, it should invest and focus on productivity to provide a back-up plan to its reliance on oil and gas and take a leadership position in sustainable development. Clearly at the back of the pack is Denmark, which is facing a very bleak future if it does not do something drastic soon. It has very low levels of productivity growth coupled with a workforce that works comparatively few hours. In addition, it carries the burdens of a very cost intensive welfare system and a growing budget deficit. Faced with increasing corporate taxes a growing number of corporations are considering moving the workforce out of Denmark. If this imbalance is not changed very quickly, the long term effects

could be devastating. It is a negative spiral that could take many years to get out of.

Back to the futureDeveloping a culture of working harder and smarter is the biggest challenge facing Nordic business leaders today and our survey shows that they believe that the Top 6 drivers to achieving this are management, better processes and systems, better communication and training, an engaged and motivated workforce and investment and the overall economy. At Celerant Consulting, we believe that more management won’t help, but better manage-ment will – and when it’s combined with better systems and processes it will actually have a profound effect. There is also no doubt that in the medium to long term, communication and education will have a very positive and lasting effect.

Many people in the Nordic region appear to have become complacent about competition, believing that somehow because our companies and corporations have been world leaders in innovative practices, technological advances and value creation we’re immune to the challenges of global competition. Such complacency has been seen before. Take for example, the Japanese economy. From the 60s to the 80s the Japanese led the world in innovation, technology and improving productivity. Today, that advantage has all but disappeared as the country has stagnated. The Nordic region is definitely not immune to global competition and we’re going to have to rediscover our ambition and drive. We’re going to have to work much harder and much smarter to keep all the benefits that we enjoy in our societies.

Involving, motivating, leading and above all rekindling the hunger in our employees has never been more important.

Driving Change



LEAVING MY MARK ON

Celerant Consulting changes business for good. Celerant employees can also change lives for good. Just like Pamela Griffin in Tanzania.

ve been asked many times by many people why I keep going back to Ipalamwa, Tanzania with Global Volunteers? My answer is that these pictures speak a thousand words.

My answer is also in the words of Antoine De Saint-Exupery: ‘A rock pile ceases to be a rock pile the moment a single man contemplates it, bearing within him the image of a cathedral.’ I see more than a broken down school and a village with none of the basic infrastructure that we take for granted. I see potential in every child, student, teacher and villager. They know education will help provide them with a better future and I want to be there side by side helping them to

build their cathedral, just as I work side by side with my clients.

My personal motto is ‘Everyone Reach the Moon and Stars.’ It’s about dreams and making them a reality, similar to Global Volunteers motto ‘Leave your mark on the world.’ I love that everyone I meet in Tanzania cherishes the moment we volunteers arrive and are there teaching them English, Math and Geography in the classroom, as well as providing our personal expertise. I use my business planning skills to help the local Global Volunteer staff with their many projects: building a clean water system, reconstructing the school dormitories, building a new out-house, cultivating the land to plant next year’s crops of maize and

beans, organizing donated books into a usable library and so on.

Besides the structured time, I cherish just walking through the village talking to the students, sharing our beliefs, dreams, and fears. It’s amazing what you can learn sitting outside a little shop, drinking a warm coca and talking with your rafiki (friends).

So far, I have chosen Tanzania as my home away from home, but Global Volunteers has programs all over the world. If you are interested, please visit them at globalvolunteers.org or contact me direct: [email protected]

I’


globalvolunteers.org

Global Volunteers’ unique philosophy of service requires volunteers to work at the invitation and under the direction of local community partners and one-on-one with local people. Somewhere in the world a child needs your help. As a Global Volunteer you’ll put your personal skills to work nurturing, teaching, feeding, planting, building, shaping - and often, saving children.

THE WORLD.


Driving Results


Feeding A Demand For Mexican

BUSINESS CHALLENGE The client is a major North American food company. Demand for its Mexican frozen food was booming, so it needed to maximize plant production to guarantee customer satisfaction. The facility presented a number of challenges, including an inexperienced group of operators and mechanics, a lack of structured processes and a divided management team with poor management practices. Equipment was showing signs of deterioration because of poor reliability and maintenance and there was limited visibility into where and why bottlenecks were forming and the best way to correct them. To further complicate things, the existing tortilla bakery section was to be decoupled from the rest of the production line and a new one built in an adjacent building. Product quality and food safety were an absolute priority, so Celerant Consulting was appointed to help the company transform the site. CELERANT SOLUTION To ‘regain control’ of the production process the Celerant Team installed a cross-functional problem solving system to fix the root causes of recurring issues and used Closework® to teach improved methods on the line, facilitate clear communication and create a cohesive working environment. They also trained people for the separate baking facility and integrated them into the new processes. Then when a sister production site was fire damaged and its production transferred over, Celerant supported the conversion of one line to include eggrolls, an entirely different process from anything existed. At senior management level, Celerant also coached selected managers to promote fact based decision making and a real results focus.

RESULTS The plant made a profit made for the first time in 3 years. •Overall OEE improved significantly and labor costs and material waste were reduced. •Emergency maintenance was halved and schedule compliance dramatically increased. •Preventive maintenance procedures, reliability SOPs and a new MCRS® Management System to drive Continuous Improvement were installed.

Manufacturing

Safety First. Safety Last.

BUSINESS CHALLENGE The client, a leading North American chemicals company, first appointed Celerant Consulting for a major project at one of its biggest plants that focused on waste water excursions, overall equipment effectiveness and operating budget improvement. With success in all areas, including a reduction in waste water excursions to zero, Senior Management now wanted to use the momentum from that project to improve personal safety at the facility. CELERANT SOLUTION Celerant conducted a safety assessment and as a result partnered with the site leadership team to execute a safety improvement project to raise safety awareness and develop a culture and approach that would drive sustainable safety performance improvement. To execute the project, the joint Taskforce focused its efforts on: Safety Strategy including integration of site goals to corporate initiatives; Safety Initiative Management with a focus on effectively managing execution of selected improvement initiatives; The Management Control and Reporting System incorporating leading safety performance indicators in site safety performance review; Plant Safety Communications to raise awareness on the job as well as awareness of new safety initiatives; Environmental Health & Safety Employee Councils to increase workforce engagement in safety improvement; Incident Investigation Process Improvement that included the consistent utilization of structured problem solving to identify and address root cause. The execution team was supported by an overall steering team that helped expedite decision making and issue resolution.

RESULTS The entire organization was successfully engaged throughout the project. •All project deliverables were completed. •The new sys-tems, processes and behaviors that were implemented for a sustainable safety culture meant that the organization could drive continuous safety improvement once the project was complete.

‘I actually feel that we’re making a big contribution to the long term success of the plant. I’ve never before worked on a project where I feltI was having that kind of impact.’ Client Co-Project Lead

Chemicals


The Prescription For Success

BUSINESS CHALLENGE The client, a major pharma company, was presented with an opportunity to gain a significant edge with one of its specialized drugs. Setbacks among its competitors had created an open field for a dominant prescription which was the clear favorite. A contract manufacturer ran the primary production facility and was expected to meet the incoming spike in demand, however, the company’s 2 facilities in the Caribbean were not up to the challenge. One had been earmarked for closure, calling for consolidation of all production to the remaining plant. Inadequate equipment and the short time frame made this impossible, so the plant previously earmarked for closure had to be brought back to life to lead the way for production. Celerant Consulting was brought in to help make it happen.

CELERANT SOLUTION The Celerant Team implemented a 24 week cross-facility plan, focusing on rapid design and installation at the first plant, followed by replication at the second. The assessment pointed to subpar equipment effectiveness and non-conforming behaviors that slowed the process. The Team looked at 2 areas of concern: manufacturing and quality. In manufacturing, they focused on improving throughput by identifying major bottlenecks and establishing short interval control to monitor and correct the flow. The quality workstream focused on the critical path of record review and disposition to level load the month and shorten the lead time to shipment. They also focused on dynamic scheduling and short interval control to reduce lab errors and cycle time. In addition, the team recorded the process, implementing visual management and active feedback loops for operators to help reduce documentation errors.

RESULTS Over 120 batches consistently produced. •Overall asset utilization was significantly improved. •Active supervision was doubled. •QC lab cycle time, overall record review and disposition cycle time and QA record review cycle time were all improved. •Client record review cycle time was also improved by one third.

Life Sciences

Enabling Core Growth

BUSINESS CHALLENGE Following Celerant Government Service’s success with a sister organization, a U.S. Army Program Office asked us to conduct an in-depth analysis of its operations following a Base Realignment and Closure (BRAC) move. A resource drain due to the move, service level drops, funding concerns and other related issues showed that improvements were urgently needed. Objectives for the analysis included: review management’s strategy and imperatives, understand the current organization and capabilities, assess the BRAC status and implications and lay out an objective course of action for improvement.

CELERANT SOLUTION The Celerant team launched an analysis to understand the current state and capability of the client’s organization. It examined the root cause and drivers of the current level of organizational performance that are process, system and structure driven; the organization’s performance potential; quick win improvement opportunities and an integrated imple-mentation plan to identify any support required to achieve a sustainable state. As a result of this analysis, Celerant was awarded a follow-on contract to: develop key focus areas and contact points to provide real-time data and information to facilitate required work product output; conduct a post BRAC organizational workshop; complete a Fiscal Year 12 staff tax forecast and develop a logistics cost breakdown and program management reporting structure; develop detailed schedules and cost breakdown estimates for PBL; develop future state organizational design and master documentation to include concept plans for military, core, matrix and contractor personnel; establish battle rhythms (MCRS®) that will include a management system, meeting structure in calendar format and a key report structure; develop and negotiate Functional Support Agreements with all supporting organizations.

RESULTS A new, proactively oriented organizational structure, well suited to the demands of the current operating environment is now in place. •Functional support groups with clearly identified requirements and expectations have also been installed. •The client is now prepared to enter the Performance Based Logistics (PBL) arena fully confident in their ability to be successful.

Government Services


Driving Ideas


THE FORMULA FOR A SUCCESSFUL CHANGE PROGRAM.

Understand the client’s view point through inquiry and build your advocacy for support or for an alternative path.

Understand the vision or long term

expectation then build plans to achieve

progress on near term milestones that

are developed for the long term vision.

Do not allow the project scope to have

unreasonable changes. Limit scope creep!

Agree on deliverables from the beginning

and communicate progress frequently.

Ownership for results must be

clear and in most assignments

a leader should be assigned

from the client’s team.

To increase the likelihood for success,

all major organizational initiatives must

have complete buy-in and support from

the organization’s leadership throughout

the initiative. Buy-in must start with the

senior leader.

10

Build relationships with senior leaders to ensure their engage-ment, commitment and contribution to the project.

The client must own every action and decision.

9

Establish and adhere to clearly defined deliverables.8

Develop short term targets, but build long-term platforms.

7

Two way communication is essential

throughout any project. Ask questions to

fully understand an opposing point of view

and clearly explain the reasons for your

point of view. Through inquiry and advocacy

you should reach an agreement on how to

proceed with any initiative.

6


oughton Chemical CEO, Paul DeVivo, recently spoke to Celerant Consulting Americas about his experience implementing Change Programs. Drawing on real-world examples from his 30+ year career with organizations like Unitor, Valspar, Ashland and Houghton, he shared his ‘10 Learnings’ that serve as a project implementation tutorial for Clients and Consultants alike. These Learnings have helped Paul and his Management Teams execute a great number of successful programs over the years.

H

Houghton is one of the world’s largest and longest established suppliers of specialist industrial metalworking fluids and fluid management services.

Rewards and recognition of results

may take time to be realized and

appreciated. Be patient.

In all significant projects metrics should be

developed for measuring the success of the

project. ‘Before measurements’ compared with

‘After measurements’ should clearly indicate

the project’s success or failure. Choose and

agree on the right metrics. Take frequent

‘During Measurements’ to ensure that you are

tracking toward targets and to determine if

adjustments need to be made while you still

have time. Waiting until the end of a project

time line is too late to make adjustments.

Have fun along the way.

This is worth repeating. Many

projects are carve-outs from a much

bigger project vision. It is too easy

to expand the current defined

project scope with elements that

belong in future projects.

Limit scope creep.

Every project should add to

your skills if you are open

to process improvements

along the way. Sometimes

the improvement ideas can

come from the least expected

source. Stay open for learning.

Be patient for the pay-off on your efforts.

5Take measurements

before, during and after all projects.

4

Recognize that Continuous Process Improvement builds skills for future engagements.

3

Limit project scope creep. Stay focused on the project at hand. 2

Enjoy the challenges, celebrate

even the smallest victories, share

praise, stay positive, smile often and

engage the entire team to enjoy the

effort. If this seems too much like

hard work -look for another career. 1

Driving Results



‘ In only 30 weeks we have exceeded our targets. We have the right structure in place, a skilled team and the full engagement of our staff on site to sustain and drive Continuous Improvement.’ Sean McHugh, Group CI Manager.

LEADING THE FIELD.When Irish Dairy Board wanted to create a culture of Continuous Improvement at 3 plants in Europe, it asked Celerant Consulting to get down on the ground and help drive results up.


rish Dairy Board was looking to improve operational efficiency in anticipation of the increase in dairy output forecast from the removal of milk quotas in 2015. The Executive Management Team therefore decided to launch a LEAN Initiative to align operations and introduce a culture of Continuous Improvement into the business, starting with three key locations in Europe.

After a competitive bid process, they identified Celerant Consulting as the ideal partner to make this happen by introducing the new behaviours that would be needed to create this culture of Continuous Improvement.

Rising to the top The project started with the deployment of an Operations Excellence initiative across the three European sites to develop new ways of working

I SUSTAINABLE RESULTS

• The project was completed in 30 weeks and rolled out across all three sites. • 5S audit scores measuring workplace efficiency and effectiveness improvements rose from 60%- 85%. • System Implementation Status audits achieved a level of 80% at all sites, which means that real behavioural change has taken place and a culture of Continuous Improvement has been created. • By project end more than 40 Production Team Leaders were trained and certified in LEAN, led by Continuous Improvement champions at each site, with ownership for sustaining these results.

based on LEAN Principles and internal best practice. Celerant focused on standardising Operating Procedures and installed Short Interval Controls to improve process stability. Kaizen events were performed with Operators and Team Leaders which focused on standardising operating procedures and improving product flow.

Celerant also introduced a comprehensive MCRS® Management System that enabled the three sites to standardise their performance measures and implemented a Root Cause Analysis and escalation process to eliminate production issues.

LEAN training and behaviour coaching at all levels of the organisation, from Plant Managers to Operators, helped to embed these new changes and create the culture of Continuous Improvement that was evident by the improved OEE and Yield KPI’s.

In today’s fast changing environment, companies faced with unprecedented and unpredictable change, may choose to seek shelter and ride out the storm. However, times of market turmoil also create significant opportunities to create sustainable competitive advantage. At Celerant Consulting our aim is to partner with clients on their LEAN journey, helping them to create more effective, nimble and flexible organizations and take advantage of these opportunities. Celerant Consulting focuses on all critical elements for successfully transforming clients business operating model, globally and end-to-end, in all industries & services.

Golden RulesGet results as a way-of-working, not as a one-off programme:• Emphasize LEAN thinking, not lean tools.• Make leaders own and inspire lean thinking.• Work top-down, bottom-up and end-to-end.• Think big, start small.• Focus on reducing waste and invest in growth.

EXPERIENCE 1 Challenge: A Pan-European Improvement plan to deliver the targeted savings Location: Nordic and Eastern European countries Sector: FMCG ‘I have seen many projects but this is definitively one of the best ones. The rigour in multi-site project management is clearly one of the key success factors.’ CEO

7 countries where the programme was implemented.


Driving Results


Creating Global Value AccelerationCelerant Consulting Operational Transformation Global Experience

EXPERIENCE 2

Challenge: A comprehensive change programme to ramp up operational efficiency

Location: Canada & Europe

Sector: Chemicals

‘The good thing about Celerant was that they delivered on their commitment.’ Managing Director

50%higher financial benefits than targeted

EXPERIENCE 3

Challenge: Developing a lean efficiency organisation and a strong platform for growth

Location: Europe

Sector: Financial Services

‘All the evidence shows that we’re now achieving best practice in healthcare insurance. I can honestly say I don’t remember another project which achieved so much so quickly and within sound financial parameters. I wholeheartedly recommend Celerant.’ Director

35%call wait time reduction

EXPERIENCE 7 Challenge: A multi-cultural Change Programme to keep global brands rolling off the line Location: Africa, Americas, Asia & Europe Sector: Manufacturing

‘Our top client scored us as the best performer on installation among its different worldwide suppliers.’ Vice President

3 continents where the programme was implemented.

EXPERIENCE 5

Challenge: Putting Customers at the heart of the business

Location: New Zealand

Sector: Telecoms

‘Celerant supported us to build the framework, driving the delivery and increase our capability to continue improving the customer experience’ CEO

1solid programme management office built

EXPERIENCE 4

Challenge: Improving the level of performance to meet the new business opportunities

Location: North Sea

Sector: Energy

‘Getting to top quartile production efficiency had always been one of the goals. But actually getting number one in the last month of the project gave a real sense of satisfaction.’ Senior Project Manager

$400mtotal annualized value


EXPERIENCE 6

Challenge: A global programme to deliver Operational Excellence

Location: Worldwide

Sector: Life Sciences & Healthcare

‘Celerant absolutely matched our ambition and really adapted their approach to help us steer our manufacturing base. Showing improvements and successes really helped anchor the changes in the organisation. Enthusiasm is back in the heart of our people and that was a great experience.’ President

e270msustainable cost savings

MANAGING GROWTH IN A HIGH GROWTH REGION:From Supply Chain Nightmareto Supply Chain Wonderland.


Driving Ideas


that demand depends on an optimized Supply Chain and managing that Supply Chain has become a complex challenge for many Latin American companies.

These companies need to adjust their operational strategy to develop a Supply Chain model that is flexible enough to cope with even the smallest changes in supply or demand and at the same time optimizes their working capital, costs, cash flow and service levels. This requires Operational Excellence in Supply Chain.

To do this they first need to make sure they’re absolutely customer centric, so they can always have the right products, in the right quantities, in the right places, at the right time. That means asking questions about every step of the process, from sourcing raw materials to designing the product all the way through the manufacturing environment and putting it before the end consumer. How well are we really managing and collaborating with our customers and our suppliers? How do we decide when to switch from ‘We do it ourselves’ to ‘Let’s source some readymade product and customize it in country.’ How do we build our talent factor? What new management systems and new processes do we need? And what’s our most effective organizational structure to create long term, sustainable growth? It all goes back to what the operational strategy is because for many companies rapid growth has totally changed the business model.

Making working capital work harderAnother Supply Chain challenge that needs to be overcome is the issue of working capital. In such rapidly expanding markets a lot of organizations haven’t been disciplined enough as they’ve grown. They have simply said ‘Right,

let’s do it, we need to grow at all costs,’ and then have realized that they have a significant demand on working capital and that the cost of growth is too much. They need to really focus on their working capital, optimize their inventories, cash flows and solve this problem.

There are also the challenges brought on by new or different sales channels. A number of companies in Brazil, for example, have started selling through the internet, which is quite a new thing. Others have decided that they’re going to go direct to their end customers, rather than just sell through distributors. Some are even thinking of opening their own retail stores. Their Supply Chains need to be totally flexible because it’s very different to ship bulk product to Walmart than it is to ship product to perhaps 2,000 of your own retail stores. An added complexity is that not every segment of your customer base has the same needs or wants from your product. So what assortment flexibility are you going to carry in your product portfolio?

Latin American businesses used to believe that they could bring about all these changes themselves. There’s a much greater sense of urgency because they know they don’t have time to develop internally. Rapid growth has fuelled a huge demand on talent within the business, so they simply don’t have the capacity to assign teams to work on internal Change Programs.

Moving from a Supply Chain nightmare to a Supply Chain Wonderland requires vision, tenacity and a group of committed partners. Celerant Consulting together with Tantum Group/Symnetics understand the challenges and has a global track record of helping companies overcome them and reach that promised land.

atin America has a jaguar by the tail. Led by Brazil, Colombia, Chile and Peru, the region is experiencing tremendous growth fuelled by huge natural resources, lower than historic inflation, a strong manufacturing base, rising exports, increased foreign investment and middle class populations that are growing wealthier each year. But success doesn’t just breed success, it can also breed opportunities and many Latin American companies are now at a crossroads in their development.

There are exciting national, regional and inter-national opportunities for growth. As a result, productivity, efficiency and capital allocation are critical. There are also big challenges in maximizing these opportunities with new assets, new equipment, new people or newly trained people, because it all takes time. They need to get the most out of what they already have. People, structures, machinery, logistics, every aspect of the business must be put under the microscope to create an optimized, adaptable, growth grabbing organization.

We like to describe it as having a certain sized shirt when you were 5 years old and now you’re 15 and you’re breaking out of it at the seams. Many Latin American companies have simply outgrown their old business model and need to design and implement a new one that better fits their new size.

Everything depends on your Supply ChainIn the older global economies, with little or no growth, supply is much higher than demand, so the challenge is to do the same with less, or less with much less. In Latin America, particularly Brazil, the exact opposite is true. Demand far outreaches supply, but satisfying

L


Many Latin American companies are now regional or global players, say Gustavo Rojas, Managing Director at Celerant Consulting, Latin America and Mathias Mangels, Managing Director at partner company Tantum Group / Symnetics. But they need to balance their rapid growth with sustainable internal change.

‘ Success doesn’t just breed success, it also breeds opportunities and many companies are now at a crossroads in their development.’


Driving Ideas


Entrepreneur is a French word, but just how entrepreneurial are French companies?

n France, collaborative, cross-disciplinary organisations are still few and far between, says Françoise Berthier, Head of Change Support /Human Resources at Sanofi. Yet compared to traditional pyramid structures, they allow far more room for interconnection and innovation.

I


What do you believe powers innovation?Creativity, efficiency and rapid decision making.

Creativity enables a person, a team or an

organisation to produce new ideas, concepts

and solutions. Rapid decision making is there

to guide creativity and point it in the right

direction – the direction of real innovation.

By connecting people who have complementary

ideas, information or skills, cross-disciplinary

organisations stimulate creativity as much

as they supervise it. Compared to traditional

pyramid structures, they allow more room for

interconnection and freedom of expression, so

ideas multiply, concerted decisions are made swiftly

and this fosters the emergence of innovation.

Why are ‘virtual collaborative platforms’ so conducive to innovation? I think it’s because they provide a unique space,

a virtual space, where people who might not

meet in their everyday jobs can share ideas,

identify possibilities and generally gain from

one another. Within this space, communities

can form across the entire organisation on the

basis of ideas, experience or common interests.

Is a cross-disciplinary approach the only way forward?Many organizations are recognising that it is.

We have reached the limits of overly vertical

systems where decision making processes are

slow and individuals don’t cooperate or share

their ideas enough. All collaborative horizontal

systems, whether virtual or otherwise, offer a new

way of working. They make our employees more

accountable, optimise the development of ideas

and effectively leverage the innovation process.

Is this a turning point in French corporate culture?I believe that it is. For many companies however,

this change will be a real challenge in itself. In

a vertical system, some managers have become

used to closely supervising their teams, which

can prove counter-productive when pushed to

extremes. Horizontal structures change a manager’s

role: he or she becomes an advisor, even a

coach for the other team members. They in

turn become more responsible as the manager

steers their work and their thinking around to

openness and cooperation. Identifying how to

cooperate or how to get others to cooperate to

strengthen projects and results is absolutely

key to innovation.

How easy will it be to implement?It all depends on the existing corporate culture.

No change can be made ex-nihilo or be totally

radical. A company which doesn’t already place

the emphasis on cross-disciplinary cooperation

will have difficulty introducing such information

systems. On the other hand, if there is a real

ambition, they can contribute to the change and

encourage staff to share their ideas and innovate.

The primary condition is that Management conveys

a strong message around the collaboration project.

A message that collaboration equals innovation.

Organisational Structure

‘ By connecting people who have complementary ideas, information or skills, cross-disciplinary organisations stimulate creativity.’

Driving Change



‘ What’s most rewarding is the opportunity to take part in an innovative venture that will ultimately create hundreds of jobs and benefit thousands of locals.’

lmost three billion people live on less than $2 a day across the world’s developing countries. Poverty is a vicious cycle that deprives one generation to the next, leading to inadequate schooling for children, low levels of employment, major health issues, and increased crime, stress and hunger – all of which further exacerbate the situation.

Between October and December of 2011, I was fortunate to have been selected by TechnoServe to join its Volunteer Consultant program in Mozambique. TechnoServe is a DC based economic development NGO with a mission to eradicate poverty by empowering rural poor people to build businesses.

My project was to develop a business plan and financial model for the first commercial soya production and processing venture in Niassa,

Aa province of Mozambique. Described by the locals in Portuguese as ‘Fim do Mundo’ or ‘The End of The World’, Niassa is one of the world’s poorest communities.

The premise for the soya-based venture is to create an Agro-Forestry Village, which is an integrated approach to rural development that combines forestry development with commercial and out grower agriculture. The goal is to uplift poverty by creating additional cash incomes for small-holder subsistence farmers. These incomes can then be used to pay for food, education, healthcare and so on.

You get back as much as you giveOver the course of the three months that I was there, I worked closely with the management team of my client, local technical experts and industry advisors. The difficulty of working in a country like Mozambique cannot be overstated.

The complexity of addressing the needs of multiple stakeholders and empowering the poor to endure short-term risks are further hindered by the tough business and cultural environment: a lack of high quality managers, poor infrastructure, high financing rates, a limited working culture and the prevalence of corruption and employee theft are just some of the issues that local businesses face daily.

The experience in Mozambique has allowed me to gain a completely new perspective on the world from both a social and a business point of view. I have also thoroughly enjoyed exploring the local culture – food, music, arts and language, as well as making a number of new friends. But perhaps what’s most rewarding is having the opportunity to take part in an innovative venture that will ultimately create hundreds of jobs and benefit thousands of local people.


A NEW BEGINNING AT THE END OF THE WORLD.

Clients don’t usually ask Consultants to help them totally change people’s lives, but that’s exactly what Technoserve asked Celerant Consulting’s Howard Sun to do in Mozambique.

If you’re interested to learn more about TechnoServe or about my experience, please visit: technoserve.org or contact me directly [email protected]


LEAN IN FINANCIAL SERVICES:Money might make the world go around, but people and processes make the money go around.

Driving Insights


Research by the Lean Enterprise Research Centre1 shows that improvement potential is greater in a services environment than a manufacturing one, says Ruth Morton, Manager at Celerant Consulting UK.

ever changing environment. Any change, no matter how small, became a major challenge in terms of risk and implementation cost. More importantly, the mindset of many people within Financial Services became change-averse. Today, the biggest need within the banking sector, but also the biggest challenge, is to implement LEAN thinking – total customer focus, empowerment for change, results ownership, out-of-the-box thinking and a culture of Continuous Improvement. These are the new ingredients for successful banking.

Transform your business Celerant Consulting are change experts. We understand what makes LEAN work and have delivered hugely successful transformation programmes across the Financial Services industry. The global programmes we design do much more than reduce costs, they create sustainable value.

A key sector learning has been that most financial institutions have grown complex because of their size and/or multinational footprint. As a consequence, little end-to-end process knowledge, let alone result responsibility for it, exists. In addition, we have found that financial institutions have defined less incentives on operational excellence (leading) but more on financial results which are measures that are lagging current reality. Finally, in most cases the responsibility for these financial results is a group responsibility, leaving it unclear who is responsible for the day-to-day operational results, and therefore continuous improvement. Instead of challenging the current reality, most organisations are set to a ‘Command and Control’ model where activity and people are closely managed, so they’re quite opposite to a transparent LEAN based company - in other words: the product is too detached from the operation; process ownership often sits outside day-to-day operations, resulting in high variations of process application.

ccording to recent researches, 50% of customers across Europe have lost trust in their banks. They’re also more likely to change banks now than they were 10 years ago. Some of the reasons for this are obvious. The global footprint of multinational banks has changed beyond recognition and the customer is often now far removed from their operation. So the challenge for all Financial Service companies is how to make their organisation seamlessly and sustainably customer centric?

Financial Services were the first to adopt in-house developed ERP systems back in the 80s, but because of its risk policy, the banking sector could not rely on third parties to develop its in-house systems. The result was that ‘batch thinking’ was almost invented in the financial services industry. As processes became more and more technology dependent, banks became too big and too slow to adapt to the

A


‘ The global programmes we design do much more than reduce costs, they create sustainable value.’

The goal of LEAN is to open up the work process and streamline hierarchies. LEAN programmes must therefore be applied vertically as well as horizontally to mobilise everyone – and leadership has a key role in making this happen. Horizontally or end-to-end: Without having the full process view, you risk to sub-optimise pieces of the process that in the end, will not have a significant impact on the customer. Vertically or top-down as well as bottom-up: Our research has shown that most LEAN programmes either focus too much on tools and training and not enough on results, or the exact opposite. We believe that only a combined approach can drive behavioural change and produce sustainable results, so a well-balanced programme must:• Be an Integral part of the company’s operational strategy.• Ensure clear targets are set and understood by the workforce.• Combine operational with tactical results.

Value AccelerationValue acceleration represents the vertical and horizontal integrated approach applied when designing and deploying Lean programs. It’s about getting it ‘Right First Time’ whether that’s solving an issue or ensuring the right conversation takes place. To be able to adapt quickly a company must identify opportunities, engage its workforce and build the right systems to measure performance and ensure Continuous Improvement. That way it can iterate its operational value stream cycle and attain top value velocity. Value acceleration is based on 3 fundamentals which are explained further:• Defining lean in the company’s operational strategic context as opposed to a shopfloor-related project• Focus on pro-active thinking by implementing a management system that allows the company to pro-actively manage operational results so that tactical and strategic results are reached on time and in full• Introduce Lean leadership and therefore actively involve those levels that are necessary to take fundamental decisions during the program.

Corrective Thinking to Pro-active ThinkingIn our experience, Financial Services companies tend to be solution focused and uncomfortable with taking time or using data to get to root causes. The upshot is that the only problems that get discussed are the ones with proposed

solutions. When that solution doesn’t work - because it didn’t solve the problem - a new solution is automatically proposed, rather than anyone looking into the root causes of the problem.

The situation is often made worse by the lack of first class operational KPIs – there might be lots data, but very little information that links the operation to the operational strategy. This reinforces the silo mentality, but more importantly, prevents managers from spending time on the floor where value is added. We have known situations where managers didn’t even know where their team were situated and were fearful of going on to the floor.

Our MCRS® Management System is designed to create alignment and support translation of the business strategy into measurable performance at all levels of the organisation. It creates an integrated information flow from executive level to the cutting edge – and back again. It helps managers prioritise and focus on key issues. It also closes the loop on performance by using agreed KPIs and fact based decision making and reinforcing accountability for identified action to support Continuous Improvement. MCRS® drives the move from Corrective thinking to Preventative thinking.

Maximise LEAN LeadershipPeople are absolutely key to successful Financial Services organisations and they cannot be controlled in the same way as machinery. Staff often work in an island, with poor process visibility and a lack of data to drive effective decision making. Industry culture also means that generally people are incentivised to follow processes unquestioningly, rarely using their initiative to solve problems or improve their work. This is reinforced by a hierarchical structure that prevents a clear line of sight across the value stream, and the fact that while there’s a high turnover at the top of organisations, further down into middle management there’s little fresh thinking, creating stagnant processes and little push for change.

In this environment, behavioural change is vital for success. You are not asking someone to change a machine setting, but to change the way they behave. In the set up to any LEAN programme, Leadership’s most important task is to create the climate for successful change

by ensuring their organisation is both willing and able to change. They must challenge the status quo, create a vision and making sure that a strong plan is in place. With our unique Closework® approach, we work side by side with all layers of the organisation to fully implement a LEAN transformation. We combine all the process, system and people elements with real behavioural change, resulting in sustainabile operational and financial results. As one of our recent clients said ‘This is the first programme we’ve had that actually implemented something.’We also advise that performance boards are brought in from Day 1, because if you understand it, you can draw it and involve others to improve further. Only when there is a clear understanding of performance can leaders genuinely challenge and support their managers and workforce.

Changing your culture is the key to everythingAccording to research commissioned by Harvard Business Review, the most effective aspect of LEAN thinking in Financial Services is the ability to speed up ‘mistake making’ - but achieving this requires real behavioural and cultural change,

So how do you create a performance based culture? One that is continually challenging people to learn, to grow, to improve performance, freeing up information, democratising problem solving and giving people the autonomy to be successful? Transforming a business through LEAN thinking is a never ending journey and one of Celerant’s core competencies is changing behaviour to change results. The Celerant 5 Box Model® shows that to deliver sustainable change you have to change behaviour and what drives behaviour is simultaneously addressing processes, management systems and people and skills.

Culture is sustained behaviour across the whole organisation. It’s about scaling up desired behaviours - and that’s where we have a proven track record in knowing what it really takes to make an organisation successful.

1 Going lean: Published by: LEAN Enterprise Research Centre, Cardiff Business School, Peter Hines & David Taylor, 2000.


Driving Insights


MEET IN THE MIDDLE

What is the best strategy for Demand-Driven Supply Chains that don’t look like Dell’s? asks Gregg Macaluso, Director of the Supply Chain Service Line at Celerant Consulting, Americas.


The scenarios where pure Pull or Push strategies apply, even where there is postponement or Push-Pull boundaries are now better understood. Boxes A and B however, pose far greater challenges.

The Continuous Replenishment ModelIn situations where demand uncertainty is low but expected supply lead time short, the model used by grocery and wholesale food distribution might provide a hint to an alternative demand-driven supply chain model.

A Specialty Chemicals supplier, aligned with wholesale and retail building repair/improvement providers, manufactures and distributes a finite, but industry-complete mix of commonly consumed specialty coatings and additives. In this Continuous Replenishment model, the supplier is given historical consumption data from the end-partner in the supply chain. It then takes point-of-sale or other near-real-time consumptive information, typically through shared technologies, and prepares supply to previously-agreed intervals to maintain specific levels of inventory down-stream closer to the customer.

Overall inventory is owned by either party in these alliances, depending on their need and capability to hold it, but it’s amicably pooled and continually managed and refined by all partners to continually improve mutual investment in working capital and improve customer service levels. So much so that one of Celerant Consulting’s Chemical Industry clients recently adopted this rapid-replenishment strategy to reduce lead time between production, distribution and end consumption from 6 weeks to 3-5 days reducing the need for a working-capital intense network of supply.

The Inventory Positioning ModelIn this model, the lead time is somewhat longer, usually a few days to a week instead of hours, but demand volatility (volume and SKU) is also less certain. So the role of inventory changes from having a limited number of products continuously available to having a wide variety and volume of products strategically placed so that once again invest-ment and service levels can be optimized.

e’re all familiar with popular examples of optimized Supply Chains: 5 minute, configured-online, assembled-to-order computers; vessel loads of base-model Toyota Camry’s arriving in Long Beach to be later fit-to-suit regional or individual customer needs; even container loads of New York Jets home jerseys finished with Tim Tebow’s name and number between Sunday’s late-game heroics and Monday’s store opening.

The advantages of late stage differentiation and Push-Pull boundary-setting are well documented and acknowledged.

That’s great for all those companies whose product portfolio is suited to the established and most-often discussed consumer or discrete model. Demand plans get aggregated at family levels where they’ll be more accurate, scaled production is outsourced to a low-cost location, then provide for a manageable number of late-defined customer alternatives to be assembled close to customers with little or no waste. Sounds pretty good.

But how can I guarantee success if my company makes specialty or bulk chemicals, provisions spare parts in a network, or makes products like highly regulated consumables like those used in segments of Life Science? What if the supply chain I manage doesn’t “have an app for that”? Is our only alternative to go back to a ‘Forecast & Sell at a Discount’ strategy?’

Maximize your position on the board(from Simchi-Levi, et. al)1

WCelerant Consulting has recently been working with a Telecommunication Industry client to maximize its Inventory Positioning. The company has a mix of over 5000 network-service components that range in value from $50 to $10,000 each. It serves a range of clients that are guaranteed a level of service up-time/repair within a range of times, depending on the service and configuration of network involved. Historically, the company had forward-placed a large percentage of the mix close to the customer across a 13 state region. This translated to a wide range of material being placed in various quantities in literally thousands of locations no more than 100-200 miles apart over the regional service area.

Upon analysis, we discovered that only 13% of the company’s customers required service within a 4 hour timeframe. This allowed us to consider a tiered inventory structure, where the most frequently used and generally less expensive spare parts are placed close to customers and the more exotic and less frequently used parts are pooled and located regionally.

Reallocating the company’s inventory like this resulted in a 9 figure reduction in a 10 figure spare parts working-capital pool. Streamlining logistics-delivery to point-of-use also made technician inventory control less cumbersome and far more reliable.

Supply Chains that are not typically noted or accustomed to nimble thinking about being demand-centric now have flexible alternatives. Today’s challenging economy demands innovation over ‘Forecast and Hope.’ Considering these alternatives may be a new way to profitably meet in the middle between Push and Pull.

Gregg Macaluso is also Instructor of Supply Chain at the Leeds School of Business, University of Colorado-Boulder.

1 Designing and Managing the Supply Chain:

concepts, strategies and case studies.

David Simchi-Levi, Philip Kaminsky,

Edith Simchi-Levi. 3rd edition.

Pull Inventory Positioning

Continuous Replenishment Push

A

B

Demand Uncertainty

H

L

Lead Time (to Plan, Source.

Make, Move)

Short Long

1


Defusing A Supply Chain Crisis

BUSINESS CHALLENGE The client, a world leader in packaging solutions, decided to centralise its numerous spare part distribution platforms into a single hub, with the support of one of the world’s leaders in distribution and logistics. Within a few weeks however, it was obvious that this new platform simply wasn’t performing as efficiently as expected, leading to huge delays in delivery time. The situation drew critical internal and external customer complaints, a state of ‘crisis’ was declared by Top Management and Celerant Consulting was brought in to lead the response and resolve the crisis as rapidly as possible.

CELERANT SOLUTION The priority was to recover delays and implement the agreed contractual services by the distribution partner in a sustainable way. A crisis governance structure, including a ‘Crisis Taskforce,’ was implemented to tackle non performance. Crisis meetings were convened twice a day to ensure short interval control of key crisis indicators, define recovery actions and ensure that they were followed up until full completion. Within a few short weeks, the collaborative relationship between the client and its logistic partner was re-established, thanks to the results achieved by the taskforce. 3 months after this turbulent situation, the crisis was declared officially over by the Top Management.

RESULTS All key crises were addressed within 3 months: •Daily shipment delays were reduced by up to 95%. •The number of spare parts references waiting for reception on a daily basis was reduced by 90%. •The number of non conformities waiting for treatment on a daily basis was reduced by 85%. •The number of virtual gaps between IT systems was reduced by 95%. •The platform workforce are now managing themselves, platform performance and driving Continuous Improvement.

‘Celerant provided us the appropriate methodology to solve the crisis in the most efficient way.’ Director of Life Cycle Management Worldwide.

FMCG

Driving Results


A ‘Barrel Chasing’ Mindset

BUSINESS CHALLENGE The client is a global, diversified, upstream oil and gas company with a portfolio of producing assets. It had been running an Operational Excellence programme across some of these assets in Northern Europe for more than a year and wanted an independent review on progress. Celerant Consulting was invited to conduct an analysis of the programme and feed back its findings. Opportunities for strengthening the approach were identified, which resulted in a proposal for coaching the organisation to leverage behavioural change and accelerate benefits from the existing processes and systems. 5 assets were identified as locations for offshore support, with an onshore team providing design and implementation support across 3 workstreams, with a big emphasis on coaching.

CELERANT SOLUTION The project’s aim was to deliver improved operating efficiency across the 5 supported assets by creating a ‘Barrel Chasing’ mindset. Working closely with the client team, Celerant’s experts quickly installed a number of Production Loss prevention processes, a Planning and Scheduling process and used its unique Closework® approach to coach Performance Management meetings in order to ensure compliance.

RESULTS All assets are now operating above forecast target line. •PLE processes now fully installed and embedded. •4 key Performance Management meetings installed to reinforce the new performance focused culture. •An improved Planning and Scheduling process has also been installed.

Energy


Building A Better Supply Chain

BUSINESS CHALLENGE The client is one of the world’s largest producers of bricks, pavers and clay roof tiles and had grown rapidly through a series of acquisitions. The financial crisis of 2008 marked a turning point in the pattern of economic development for the global construction industry, so the company asked Celerant Consulting help it maximise cash flows by analysing areas for improvement and designing an integrated Supply Chain planning model that could be rolled out across the organisation. The key goals were to improve EBITDA performance, reduce working capital and provide first class customer service.

CELERANT SOLUTION Celerant conducted an in depth analysis and based on these results, began to design all the relevant elements for the future supply chain. Working closely with the client team, Celerant’s experts defined a new ‘One Way of Working’ across the value chain and organisation with a standardised MCRS® Management System, KPIs and tools. They also developed a new organisational structure with clear roles, responsibilities and IT system requirements. The supply chain function was closely aligned with Sales through a clearly defined S&OP process that was embedded in the European region with a clear RACI. Celerant also developed common processes for product lifecycle management, inventory & order management and production planning and established an inventory planning model to cut inventory levels.

RESULTS A standard organisational design at all sites with a proactive MCRS® Management System, an optimised S&OP process and new processes for Forecasting and Demand Planning. •An efficient Order Management process focused on reliability of Order Book data so that this information could be used in the planning cycle. •A new inventory management process and modelling tool. •Redesigned production wheels and tools for Capacity and Supply Planning. •Product lifecycle management processes and tools to accurately determine change-over costs, cost prices and ABC classifications

‘This was by far the best project I have seen in a long time.’ Managing Director

Construction

Innovating On All Fronts

BUSINESS CHALLENGE The client is a new entity in the lighting industry created from different businesses and acquisitions, each with a different DNA and approach to Product Development. It was operating in rapidly changing landscape because of the introduction of Solid State Lighting and intelligent Controls (Systems and Solutions), so it needed to rethink the way it innovated to introduce new products and solutions quickly into the market. A 4 week analysis revealed an average slip of the active product portfolio of 45% and predicted a significant shortfall in its strategic growth ambitions by 2013.

CELERANT SOLUTION The company decided to initiate a major Change Programme, beginning with their activities in Europe and then rolling out globally and asked Celerant Consulting to support the first 12 weeks of the Design & Training phase. The aim was to improve 4 key aspects of performance: reduce average Time To Market by 50%; reduce non-value added time on development projects by 50%; install a new MCRS® Management System with aligned KPIs; align the roles and responsibilities within R&D and Marketing. To make this breakthrough, Celerant established 3 work streams: Financial & Operational to align the project portfolio to long-term financial targets, with real-time transparency of existing and future projects; Business Creation to create a more manageable process that would reduce Time to Market and maximise bang for buck; Project Execution to reduce process inefficiency to acceptable levels and optimise resource allocation conform strategy. The Celerant team also extensively trained key client people to ensure a seamless handover after the Design & Training phase.

RESULTS Three product development types were identified which have realised significant reductions in Time To Market (TTM). •Type A, new products - TTM reduced from 16-12 months. •Type B, products derived from existing platforms - TTM reduced from 14-6 months. •Type C, improved or cost down existing products - TTM reduced from 9-3 months.

Manufacturing


Driving Change


From salt to iron ore, from opencast to underground, Celerant’s experience spans 25 years.


Celerant Consulting has been a partner to global Metals & Mining companies for 25 years, so it was with great pleasure that we recently sponsored the Prospectors & Developers Association of Canada (PDAC) 2012 International Convention in Toronto.

he annual four-day PDAC Convention has grown in size, stature and influence since it began in 1932 and is now the event of choice for the world’s mineral industry. With over 1,000 exhibitors and 30,369 attendees from 125 countries, it allows business leaders the opportunity to get a global perspective on the challenges facing the mining industry. As repeated Gold Plus sponsors of the event, Celerant Consulting hopes to both contribute to the ongoing development of the industry and learn from practitioners and industry leaders.

T“There’s no better place to network with world class industry practitioners in mining and more importantly to teach what we know and learn what we don’t.” said Boyce Jacob, a Metals and Mining Executive at Celerant Consulting.

“Celerant plans to continue to support PDAC and similar industry events for years to come. Contributing to thought leadership in the industry and being active members of the community is crucial to guiding and delivering operational strategy and implementation for our clients.”


Compelling asset management to drive shareholder value in the midst of a North American Chemical Renaissance.

Starting now.

Driving Insights


The North American chemical sector is

in the midst of an exciting renaissance,

says Joseph Coote, Chemical Practice Leader at Celerant

Consulting, Americas, but Operational

Excellence is essential to build long term shareholder value.

Company strategy is critical to defining business strategy, geographic positioning and investment portfolio, but how well companies execute and manage their investments will significantly influence their financial performance and shareholder value creation. The long haul winners will be companies that have generated above normalized levels of capital returns through disciplined process management.

Building Shareholder ValueA variety of drivers contribute to building shareholder value for chemical companies. One of the most distinguishing metrics is Return on Capital Employed (ROCE). Shareholder value is tightly linked to asset efficiency and ROCE.

uelled by a wave of capital investment, North American commodity, diversified and specialty chemical companies are investing to take advantage of the region’s energy and feedstock positioning and favorable investment climate.

Attractive low-cost natural gas is expected to create a broader industrial resurgence and enhanced demand in the long term, with the result that global chemical companies are also revising their geographic portfolio weightings and looking to invest more in the Americas with more than $100bn (€76bn) of new capital expected to be targeted in the Americas over the next decade.

F


This scatter chart shows a relatively strong relationship between the average five-year trailing ROCE and total enterprise value over capital employed for a portfolio of commodity, diversified and specialty chemical companies. There are some interesting observations to make regarding the strength of the relationship and how it varies by type of participant. In general, commodity companies must generate a higher ROCE to achieve the same valuation (proxy for valuation being TEV/CE). Whereas, within the specialty and diversified sectors there is more even distribution reflecting many factors including portfolio quality, scale, cyclicality and overall liquidity. Generally, companies below the curve benefit from positive portfolio dynamics and liquidity effects, achieving higher valuations per unit of capital employed. Those above the curve generally suffer from a discount due to the cyclical nature of their portfolios, scale or momentum issues and therefore require higher ROCE per-formance to achieve similar shareholder value.

While ROCE is influenced by the quality of industry structure and competitive positioning, creating a culture of Operational Excellence allows a company to address these dimensions of shareholder value proactively.

Companies tend to be more focused on operational improvement and cost management in the downward portion of the cycle. But the winners have focused on creating a culture of Operational Excellence with clear management frameworks and continuous goal-setting to achieve continuing performance gains. The focus of programmatic efforts may change throughout the investment cycle, but the level of effort is continuous. In the capital investment wave, it will be important to

emphasize good investment decisions, as well as effective implementation. Optimizing the industrial footprint, capital portfolio management and capital project management are all important at this phase of the industry investment cycle.There is significant opportunity for improvement. In a recent survey of 2,800 CEOs and business unit managers in the US, only 19% were satisfied that their LEAN programs (those focusing on efficient use of resources for profit generation) had delivered what was intended. We believe that the difference is adopting a culture of Operational Excellence.

Increasing throughput from existing assetsWe see significant transformation opportunities that will drive shareholder value, particularly among the mid-sized companies in the sector. Leading companies that are focused on enhancing returns on invested capital are focused on continuous and programmatic improvement addressing the key levers impacting both the numerator and the denominator.

There are three thematic improvement areas for holistic programmatic management: cost management; revenue enhancement; and capital and asset management. While the balance of focus reflects the current state of the company, its specific opportunity areas and competitive positioning, it also reflects positioning in the business and investment cycle.

As the economy improves, we expect cyclical recovery in housing and modest additional recovery in the automotive sector to produce a significant rebound in chemical demand. With the chemical sector operating near 80% overall utilization and many companies behind the capital investment curve, the focus will remain on increasing through-put from existing assets and also bringing on new capital investments in a timely manner.

The use of Overall Equipment Effectiveness and Capital Project Management are in vogue as companies prepare for recovery. Companies employing leading capital project management techniques routinely achieve 1.5-2% higher ROCE performance.

Examining investment options consistently requires a capital portfolio management process with a sophisticated risk management approach. Companies employing integrated portfolio man-agement approaches consistently make better

investment decisions. The area is a growing best practice that is embedded in management frameworks across most of the larger, more sophisticated chemical companies, and mid-cap companies are employing this approach as well.

Minimizing price inflation Maximizing innovationAs the economy recovers, there is a dispropor-tionate risk of commodity price inflation. To deal with potential input price volatility similar to the 2008 time period, many companies are shifting to purchasing and supplier management programs focusing on novel contracting mechanisms and supplier management approaches.

Sales analytics, pricing optimization and sales effectiveness are critical to the creation of mechanisms and communication to passing input pricing through to customers in a timely manner to reduce the profit cyclicality across the value chain.

Longer-term innovation is also critical to support enhanced margins and growth. For businesses, innovation is not an end in itself. Their prime task is to identify the right innovation, and it sometimes requires tough decisions to be made between development projects. Having the right process to manage innovation in a portfolio and ensuring that the company is taking enough and the right balance of risks with its new product development investment is key. This requires the right level of process structure and discipline with the right risk/benefit ratio and systematic control of timelines and costs.

Adopting a holistic approachIn summary, we believe that the winning companies in our industry have increasingly created a culture of Operational and Process Excellence that embodies commercial excellence, capital and asset management, and cost management.

This holistic approach leads to strong shareholder value performance with best practice companies consistently outperforming their peers. Shifting the focus and activity level of a holistic management approach is prudent throughout the business and investment cycle, and an important management skill to optimize return on capital, growth and shareholder value.

A version of this article first appeared on ICIS.com – the breaking online news service for the global chemical industry.

ROCE %

30

25

20

15

10

5

0

0.0 1.0 2.0 3.0 4.0 5.0

TEV/CE

R2 = 0.72

Speciality ChemicalCommodity Chemical Diversified Chemical

Chemical Sector Peer Group Analysis: Relationship Between Return on Capital Employed and Valuation


Driving Ideas


Consulting, Quo Vadis?

growth-oriented operations projects.

• Strategic supply chain management is hot,

particularly in faster-growing emerging markets

like Brazil where the gap between clients’

strategic plans and their existing production/

supply chains is widest.

• Sustainability, in all its guises, from broad

corporate responsibility projects to highly targeted

sustainable supply chain work, is driving more

and more consulting revenue.

JJ: Clients in all markets are pushing for more

complex and integrated solutions that render

the hand-off between strategy and operations

almost imperceptible. ‘S&O’ - Strategy &

Operations Consulting - is becoming the new

buzzword. As this amalgamation happens it

will be easier for the strategy people to say

“I can do implementation” than for the “get

your hands dirty” Operations people to argue

that all of a sudden they can do strategy.

From a client’s POV, the Consulting market appears more crowded than ever.Greg: That’s true. As we’ve already noted,

firms are trying more aggressively than ever

to eat each other’s lunch by broadening their

current services lines and extending into new

service lines. This results in greater overlap in

the service mix of existing firms and a greater

number of providers in each service line. The

Operations Management space is the best

What big trends are shaping the Consulting market?Greg: The global Consulting market is still slowly

recovering from the downturn, but it’s far from

business as usual – and it may never be that

way again. Several major trends are combining

to create a more challenging environment for

Consulting firms of all types. Competition is much,

much tougher, with firms trying to eat each other’s

lunch; pressure on fees continues, except at the

very top of the very top tier; clients are doing far

more in-house; Return on Consulting is more

minutely dissected; Procurement Departments

are ascendant, and non-traditional competitors

are muscling into Consulting, often riding strong

client relationships and hot topics such as

Sustainability. In our view these trends are

not flavors of the month, or even flavors of the

year. They represent a fundamental evolution

in the Consulting marketplace and every firm

will have to adapt to this new normal.

What types of projects are companies engaging Consulting firms with?Greg: This tends to vary by region and by

consulting service line. In the Operations

Management space, our current research

shows that:

• Many clients are moving away from their focus

on cost-cutting and towards more strategic,

he global Consulting industry is in the midst of unprecedented change, say Greg Baranszky and JJ Sendelbach of Doublejay Consulting LLC, and it’s creating three categories of Consultancy. Leaders, Followers and Sleepers.

T


example of this phenomenon. Strategy firms

are pushing ‘downward’ into OM; IT firms are

pushing ‘upward’ into OM, and non-traditional

suppliers, such as large engineering based

firms, are pushing ‘inward’ into OM.

How do you stand out in such a crowded space?Greg: Truly differentiating is becoming more

difficult every day and is a key concern for many

of the firms we engage with on a regular basis.

Clients are using words like ‘clones’ or ‘the

swarm’ to describe their consulting providers –

not words that any Consulting firm would like

to hear applied to itself.

In a market where so many firms are so good,

or at least competent, at so many different

functions, we see the real point of differentiation

as the way that Consulting firms deliver their

services - not necessarily the quality level of

the services themselves, because the quality

is so similar.

Our analysis shows that ‘Customer Experience’

is composed of very specific elements that firms

must get right to stand out from their competitors.

These include knowledge transfer, joint client-

consulting teams, success-based fee structures,

thought leadership that is more than marketing

collateral for the firm, and true partner-level

involvement in all phases of project delivery. All

of these raise not only traditional measures of

client satisfaction but also what Doublejay calls

client involvement with a Consulting brand. Firms

which score highly on client experience-based

involvement measures are the ones which become

the go-to option in a client’s mind and truly

stand out from their competitors. Some firms

understand this intuitively, but we have seen

very few that have systematized this approach.

The ones which have are reaping the benefits.

JJ: I was discussing this subject with a very

sophisticated user of Management Consulting

services at a Fortune 10 company and he said

‘The best thing I can say is that when I send an

email to my Consulting partner on a Sunday

afternoon asking a question, I get an email back

answering that question by Sunday evening.

And he’s not charging me for that. So I will

always go back to that firm because that’s

what I’m looking for. Any firm can do the actual

project. I’m looking for something else.’

What’s next in Consulting? What should companies and firms alike be thinking about?JJ: Based on over 50 projects and market

research we have developed what we call

‘Consulting Quo Vadis?’. In this scenario analysis,

Consulting as we know it today, will disappear

and will be replaced by two business models.

The first one is best described in today’s termi-

nology as ‘high end staff augmentation’. It will

entail everything that a company needs to set

up, socialize, organize and run large scale and

complex projects. Consultants in this category

come through the door with three major ingredients:

1. Tools, how to organize and run large projects,

2. Experience, based on cases worked on before,

3. And an unbiased outside-in viewpoint.

The second category we have started to

name ‘evidence based consulting. These are

Consultancies who are absolute subject - and

vertical - experts. No matter whether the proj-

ect is, a strategy, efficiency, finance, IT or HR

project, the Consultancy again brings three

significant ingredients along:

1. Hard fact evidence based on ‘big data’

(historic and predictive business intelligence)

2. True partnership with the client (long-standing

relationship with all levels and LOBs of the firm)

3. A business model that lends itself to share in the

risk and the rewards of the project with the client.

Is there a game-changing business model coming

our way that will make Consulting as we know it

today a thing of the past? We believe absolutely

yes! And it is not going to be one or the other

Consulting model of the future, it’s going to be

both! There is need and a place for both. The

good news for consumers of Consulting though

will be that there will be significantly more choices

than today. Where today’s decisions who to

Consulting 2020

‘ The real point of differentiation is the way that Consulting firms deliver their services.’

work with and how are often made within the

old boys club and with an eye towards board

room assurance, tomorrow’s decisions will be

based on who has the most evidence in our

vertical and horizontal and who do we trust is

our best partner in this regard today and for

the foreseeable future?

Do you think Consulting firms recognize the speed of change?JJ: There are three categories of Consultancy

out there: Leaders, Followers and Sleepers.

That’s my answer.

Greg: There are fewer Leaders than Followers

and fewer Followers than Sleepers. Our view is

that these are fundamental changes that will

alter the way Consulting is done. If they don’t

adapt, many firms won’t be in existence in

5 or 10 years.

JJ Sendelbach is Managing Director at Doublejay Consulting LLC and Greg Baranszky is a Director. Doublejay Consulting, founded in 2003, is a strategic advisor to the professional services industry.

66 CLOSEWORK® GLOBAL REVIEW 201262 CLOSEWORK® GLOBAL REVIEW 2012

THE GRANITE CITY: It’s been a home from home for almost 20 years.

elerant Consulting has established itself as a major partner for Oil & Gas

companies in the North Sea, helping them improve performance and

implement change. UK Vice Presidents, David Delvin (Sales), David Vaughan

(Analysis), Mark Turek (Operations) and Dereck Clow, Head of Country,

give their views on what now lies ahead.

C

Driving Insights


CLOSEWORK® GLOBAL REVIEW 2012 67CLOSEWORK® GLOBAL REVIEW 2012 63

Is this a key sector for the UK economy?DC: Without a doubt. Just to put things in some kind

of context, this year saw the largest investment

in the North Sea Oil & Gas industry for 10 years.

It was over $10 billion. The industry employs

380,000 people in the UK and accounts for

nearly 20% of all Corporation Tax received by the

Exchequer. So we’re talking about a massive

industry with massive resources.

DD: It’s also a key sector for Celerant UK.

We’ve already worked with nine of the Top 10

Oil & Gas companies in the world and our best

sector experts and consultants are working in

this area. The first North Sea project we did

was 18 years ago and Mark and I were both

on it, but we’ve now eclipsed our 1996 peak.

In terms of both revenue and people involved,

we’re way beyond it.

Why has Celerant got so much traction in Aberdeen and what type of projects are you currently delivering?DD: We have an exceptional track record in this

sector, but it’s the way that we help companies

make improvements in their business performance

that is the big difference. Our style of Consulting,

in terms of supporting implementation challenges,

is really what they’re looking for now because the

nature and structure of the industry has changed

quite dramatically over the past 5 years or so.

The major players have divested their assets and

they’ve been acquired by smaller, independent

companies that don’t have the massive infra-

structure in place that say, Shell or BP do. So

they’re looking for partners that can effectively

offset some of those gaps and help with the

improvements they’re trying to make. We fit that

bill very well. The other thing is that we’ve built a

degree of momentum and success breeds success,

so we’ve been able to secure a number of pro-

grammes simply because there’s a confidence

shown by others that we’re a good partner to

work with. Success builds an interest in what

we can do for others.

MT: There are a number of projects running

in Aberdeen, all at different stages of maturity:

TAQA started up recently and is still ramping-up,

NEXEN is an established project in late-stage of

maturity and then we have a couple of smaller

follow-on projects at Talisman which both sprang

out of the main ‘Operational Excellence’ project

which we completed last year. From a service-line

perspective, we’re seeing a strong focus on

Operations Management. This isn’t surprising

given the asset intensive environment, much

of which is being operated beyond its original

design life, so Engineering and Maintenance

feature strongly in our approach. The operating

life-cycle also means that our clients are asking

themselves constantly whether they are con-

figured to respond to new challenges resulting

from changes in their operating environment.

This means that Organisational Effectiveness

has a big role to play in helping our clients

achieve their goals. The industry is constantly

on the move in terms of both ownership and

operating environment, which means that we

will continue to utilise and adapt our broad

range of offerings in service of meeting our

client’s needs.

What key challenges are these companies facing?DV: There’s been almost an inbuilt inefficiency

in the North Sea because it’s a very difficult

place to work and in many ways the working

practices have evolved over time, rather than

been designed. So the priority for all companies

is to increase efficiency to enable them to reinvest

their operating expenditure into the areas they

need to focus on going forward. You may have

different levels of efficiency on different ages of

platforms, but everyone is looking to increase their

overall efficiency and that’s our area of expertise.

DD: A lot of emerging companies that acquired

older assets from larger companies now have to

deal with the legacy issues that have been in place.

They’re trying to stamp their own methodology,

their own way of doing things on their newly

acquired assets. The obvious difficulty they’ve

got is that in some cases, these operations

have been running for 25 years or more.

They’ve been operating with a single owner

for that time and suddenly this new company

is trying to change the game. So there’s a

huge degree of change associated with trying

to get that right.

MT: I agree with David’s comment about

emerging companies wanting to stamp their

own mark, but I think that in some cases the

companies themselves aren’t exactly sure what

that mark is. So in some ways they’re working

from scratch to define their culture. In doing so

they are often looking to us, to our experience

and insights, to see what the best attributes

and building blocks we can offer them in terms

of establishing their way of working.

DD: Another problem is that they usually want

to make these changes very quickly. It’s just the

nature of what they want to do - and obviously

if you start with a blank sheet of paper, it takes

a hell of a lot longer than it does when you

can bring a number of options and ideas and

examples of how it’s done elsewhere.

DV: I think one of the biggest challenges is

probably being driven by the high price of oil

itself. It’s a resource rich sector and therefore

what tends to happen is that there’s a massive

level of activity, whether it’s projects, initiatives

or improvements. And sometimes the sheer

volume of projects that organisations undertake

can almost start to grind them down because

you can’t see the wood for the trees in terms of

coordinating all these activities. Consequently

there’s a lack of focus, a lack of clear governance

around selection and prioritisation and a lack

of clarity around resource delivery. There’s a

lack of vision and leadership in really steering a

lot of these activities - and part of that is driven

by the sheer volume of activity in the industry.

Another challenge is that a lot of assets are

now running beyond their original design life.

So there’s the question of how can we extend

the life much further? The original intention

was for maybe 20 - 30 years and now with

some of these assets the plan has been revised

‘ We’ve worked with nine of the Top 10 Oil & Gas companies in the world.’

48 CLOSEWORK® GLOBAL REVIEW 201264 CLOSEWORK® GLOBAL REVIEW 2012

to extend it out to 40 - 50 years. They’re also

bringing in additional sub surface assets, so

there’s a whole challenge there about how you

selectively invest in your assets to set them up

for the next 10 -20 years of operation.

What about the people who work in this industry?DV: Companies are now actively competing for

experienced individuals, so you’ve got workforce

stability issues and potential gaps that are

difficult to fill.

DD: A massive demographic time bomb is about

to hit the industry. If you look at the current

workforce structure, the number of 50 year old,

experienced engineers who will retire fairly soon

is not being replaced by graduates coming in.

So there’s a major worry about this knowledge

leaking out of the organisation. This lack of

replacements came about because Oil & Gas

wasn’t seen as a sexy industry for a while. It’s

a tough industry, there’s a lot of travel. Some

people like that and some don’t. The number of

petrochemical engineers graduating these days

is nothing like it was in the 80s. So companies

are pinching people from each other. In the

past for example, a Shell employee would stay

with the company for 30 years, but now people

switch company quite regularly.

MT: Also a lot of the guys who were in charge

of Operations in the past have either retired or

moved up the ladder to other senior jobs in the

company and are no longer around to advise

their successors.

What are the ‘ownership’ challenges for an industry with such a high dependency on 3rd parties?MT: The context of the high dependency on

third parties is really how I read this question.

I think it talks a lot to what was said earlier,

in terms of the mobility and migration of key

resources from company to company. Whereas

historically someone would join an operator

from University and rise through the ranks and

be very much the company man, that aspect

has changed significantly. It’s rarer now to come

across the company man, simply because people

move around as they see better opportunities

for career development. That’s become very

much the culture in Aberdeen. In terms of people

having the same level of ownership, I don’t think

it’s quite how we would have envisaged it 10-15

years ago. The whole ownership landscape has

changed quite significantly.

DV: With a lot of third party contractors, it’s

ultimately a fairly transactional relationship

and that builds on this idea of not necessarily

being a company or career man. You’re there to

do a job for a defined period. Also with the shift

to shift rota, you’re living with the problem for

two weeks, but you aren’t necessarily living

with it week in and week out. It’s someone

else’s problem when it comes to picking up

the activity for the next two weeks. So I think

there’s a whole range of ownership problems:

the staff turnover that Mark talked about, the

shift set up and the fact that 3rd parties are

largely driven by the transactional nature of

the task and being remunerated, rather than a

long term interest and pride in the asset. This

is always going to be a potential issue in an

outsourced environment.

Based on your experience, what are the key requirements for delivering a successful Oil & Gas project - in particular the challenges of delivering sustainable change projects offshore?MT: I’m not convinced there are any unique

requirements for Oil & Gas that are different

from any other project in a different industry.

The ingredients of a successful project are

pretty generic. What’s totally different about Oil

& Gas, particularly where there’s an offshore

component, is that we’re dealing with a work-

force that is only there for two weeks out of

every five. So in terms of success, it’s about

how you structure the project to take that

into consideration, because clearly not only

Driving Insights



do you not have the same degree of face time

as you would on a conventional land based

project, but obviously people disappear for

several weeks. Going into every project with

that understanding and having Consultants

who understand that environment and are

tuned into that challenge is clearly one of our

strengths.

DV: Part of it is structural. It’s related to the

existing shift patterns of two on and three off.

People are rotating off the platform and spending

significant amounts of time away from the

working environment and this presents a

real challenge in terms of driving new ways

of working and getting them hardwired into

the organisation. Another observation for me

is that quite a number of Operators seem to

have allowed the evolution of quite a lot of

variation in performance from shift to shift. It

feels as though there’s almost an acceptance

that shift to shift it’s the people out there that

set the tone in terms of how certain things are

done - as opposed to getting to a clear view of

standardised best practice that is consistently

applied consistently.

MT: The challenge that I see is that traditionally,

there has always been an onshore organisation

that developed and set high standards and then

there’s the offshore organisation where these

things are implemented and from my experience

there’s a bit of a disconnect between the two.

By that I mean that the flow of leadership from

onshore to offshore is perhaps not as effective

as it could be. So whilst expectations are set

high onshore, I would question whether that’s

communicated and reinforced as much as it

could be and whether roles and responsibilities

are clarified as much as they should be. I think

the industry recognises that this is a continuing

challenge. And that’s an area where we clearly

put a lot of our focus.

How do you ensure you leave a sustainable legacy?MT: As we come to the latter stages of our

engagement, sustainability is a conversation

that we start and continually reinforce with our

clients. You can’t underestimate the importance

of leadership in this whole sustainability debate.

Once we leave it really is down to Leadership to

ensure that the processes, practices and systems

that we’ve put in place are sustainable. So part

of our job is to make Leaders understand what

their role is in this. It’s a conversation that starts

almost immediately, but becomes more and

more relevant as we got towards the latter stages.

They have to be clear where they fit into those

things and what they have to continue doing to

ensure these things live on.

DV: The other point to remember is that these

things aren’t a quick fix. There‘s an investment

of resource in terms of activity and duration

to ensure that the new ways of working are

embedded into the organisation. There’s a

Change vehicle that has to be put in place with

both client resource and external support and

expertise. You’ve got to have the right critical

mass to properly drive and install the new

practices. That all comes back to the quality of

people we put on these projects. It’s also about

your tenacity and rigour throughout the project

and not getting distracted. One of the lessons

that we point to in programmes that fail with

clients is that when things get tough, they then

take away the structures and lose their focus and

things dissipate. You’ve got to hold the structure

throughout the transformational change.

How do you cross the Rubicon?DC: Energy is a key sector for Celerant. It’s

changing and moving and so are we. We have

already opened offices in Brazil, Africa and the

Middle East where we’re involved in many

major projects, including Liquefied Gas. The

companies we deal with have a global footprint,

so we’ve got to take our massive learnings and

start utilising them right across the globe.

‘ Closework® is the fundamental difference in our approach. We work alongside people at the point where the solution has to happen.’

Driving Insights


eliminated. Too often, new portfolio ownership takes hold of an organization gradually, and as a result employees hold fast to their heritage, routines and behaviors. Hitting the accelerator on Day1avoids this pitfall.

When it comes to mergers, establishing an immediate united front is crucial, otherwise resistance to change can spell disaster. The industry is rife with examples. Take, for example, the purchasing of AOL by Time Warner. This $360bn merger was positioned to change the landscape of communications, yet after 10 brief years it collapsed as direct result of the companies failing to truly integrate their cultures and services.

3 Change must be designed to last Flawless execution is a daunting term, but it is a necessity as a new organization undertakes a transformation initiative. Execution must be preciseand progress confirmed repeatedly with open communication, management controls and monitoring that keeps tabs on the many balls in play. This pursuit of flawless execution is not geared toward ‘not getting it wrong.’ It’s an approach that allows teams to make quick corrections when things go awry. Organizations are built around the most unreliable of resources – people – and plans will inevitably be scrambled as they unfold. Missteps need to be anticipated and teams should be empowered to assess the situation and take action.

Even when the organization is moving in the right direction with the right processes in place, the work is not done. Implementation teams have an obligation to make their work endure; they must not leave employees with new roles and responsibilities and no idea how to sustain momentum. Managers should be taught how to use the reporting and monitoring tools, how to analyze progress and be accountable for their and their teams’ actions. With a personal stake and the enthusiasm that comes with truly owning their new roles, these key ambassadors will adopt the tools as part of the new culture and operations of an improved enterprise. Robust management systems and motivated people are the foundations of a performance culture, with Continuous Improvement built into the DNA of the new learning organization.


When we partner with Private Equity firms and their portfolio companies our role is simple, says Celerant Consulting’s Andy Rodgers. We help management teams boldly change the way their business runs.

must be clear, and the action plan fully developed before control is sealed by the Private Equity team. If aggressive preparations are not made, value can be lost from Day 1. Buyers must approach this planning process by going beyond the typical CIM review and financial due diligence to get an inside look at future operations. They should visit company sites and base conclusions on carefully gathered external data. This will prepare them for the tough decisions ahead, while laying the foundations for detailed operational assessments and action plans in the first 100 days of ownership. With this process complete, teams can confidently send out a Day One communication that enrolls staff in the vision and ignites positive momentum. Everyone must feel supported by the full weight of the organization as they undertake change, whether that’s a minor alteration to a department’s IT system or a major overhaul of a production facility. This thorough setting of the stage needs to be in play prior to the close, and acquirers, management teams, and external advisors must collaborate continu-ously to ensure they’re moving in lockstep.

2 Accelerate Value CreationThe first 100 Days are the window for new owners to exert authority and make changes that demonstrate confidence, enthusiasm, and alignment with the vision. The planning and pronouncement process offers important guidance, but without immediate, decisive action it will be almost impossible to enroll the organization. These 100 Days are the critical timeframe in which assumed synergies must be proven, while redundancies and operational inefficiencies are identified, evaluated and

uilding value in a portfolio company, preparing the platform for growth and developing attractive exit strategies comes down to three basic principles: planning, flawless execution and communication. These principals must be applied relentlessly from due diligence throughout the portfolio company ownership cycle. Acquiring firms that do not focus on Continuous Improvement are simply fighting themselves. Status quo performance is sub-optimal because pre-existing inefficiencies will become roadblocks for growth.

Optimizing total value from an acquisition or merger can only be achieved however, if the company’s new strategy is understood by all parties. Acquisitions undertaken without clear direction create a rudderless work environment that can derail the best plans and set the stage for a merger stunted by cultural clashes. As Robert F. Bruner, Dean of the Darden Graduate School of Business, University of Virginia notes in Chief Executive Magazine: ‘CEOs tend to think that integration merely consists of connecting the IT pipelines, getting the cash to flow in the right direction and consolidating the accounting systems, but that is just the start. Integration is about building a joint vision and strategy of the combined company, and creating a set of norms about how decisions will be reached.’We believe that optimized integration is built on four basic tenets for change.

1 Change begins before the closeValue creation starts with a detailed understanding of the organization’s structure, personnel, and areas of strength and improvement. The vision

B

4 Don’t just follow the leaders – create a strong teamComprehensive planning, keen communications, and expert implementation will have little impact without the right leadership team. The personalities of the CEO and their team in particular have to be carefully considered; it is crucial to have these roles filled by people who can paint visions, communicate and plan accordingly. In less cautious times, a premium was placed on high profile individuals to headline large acquisitions, regardless of their personal fit with the company.


The bottom line is thatchange improves the bottom line.

Today, organizational targets are refined and more strategic. Specialty funds seek out acquisitions that fit a specific profile for geography, size and the nature of business which has spawned a better awareness of industries, company-specific needs and the tools necessary to get the job done.

In his book ‘Good to Great’, Jim Collins defines the criteria for successful company leadership. ‘Level 5 Leaders are not the charismatic and erratic Lee Iacocca’s of this world, and not the driven, but risk taking managers such as Jeffrey Skilling at Enron. True leaders of change that deliver sustained value and consistent performance

develop commitment to a shared vision for success and talent throughout an organization.’

The greatest Level 5 Leaders of our time are largely low profile. Darwin E Smith at Kimberley Clark, Bill Allen at Boeing and William McKnight at 3M each managed the transformation of companies that have not only become leading global corporations, but also delivered sustained value over decades. Private Equity firms must focus on the appointment of executives who will manage change, lead teams and make the strategic plan come to life. The refined organizations they create will then stand as a foundation for further acquisitions, with a team that has been through significant change and knows how to create value. This battle-tested structure is the real victory.

‘ We help improve the business, drive cash and EBITDA to the bottom line and enable it to fund new opportunities and innovations.’

Driving Change



‘ After working at our desks all day we decided to stretch our legs.’

At Celerant Consulting we believe that strong relationships make all the difference, that’s why we consider every project a long term partnership.


‘A Marathon requires great physical and mental preparation if you want to be successful. The Celerant project gave me the chance to meet Nicholas and find a passion in common.We then decided to take this challenge.’

Jean-François, GRTgaz20th Marathon. Time 4:15

‘After 3 months of tough training,encouraging one another whenever we had to run at night or at -10°C, Jean-François and I finally shared the pleasure of crossing the finishing line with a big smile!’

Nicolas, Celerant Consulting France

1st Marathon. Time: 3:25

17,000 runners took part in The 2012 Rome Marathon

Driving Change



The Celerant

Change Club brings

together professionals in

Change Management to

share their experiences,

ideas and ambition.

PARIS:Nov 2008: C-Cube launches in France and completes its 13th workshop in March 2012

C-Cube is the perfect forum for Change Managers from multinational corporations and medium sized companies to share their problems and opportunities with each other and Senior Consultants from Celerant’s Operations teams.

C-Cube

Opens New Doors


Masters Of Change

DOHA: Dec 2011: C-Cube MEA holds its first network meeting.

Club Members meet at quarterly roundtables where topics include Change & M&A, Change & Management and Change & Multi Site-Multi Culture. They also work together at interactive workshops to pool experiences and best practice.

DUSSELDORF: Jan 2012: C-Cube Germany holds its first interactive workshop.

C-Cube promotes a culture of ‘step back’ in an arena where constant adaptation is vital. It offers a unique opportunity for Change Managers to develop personal awareness and cement their credibility as internal leaders of change.

celerantconsulting.com

Belgium • Brazil • Canada • Denmark • Finland • France • Germany

Netherlands • Norway • Oman • Sweden • United Arab Emirates

United Kingdom • United States of America

Celerant Consulting Holdings Limited. Registered Office: Avalon House, 72 Lower Mortlake Road, Richmond, Surrey TW9 2JY, United Kingdom.

Documents

Closework Global Review - Issue 4