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Paul Nestor – Head of Operational Excellence, Damco B.V.
OPEX Global Summit – Amsterdam April 20th 2017
Operating Systems and Standard Work for Leaders in Matrix Business Organizations
Damco is part of the Maersk Group
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HQ in Denmark ● revenue USD 40 billion ● 88,000 employees ● presence in 135 countries
MAERSK GROUP
• Maersk Line
• Damco - Logistics
• APM Terminals – Port terminal operations
• Svitzer – Towage and Salvage
• Maersk Container Industry
• Maersk Tankers
• Maersk Drilling
• Maersk Oil
• Maersk Supply Service
TRANSPORT & LOGISTICS ENERGY
Damco key facts
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Customers Customers 10,000+
Key industries served Retail (incl. fresh), lifestyle, mining, chemicals, industrial,
technology, government and defense, aid and relief, FMCG
Type of customers Range from large multinational companies to small
independent importers/exporters
Customer loyalty Top 25 customers have been with us on average for 10+ years
Offices Locations 300+
Warehouse operations 1.5 million m2
Global player Presence in about 100 countries
Employees Employees 11,000+
CEO Klaus Rud Sejling
Key Figures
(2015)
Ocean freight & supply chain
management in TEU million 2.9
Airfreight in tonnes 180,000+
Net revenue in USD billion 2.74
We serve a wide range of customers
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Chemicals Technology Industrial
Mining
Retail Lifestyle
Aid & Relief Government & Defence
Our solutions; customized to client needs
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Freight Forwarding Customs Brokerage Warehousing &
Distribution
Supply Chain Visibility
& Control
Supply Chain
Management
Supply Chain Design
& Optimization
▪ Embed operational excellence
▪ Transform finance operating
model
OPEX has been an integral part of DAMCO strategy past 4 years
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▪ Consolidate 300 operations units
into 47
▪ Sales office from 600 to 300
▪ Lead transformational change
▪ Build collaborative
identity
▪ Embed selling
integrated solutions
▪ Expand
geographical
footprint
▪ One global freight
forwarding IT
system
OPEX deployments were structured along 5 lenses and impact is achieved across 3 levers
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Mindsets and
behavior Organization
and skills
Performance management Process efficiency and
effectiveness
Working together to
put the customer at the
heart of the business
Delivering at lowest cost and
lead time while securing
position and building efficient
processes to grow sales
Actively monitor performance at
individual and team level to identify
opportunities for improvements
Organization leveraging “span of
control”, clear roles and
responsibilities and capability
building
Voice of the
Customer
Lean Management approach addresses 5 areas starting with the customer
Three key levers each
impact productivity
increase by 1/3
• Process
Improvement
Efficient processes
• Capacity
management
Efficient planning
• Building skills,
capabilities and
motivation
Efficient people
Impact levers
LEAN management tools implemented were the driver for performance improvements
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Standard ways of completing work all team members have access to best practices and know what is expected
Standard work
Process confirmations of using standard work procedures Value streams
Value streams
Beliefs and behaviors
Management systems
Process confirmations (sit-ins)
Visual performance boards
Daily 15 minutes huddles are used to discuss performance vs. goals, raise problems to be addressed, and plan for the day
A skills matrix indicates each team member’s mastery of key skill areas and identifies training requirement
Weekly coaching sessions focus on how team members and managers are behaving and working
Skills matrix
Coaching
A simple problem solving process helps teams remember to define the problem and seek root causes
Root cause PS process
DILO/WILOs help to identify problems that pull leaders away from regular work with teams
DILO/WILO
Recognizing solutions empowers the frontline and is one way to focus on a steady pace of solutions rather than long lists of problems
Recognition for solutions
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A structured Operating System is a key element of the Damco Way of Working
High focus on performance
management
No alignment between regions
and functions – multiple
structures co-exist
Different formats of data and
performance management
meetings
No clarity on how direction setting
cascades down to shop floor
Reactive rather than proactive
nature
Cu
rre
nt
Sta
te
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Better balance between backward
and forward looking
One single structure for all levels
Standard meeting specifications
and single source of data – one
version of the truth
One way of working across
Damco
Transparency on direction setting
from top to bottom
Fu
ture
Sta
te
A structured Operating System is a key element of the Damco Way of Working
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DOS consists of a standardized package containing a structure, meeting details and tools
Standard processes
• Fixed structure and
cadence for all functions
• Structured direction
setting, cascaded
hierachical and
functional
• Execution is done via
monthly and weekly
meeting cycles within
and accross functions
• Feedback loop installed
for bottom up alignment
• Standard data tool and
templates to be used to
facilitate the dialogue
and log actions
• One version of the truth
Standard Meetings
• DOS structure leads into weekly, monthly and quarterly standard calanders on all
levels
• Standard meeting specifications, including purpose, required inputs, agenda and
action oriented output to cascade further
Standard Data & Tools
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FUTURE DIRECTION SETTING
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Moving focus from backward looking and explaining numbers to future direction setting
PERFORMANCE MANAGEMENT
Detailed analysis of all individual numbers
Thorough preparation to be able to clarify all the numbers – Manage by exception
Create oversight of underperforming elements – know where action is needed
Performance Management on scorecard elements
Joint phrasing of key actions based on underperforming elements, pipeline status and scorecard deviations
Defining long-term strategic goals
Translate CEN priorities into local short term actions and circulate feedback
Week over week follow up on previously set actions and priorities
Identify risks to next month RoFo delivery and define clear, time bound and actionable countermeasures
BACKWARD LOOKING (25%) FORWARD LOOKING (75%)
Meeting effectiveness – Don’t discuss numbers, explaining the obvious, discuss the So-What
Focusing on the future and being forward looking
Communication and follow-up – What gets followed up gets
done
Holding high quality performance dialogues
Agreeing SMART actions
Using Visual Management
Agenda structured around specific priorities
Good communication and facilitation skills
People matter – activate the entire team
Commitment to action
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Leader behaviors determine more than 70% of the success of DOS– what defines good behavior?
Employees help improve DOS
• Our governance set-up allows frontline
personnel to introduce change requests and
best practice to improve DOS:
- In Regions, contact your Regional Focal
- In Area’s, contact your Area Focal
• Minor to medium changes or those largely
concerning one function are decided by the
frontline business owner
• Changes that are cross-functional are
decided by Global Governance via CEN FIN
Central mechanisms to improve DOS
We are working hard to keep improving
DOS:
- We continuously integrate frontline
feedback and best practice via regular
change request cycles
- Leadership input is collected via
surveys
- Key customer feedback sought via
yearly (Q3) interview
- Regular “Gemba’s” are conducted to
monitor implementation
Ensuring DOS remains relevant is our shared responsibility!
We strive to continuously improve DOS – leaders help us ensure DOS continues to fit the way we work
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A DOS support Community to embed and sustain the change is critical Anchoring of DOS in the organization through global governance, a project team and ultimately the functional managers and meeting owners…
…Supported through Functional, Regional and Area Focals, enabling deployment and improvement of DOS.
Functional Managers and Meeting owners
Global Governance
(HQ Finance)
Project Management
(HQ CI) Functional Focal
(HQ)
Regional Focal
(REGION CI)
Area Focal
(AREA CI)
Project Sponsor
(CEO)
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Community will drive DOS through standard meeting flows & cascade
Meeting Flows dictate frequency and timings
based on data availability and
participants, having a functional and
geographical cascading
Ability to adapt to market changes rapidly Act on timely and reliable standard data
One team achieving Damco’s performance
targets A common structure that facilitates geographical mobility
as our business units work in the same way
Transparency in decision processes, performance
management and related data Clear direction setting, one version of the truth facilitates
actionable outcomes
One way of working across Damco Improved interaction across functions and foundation for a forward
looking and proactive approach to problem solving
DOS provides benefits to the bottom line and our daily work
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