Value Creation through Growth and Excellence
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Value Creation through Growth and Excellence – Implications for the Human Talent. Mosaed Al Ohali, EVP – Manufacturing SABIC March 2010. Agenda. An Outlook of Chemical / Petchem business Value Creation through Operational Excellent Reflection on Talent.

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Value Creation through Growth and Excellence – Implications for the Human Talent

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Value creation through growth and excellence implications for the human talent

Value Creation through Growth and Excellence

– Implications for the Human Talent

Mosaed Al Ohali, EVP – Manufacturing SABIC

March 2010


Value creation through growth and excellence implications for the human talent

Agenda

An Outlook of Chemical / Petchem business

Value Creation through Operational Excellent

Reflection on Talent


Value creation through growth and excellence implications for the human talent

Global Petrochemicals Demand Slowing ..

Note : Petrochemicals comprise Methanol, PE & PP

Source: CAMI; Global Insight


Value creation through growth and excellence implications for the human talent

Petrochemical Capacity Investment 2003 - 2013

Source: Deutsche Bank, DTT Chemical Group, CMAI 1/2010


Margins erosion more difficult to make profit

Margins erosion – more difficult to make profit ...

Source: Deutsche Bank, DTT Chemical Group, CMAI 1/2010


Value creation through growth and excellence implications for the human talent

R&D investment in chemicals has continued to decline

R&D as percentage of revenues 1998 - 2008


Value creation through growth and excellence implications for the human talent

Industry Landscape ...

  • Slowing growth rates with excess capacity

  • Falling gross margins

  • Reduction in R&D budgets

  • High and volatile feedstock prices

  • Weak end-user markets with production moving east

  • Volatile return on investment


Future leaders are those that keep healthy margins

Future Leaders are those that keep healthy margins …

  • Prices

    • Effective customer care system

    • Access to advantaged technologies

  • Low Cost

    • Access to advanced feedstock

    • Efficient global supply chain

    • Operational Excellence - integrated manufacturing and Supply Chain management.


Value creation through operational excellence

Value Creation through Operational Excellence ..

  • Chemical companies are increasing their focus on the development and use of Operational Centres of Excellence to provide:

    • License to Operate – HSE Performance

    • Exploitation of operational expertise

    • Standardisation of operational processes / development of best practises

    • Performance management and standardisation of KPIs


Value creation through operational excellence1

Value Creation through Operational Excellence ..

O

Has

Operations

Excellence

Safe, Responsible

Reliable, Efficient

P

W

Rohm and Haas has

Global Asset Management

Excellence

E

R


Value creation through growth and excellence implications for the human talent

Manufacturing Excellence can capture significant value ...

Scope

Examples

  • One industry major claims to achieve €500 Mn of integration benefit at one site

  • From single sites individually to portfolio of sites

  • Value of side streams, energy efficiencies, capabilities, ..

Site Integration

  • A multi-plant petrochemical region with $10 Bln in revenues, improved performance by 18-28% of Manufacturing Conversion Costs

  • Optimization of product slate across production sites (e.g. grades, products, production campaigns)

Asset Optimization

  • Typical results: 10-25% improvement in controllable costs and increase in OAE of 10-20%

  • Implementation of best practices and standards across all assets

  • Top-quartile performance

Functional Excellence


Value creation through growth and excellence implications for the human talent

Work Environment is Changing ….

  • Standardization of work processes and structures.

  • Personal accountability through team work.

  • Emphasis on soft (beside hard) skills.

  • Advanced learning processes

  • Flatter organization, less managerial positions. Reporting span

    • 1990’S 5-10 per supervisor

    • 2000’S 10- 15 per supervisor / matrix organization

  • Managerial vs. professional – a trend toward equal rewards.

  • New engineers aspire to manage

    • Projects in their 20’s

    • People in their 30’s

    • Companies in their 40’s


  • Value creation through growth and excellence implications for the human talent

    Talent Development …

    Development of human resources is a strategic objective.

    Human resource development is all encompassing system

    Create business value through competency models.

    Employees empowered and accountable to drive their own development.


    Value creation through growth and excellence implications for the human talent

    Career Development has joint responsibilities

    Individual Responsibilities

    Company Responsibilities

    IDP

    Appraisal

    Development opportunities

    Career counseling

    Secondments

    Coaching

    Mentoring


    Value creation through growth and excellence implications for the human talent

    Mathematics Score .. Country Comparison ..

    Advance (625) : Students can organize and draw conclusions from information, make generalizations, and solve nonroutine problems..

    High (550) : Students can apply their understanding and knowledge in a variety of relatively complex situations.

    Intermediate (475) : Students can apply basic mathematical knowledge in straightforward situations.

    Low (400) : Students have some knowledge of whole numbers and decimals, operations, and basic graphs.

    332 in 2003

    Source : TIMSS 2007 / 2003 Reports


    Value creation through growth and excellence implications for the human talent

    Science Score .. Country Comparison ..

    Advance (625) : Students can organize and draw conclusions from information, make generalizations, and solve nonroutine problems..

    High (550) : Students can apply their understanding and knowledge in a variety of relatively complex situations.

    Intermediate (475) : Students can apply basic mathematical knowledge in straightforward situations.

    Low (400) : Students have some knowledge of whole numbers and decimals, operations, and basic graphs.

    398 in 2003

    Source : TIMSS 2007 / 2003 Reports


    Thank you

    Thank you…


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