Be Petrothai Group & Thailand 4 0

BE Petrothai Group and Thailand 4.0 To cope with the volatile and highly competitive global economy, the current government's economic team has focused on Thailand 4.0 strategy. However, implementing Thailand 4.0 is not an easy task. It requires all economic machines to upgrade themselves and run in the 4.0 mode as much as possible.

Among our INTANIA society exists a small organization, which can be said to successfully operate with such a 4.0 policy and direction. Before it arrived at this stage, there were a lot of challenges threatening its survival. It takes true grit and organization to a successful stage as it is now. Without further ado, let's learn about 'BE Petrothai' then. BE Petrothai is a group of engineering service companies specializing in oil & gas and petrochemical equipment. It is an innovative driven enterprise which prioritizes on setting the right work environment, using technology and software to drive the organization, and nurturing business ownership among employees. BE Petrothai has achieved each development stage capitalizing on its knowledge base, connecting work processes by using its distinctive strengths. These result in many solutions to customer's problems, such as cost reduction, pollution control, and inventory management leading to Zero Inventory.

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In use at BE Petrothai are many interesting management tools, such as School of Thought, Management Lab, Process Owner Concept, and Foster Community, which are instrumental to making it a successful organization.

Enough for the introduction, let's talk about the story of BE Petrothai from the view Khun Kitja Chamnongarsa, B.Eng. Chula class 1967 , a founder of the company.

INTANIA: What is the historical background of BE Petrothai?

Khun Kitja: We founded Petrothai in 1981, approximately the same period as the early development of natural gas resources in the Gulf of Thailand, as a trading company specializing in engineering equipment. We provided a life‐long maintenance service for equipment we sold, thus requiring continuous process and people development to serve our customer's needs.

We researched corporate changes and restructuring in relevant businesses, both domestic and abroad, in order to steer our company in the right direction. In 1995, I saw that the structure then could not facilitate change management we need for long‐term growth. I decided to start re‐engineering by synergy with BE Consulting Group, which was an expert in resource management and a consultant in accounting system. The synergy has resulted in a group of companies under BE Petrothai with further establishment of 3 subsidiary companies that feature our strengths in various processes.

The major organization re‐structuring started from designing business model according to process organization. By elimination of the department head and manager positions, BE Petrothai has become a flat organization in which everyone is a process owner who works and, together, takes care of this community.

At that time, software development, costly yet worthy investment, was a catalyst which accelerated the pace of change here. We have started software development since 1995 without government or bank supports. Worse still, we were later faced with the economic depression in 1997. We were at a point of no return then, we must carry on through thick and thin.

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I'd like you to take a look at the graph representing shareholders' equity of the company. Although the company had been in the red since 1997, meaning its accumulated capital was of negative value, we financially managed to fight on because we were confident that development in digital technology, together with human resource and process development, would lead us to success. I can tell you here that anyone aspiring for building an Innovative Driven Enterprise must have great risk appetite, perseverance, diligence, and trust in it.

Like I said, before we could enjoy successful results, we had endured loss for quite a while. Were we losing heart at that time, we would never have been here. We just came out of the red in 2005, after which we started to enjoy equity accumulation.

INTANIA: Could you please explain the management philosophy underlying the company group?

Khun Kitja: Continuous development of business models enables us to identify distinct processes and core value of each process, then we accordingly assign process owners to dedicate to particular processes. But to make all core values interact in an effective way, we have created a business unit for each core value coupling with equitable remuneration scheme. Using this approach, we have turned our process owners into business owners. Currently, the committee of the company group is comprised of partners from business units, thus making all parts work together to create a shared vision.

Because we have international corporations as customers and partners, business transparency is of utmost importance. We cultivate this priority concept right from the arrangement of office space. You may notice that office desks here have no drawers.

Though it is more easily said than done, we all work by the Clean & Clear principle. It was hard to overcome employees' habit when we started redecorating the office in 1997, making the whole office space glass‐walled. Our people must learn to operate in

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transparent environment. Eventually, all people have complied and internalized transparency as our organizational culture.

INTANIA: Please elaborate about School of Thought and Management Lab. Khun Kitja: First we found that new graduates have different fundamental business attitudes and thinking habits from our culture. A conventional training approach takes longer to acculturate the BE Petrothai way. We then established School of Thought model in 1997, enlisting partners as mentors to train new recruits to explore, think, and learn to work in the context of our organizational culture. This prepares them to eventually become process owners and business owners in the future.

Management Lab is the principle that allows practitioners to turn problems and liability at works into lessons learned. Those problems are collectively reviewed and probed to find leaner processes to solve them in the future. There are many management models derived from Management Lab, which have later become intellectual properties of our organization.

INTANIA: What is Foster Community?

Khun Kitja: It is the principle we live and work by in this BE Petrothai community. The principle prescribes that new members are taken cared of and mentored by senior members until they are mature enough to share greater responsibility. On the other hand, mistakes are accepted and shared together by learning from them in the Management Lab. This is the conceptual background of how to shift the salaryman's into business owner's mindset. Nowadays, we work together by treating all employees as community owners.

This way we can attract smart people to stay and expand the company's business to grow steadily.

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INTANIA: The management tools you described, how have they affected the operations of BE Petrothai ?

Khun Kitja: By using these business models, we can provide much effective problem‐solving management for our customers. We have staff members who are experts on particular equipment, on standby to consult with customers in need. We have communication channels with international manufacturers to promptly respond to customer's problems.

We have our own software to facilitate logistics management, helping us decide how to manage inventory at minimal cost and lowest risk.

We helped factories fix problems many times. I'd like to mention two significant cases that we became great use to customers. The first case is a large company in Rayong that needed a major turnaround in 2001. From an initial assessment, the company was expected to spend 35 million baht for purchasing valve spare parts. We participated in the project planning, sending our people, well‐equipped with our maintenance software, to closely work with the customer. In the end, the expense was reduced to just 6 million baht.

Another case is a large factory that needed to shut down operation because of gas compressor's break down. It was initially estimated to be fixed in 40 days. But we participated with the customer in the repair management and spare parts procurement.

That's why we have been trusted by world class manufacturers, such as GE, Koch Chemical Group, and PECOFacet. We are representative of many international brands of equipment.

We are even accredited by TRACE in business transparency.

INTANIA: What are BE Petrothai's next targets?

Khun Kitja: The operation cost in factories depends on efficiency and maintenance of equipment. We found out that some large factories in Thailand stockpiled so many spare parts that they were left unused even after the equipment were discharged. The Zero Inventory concept helps us collaborate with customers to reduce spare parts inventory to zero, possibly saving up to a hundred million baht for a factory.

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INTANIA: How do you think about Thailand 4.0?

Khun Kitja: Thailand 4.0 is about infrastructure development for digital technology that will facilitate working lifestyles of the younger generation. Technological innovation is key to determination of the country's future, enabling people and work process development to be in full alignment. This will contribute to creation of breakthrough solutions, which will fundamentally drive our country's economy towards stability and sustainability.

INTANIA: Are there anything else you want to add?

Khun Kitja: I think business organizations today need conceptual frameworks beyond modernization and efficiency, they need to strive for transparency and integrity. BE Petrothai is a Thai corporate, and we are proud of that, but we strive to be fully accepted by international partners in all business dimensions.

We are out of space here. If opportunity allows, we may come to learn more about other BE Petrothai's management tools, for instance, Innovative Ecosystem, School of Thought, and especially about corporate transparency accreditation, which some of us may not have heard about before.

-------------------------------------------------------------------------------------------------------------------------------Published in INTANIA Magazine October, 2016

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