IMPROVED BUSINESS PERFORMANCE BY IMPLEMENTING A STRUCTURED EXECUTION APPROACH (A STUDY CASE IN PT. AAA)

• Main Author: Fitrini, Dwi
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/46646
• Institution: Institut Teknologi Bandung

PT. AAA has been operating in the country for above 90 years, managing more than 80 active fields, ranging from matured primary, secondary, and up to tertiary recovery techniques with excellent recovery. This company has successfully delivered operational excellence through safe, reliable, efficient and environmentally sound operations and has significantly spent capital investment targeting the best opportunities with safer and faster execution. The company is recently facing various operational challenges and many of fields are producing at high water cut. There is indication of performance gap which is shown by declining production trend with increasing operating cost. With current low oil price environment, these conditions have become the reason for expediting performance improvement initiatives. Current volatile and challenging business conditions advised company to focus on base business activities and maintain operational excellence within remaining years to contract life by delivering high value work over and well services jobs, executing reactive and proactive maintenance to minimize production loss. This research is initiated by reviewing the historical result of business plan, scorecards, aspirational goals that impact to the business performance, operational issues and challenges that influence to the routine operations activities. External environment factors are analysed using PESTEL, while internal environment factors are analysed using McKinsey 7S Model. Finally, Current reality tree is built in this research with ultimate objective to achieve the world class performance through disciplined cost management by lowering lifting cost unit. The tree helps to understand the cause and effect relationship of the current performance gaps and find its root causes. Based on all analysis, it is recommended to implement a performance improvement program to resolve the identified root causes and ensure the delivery of company business objectives. This management tool ensures linking the business strategy and planning with operational execution. It is embedded in the normal planning process and consisting of step to define the aspirational targets, translate the business plan into the actionable plans and consolidate into a structured execution management system, known as execution excellence framework, and closely tracking and monitoring progress. The critical elements for successful cascading execution plan are communication, collaboration and alignment across the functional teams, leader’s commitment in development and monitoring the execution focus items, allowing timely decision making and sufficient resources as needed, also commitment of assigned person to complete the task with high quality within the agreed time frame or even earlier. This research will finally present how the use of a structured execution approach to not only provide solution for performance gaps but also deliver improved cash flow through managing operating expenditures, operating near communities, and approaching the end of Production Sharing Contract, given various challenges on the declining production and aging facilities.