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Published on November 5, 2007

 A senior PTT executive has revealed a close relationship between the corporate performance of the giant oil, gas and petrochemicals conglomerate and the demanding requirements of Thailand's premier management accolade, the Total Quality Award.

"PTT is an ever-changing organisation," says its executive vice president of gas operations, Suwanunt Chatiudom. "When we were a state enterprise, we aimed to be the best of all. Then we went through the tough preparation process ahead of privatisation. Now we are bracing for the challenges of becoming a regional player."

Suwanunt says that PTT Group's drive for excellence over the past 39 years has focused on change and adaptation. These qualities enabled the PTT Gas Separation Plant (PTT GSP) in Rayong to win the Total Quality Award (TQA) for performance excellence in 2006.

Remarkably, since 2002 only three Thai companies have won the award, which is comparable to the Malcolm Baldrige National Quality Award in the US, and several other world-class management awards. The other two recipients were Thai Acrylic Fiber in 2002 and Thai Paper, a unit of the Siam Cement Group, in 2003.

"TQA requirements have been used as a framework to push the corporation forward, respond to stakeholders, drive employees, set corporate strategies and enhance corporate governance," Suwanunt explains.

"We have to change for improvement; we are stepping forward if we change. We will have new thinking if we embrace changes. To leap towards changes, we must embrace changes."

PTT set up its first gas-separation plant in Rayong in 1985, and four more have followed. Still, it is lagging behind Malaysia's Petronas in terms of gas supply.

"Our vision is to become a regional gas-separation-plant (GSP) player. After that, the next challenge is to become a global player. PTT aims to increase its overseas revenue from 5 per cent to 20 per cent of total revenue and to be in Fortune's top 100 global companies, rising from its present 206th place. These things will only be possible when we're recognised in the global community," Suwanunt says.

This requires strong leadership, one of the seven criteria for the award, and one that carries the heaviest weight. Yet PTT GSP has also paid attention to the other six areas: strategic planning; customer and market focus; measurement; analysis and knowledge management; human resources; and process management and business results.

PTT GSP began adopting TQA practices in 2003, as a means of evaluating whether it was meeting international standards, after working according to its own policies for some time.

Now, while other companies simply focus on their own business and clients, the TQA guidelines require that PTT GSP regularly compare itself with other players. Commenting on the practice, other companies have complained that they are unable to compare themselves with other players because of a lack of information. However, Suwanunt regards this as an excuse. He says it shows that they pay no attention to others and they don't care what others are doing.

"Over the past five years, we've been paying attention to the entire value chain, not just selling products. While we are tackling our problems, we have to see how our suppliers or clients tackle their problems," he says.

Human resources is one area that attracts the company's close attention. Suwanunt points out that there used to be two types of workers, white-collar and blue-collar. Now a new species has emerged, gold-collar workers, or those who are always seeking challenges.

Although PTT GSP is a popular target for job-seekers, it also has a sizeable turnover rate. Suwanunt says this means that while PTT GSP may be great in terms of management, it is not so great in human-resource development. If these gold-collar workers had been motivated to come up with innovations, they would not have left.

Driven by the TQA requirements, PTT GSP has sent a questionnaire to all employees asking them to outline their career goals and when they expect to achieve them.

"If they are positive about their career path, they will remain with us," Suwanunt says, adding that the company's employees stayed for an average of 15 years.

One of the outcomes of the staff survey was a complaint from employees about "top-down" communications. To change this, PTT GSP's executives attend a monthly meeting with junior employees where the latter propose their ideas of how to improve operations and say what problems they have encountered.

In terms of knowledge management, all of PTT GSP's operations are now recorded, with improvised solutions for comparative studies. The data are kept for new workers so they can learn from their predecessors and find time to work out new solutions.

One of the success stories stemming from this process involves the regular need to close the plant down for maintenance. Previously the plant was closed for 45 days every year, and the company suffered the attendant loss of revenue. Arising from a series of brainstorming sessions, some procedures were modified, and the maintenance period was reduced to just 15 days.

In another case, some equipment was modified to increase its capacity.

Importantly, whatever the company embarks upon, all of its employees, as well as the public, are informed for the sake of transparency.

Although the procedures dictated by the TQA requirements are tough, they are necessary for all companies wishing to become stronger players in their respective industries. Their very difficulty may, in fact, explain why there have been only three TQA recipients since the award was first introduced in 2002.

According to Boondee Bunyagidj, acting director of the TQA office, the main point in introducing the requirements in Thailand is to offer a management framework to Thai companies so they can improve their organisational performance and enhance their competitiveness.

She says that simply reading the criteria could discourage Thai companies from following the requirements. However, she recommended that they start the process immediately and learn by trial and error. Engaging themselves in the process now will motivate employees to achieve new goals, she feels.

At present the TQA is administered by a national committee appointed by the prime minister. It consists of leaders from all sectors, including government agencies, private business and educational institutes. The committee's responsibilities are to draw up policies and guidelines for the award programme and approve award recipients.

To promote the TQA Award, chief executives from Thai companies will be invited next year to become assessors. They will have to commit 30 to 50 hours of their time in the course of a year. Although their companies may not have applied for the awards, simply joining the process is seen as a means of encouraging them to implement TQA practices so they may try for the award in the future, Boondee says.

As Suwanunt says, the TQA framework will help PTT GSP move towards a high-performance business position. It will also be a business unit capable of enduring bad times along with good. This, he says, is only possible when the company has high technology, innovations, knowledge management, leadership and excellence in costing. And he believes that improving the company in line with the TQA framework will help PTT GSP achieve its goals.

Achara Deboonme

 The Nation

Rayong