MBOS Introduction

An Introduction to Management by Olympic System

(MBOS)

SHARKS Team

Training ManualJune 20-21, 2006

Contents

• Why MBOS

• What is MBOS

• Four Pillars of MBOS1. Index Competition

2. Skill Development Activity (SDA)

3. Personal Performance Objective (PPO)

4. Monthly Incentive

Why MBOS ?

• Winning Competition in the World

• Adopt effective management system and methodology

• Establish and cultivate corporate culture

• Develop human resource

Why MBOS ?

World Competition !!!

Internal Company Competition

Management by Olympic System

(MBOS)

World Class Company World Class Company ““To beTo be……”……”

Set Up Olympic Overall Target

EBITDA 25%Customer 1st choice

Super Efficiency CompanyAll Perfect People

willGE

Citib

ank

Coca-C

olaMicrosoft

IBM

Hewlett-Packard

Morgan Stanley

Four S

eason

s Hote

l

AT&T

Nik

e

British A

irways

STRATEGY CAPITAL

HUMAN RESOURCES

APP

green-cycle enterprise

Continuously bethe world’s premier

fully-integratedforestry, pulp and paper,

Kimberly Clark

Why MBOS?

• EBITDA already 25% ?• Are we already no.1 Customer Choice ?• Are we already The Most Efficient

company ?• Are we have the best and perfect people,

employee and management ?

Vision ExplanationAPP will continuously be the world’s premier fully-integrated forestry, pulp and paper, green-cycle enterprise

Integrated: increase the overall benefit to the business by operating throughout the industry chain from forestry, pulp and paper to converted paper products and related industriesPremier:

The Strongest: manufacture high-quality products through the most effective management team and the strongest R&DThe Most profitable: the healthiest financial and the most profitable enterpriseThe Largest: be the leader in the industry and number one in the world, equipped with the largest production capacity, the most state-of-the-art technology and the most thorough customer service network

Green cycle: take care of the large cycle from afforest ration to pulp & paper making, as well as the small cycle of using recycling paper for production.Vision = What do we want become?

APP Mission

1. Sensitivity to the Environment: promote afforest ration to naturally increase forests back into the environment, minimize erosion, alleviate greenhouse effects and benefit everyone.

2. Advocate paper-making culture: promote the sustained manufacturing of pulp and paper.

3. Improve lifestyles: perfect mankind’s needs in printing, packaging, writing, sanitation, etc.Mission = What is our business ?

APP Value & Philosophy

• Share Value PILOT• Philosophy RICH

Our Value (PILOT)

1. Pursuing Excellence— Keep challenging ourselves and our perceived limitations— Improve continuously and endeavor at all times— Select the excellent among the best, and keep pursuing the

highest efficiency and effectiveness

2. Integrity— Promote a “down-to-earth” philosophy and devote our heart

and soul to what we are doing— Modest, objectivity and sincerity: “Practice what you preach”— Respect for privacy, independent thought and intellectual

property

Our Value (PILOT)3. Leadership

— Be a model to your subordinate through your own behavior— Be proactive, aggressive, and innovative to create the

greatest value— Encourage subordinates to develop their team’s collectives

potential

4. Ownership— Exert the spirit of “Take-it-as-my-own-business”— Be responsible for our company sustainability— Actively display your wisdom and capability

5. Teamwork— Benchmark the best and encourage each other— Communicate frequently and help each other — Respect each other and achieve progress altogether

Philosophy (RICH)

1. Respect the Individual- Employees are the most precious resource of our company- Provide learning and self-developing opportunities to enhance employee capabilities

2. Innovation and Development- Adopt state-of-the-art technology and advocate innovation to realize breakthroughs

- Manufacture high value-added products to meet market needs

3. Customer Satisfaction- Customer satisfaction is the ultimate target. Through reverse-

thinking and a market-oriented mindset, develop products and services that create extra value for our customers.

Philosophy (RICH)

4. Highest Performance- Our group always requires employee to do the

right thing using a proven scientific approach- Benchmark the highest performance of world class

enterprises to measure our employees and theirteam’s performance, achieve the world’s number one business performance.

We will be very RICH by adhering to

our business philosophy

Why MBOS ?





How to Survive ?How to Survive ?

Company characteristics to survive in the globalization era are:• 1. Market Position…….

• 2. Management System…...

• 3. Resource Mobilization…....

• 4. Environmental Scanning…....

MBOS

Source: Warren Keegan Associates, Inc., USA, 1998

Key Levers

KPI

SetOlympic Target (ROI, EBITDA)

Why MBOS ?





• Have the spirit of “Challenge the limit, pursue the perfection”

• Have the ambition of “Embrace high aspiration, Create high performance”

• Have the consciousness of “Not being No.1 or No. 2 Market leader, we can be out from the market.”

• Have the mentality of “Never give up.”

• …..

Corporate Culture……

Why MBOS ?





For employee….

•MBOS provides an effective platform for employee to get together to resolve most critical business issues

•MBOS acts as the vehicle for employees to contribute breakthrough problem solving solutions and innovative improvement ideas

•MBOS functions as the system for recognizing employee effort and achievements

Contents

• Why MBOS

• What is MBOS

• Four Pillars of MBOS1. Index Competition

2. Skill Development Activity (SDA)

3. Personal Performance Objective (PPO)

4. Monthly Incentive

IntroductionWelcome to the Olympics!

• Management by Olympic System (MBOS) - the management system used to drive performance at Asia Pulp and Paper.

• MBOS was first conceived in 1997 and is constantly being further developed and updated.

• The system is grounded on high aspiration targets(based on ROI or EBITDA) and uses a combination of team and individual competitions to drive performance towards the targets.

• Further manuals detail the Olympic target setting process and each of the four ‘pillars’ which MBOS is built upon

Olympic PrinciplesOlympic Principles

Olympic Target$

Time

High Aspiration

Breakthrough Thinking and Continuous Improvement

EBITDA

Current

Olympic Spirit

Take Challenge

Olympic spirit triggers people to challenge current situation, set high aspiration and create breakthrough way of thinking. This will accelerate improvement which lead to the Olympic Target achievement.

MBOS MBOS with Olympic Principleswith Olympic Principles

Olympic Principles MBOS• Fair rules of the game • Identification using Key Performance

Index (KPI)• To be the best in every competition • Setting high aspirations with Olympic

Targets

• Always benchmark to the highest record

• Identify and benchmark with world class target

• Fair-play and open evaluation • Reliable data to support objective evaluation

• Healthy competition • Provide healthy competitionmechanism to create conducive environment

• Winners are recognized, losers are given a second chance - therefore they have to practice harder

• Provide reward/ incentive for winners.• Create learning situation to improve

performance

Evolution of MBOS

• Implemented SGA in 1994

• In 1996, the Chairman announced “Reaching the Sky” vision.

• Learn Skill Olympic Activity (SDA) from LG Group, Korea

• Integrated all kinds of improvement activities in APP to be MBOS in May 1997

• Introduced CTR and 6 Sigma approaches in 2000 and deployed in all APP mills/HQ functions from 2002

• Formally re-launched MBOS to strengthen management innovative activities in 2003

MBOS MAIN CONCEPTMBOS MAIN CONCEPT

Olympic Target

KPI

Target >

Actual?

Performance Improvement

Change Target

No

Yes

SDA/SGA/6σ/Project PPO Index Competition

MBOS should become a WAY of life at APP

Review

Cross Sharing Training

Action

Incentive & Reward

EBITDA TARGETEBITDA TARGETVISION/MISSIONVISION/MISSION

Strategic Planning

Benchmarking

MBOS: Major Activities

KPI Target

Individual evaluation &

achievement of reward based on

individual performance

target

Competition on specific indices to

ensure apple to apple comparison

As team base management tools

for continuous improvement

activities motivated by Olympic

competition and recognition

Incentive bonus provided to all staff based on overall monthly

performance operational

PPO*/BSC MonthlyIncentives Competitions

Index SDA/6σ/SGA

We will introduce KPI, Index Competition & SDA onlyPPO and Monthly Incentive will deliver by request

MBOS Introduction

Documents

Transcript of MBOS Introduction