Process Fitness Programme

Basic slides
March 2006
Contents

• Programme Objective and role as enabler

• Context and visual identity
• Reasons to improve our systems and processes
• Enabling BP to compete
• Benefits to stakeholders
Schedule & Areas of work
• 2002-2004 Establishing, Starting up and Expanding the
programme
• The 3 elements of the Programme
• Leadership Team
• 2005 overview & 2006 overview
• Improve Workstream Overview & Process Area Objectives
• Design – Overview of phases
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Overview of Programme
 Process Fitness
Programme objective

Process Fitness will develop and

implement sustainable solutions based
on simple, consistently executed SAP
enabled processes.
This will support the delivery of R&M
strategies and generate additional
value and efficiencies for customers,
suppliers, the organisation and our
employees.
Process Fitness enabling the businesses to deliver benefits for:
• Customers and Suppliers: transformed experiences with improved service &
transactional excellence
• The organisation: embedding capabilities to deliver sustainable growth in line with R&M
strategies
• Employees: integrated, simplified processes to reduce duplication and increase efficiency
Process Fitness
Programme context

• In BP continuous improvement is part of our culture. Process

Fitness is about improvements to create value,
enhance customer service and increase our competitive
performance.  
• Process Fitness is helping to formalise our approach to process &
systems improvement, so that together, we can find better ways
of doing things now and redesign the way we do things in the
future.  
• Process Fitness is about working together with the businesses
and functions across R&M to enable our customer offers.
• We focus on the core analytical and transactional processes
that impact the lives of our customers and employees every day.
Making processes more efficient, effective and integrated will
enable our organisation to focus on delivering value and be
more competitive. 
• The DNA spiral structure is the visual identifier for the
programme, illustrating the R&M intention to make process
fitness an integrated part of what we do, part of the genetic
material of our organisation and therefore part of our DNA.
 Process Fitness:
strategic context

• Our stated aim in R&M is to grow organically, after a

period of major company acquisitions
• Organic Growth means growing new and existing
customers
• Our processes are important, as they have a fundamental
impact on how our customers, suppliers and employees
view us
• To grow and become one of the world’s leading marketing
companies, our processes have to become world-class
• We will improve processes by identifying duplication, lack
of clarity and inefficiency
• Making processes more effective, efficient and integrated
will help us to focus on delivering value and to be
competitive
• Process Fitness is a major contributor to the R&M strategy to
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Process Fitness:
reasons to improve our systems and processes

Voice of the Customer

Customer surveys say our processes are
below expectations:
• 15% of invoices sent to customers in one PU were incorrect
• 60% of customer orders incorrectly entered in one PU

Technology and processes

BP struggles with fragmented systems and
poor data integrity:
• Systems and processes becoming more
complex
• 13 different platforms in Europe inherited
from years of mergers and acquisitions
(Mobil JV, Castrol, ARAL) does not enable
business integration
Employee and supplier experiences
Employees spend unproductive time
compensating for weak processes:
• 50% of fast-track deliveries are mistake driven
in one PU
• Only 40% of orders get into system
correctly first time around

Market trends
• No clear leader - 5 global competitors Competitors
share 50% of the market Have made headway in their process journeys:
• Customers are consolidating/ looking Shell
for global capability • Replacing 140 ERPs with 1- Process led
Exxon
• Integration of Downstream and Chemicals
on a single platform

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 Process Fitness:
enabling BP to compete
one of many world class organizations, who implementing improvement
grams, to ensure their processes and systems enable their organisational competitiveness

One global
design &
standards

GMS
System
Deployment
Model

Commercial
Multiple,
Localised
Designs

Multiple processes Business Model Integrated Processes

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Process Fitness:
benefiting stakeholders

CUSTOMERS
• Don’t have to change
processes to fit BP
• Delivery of the right
product to deadline, with
correct billing
• Processes happen automatically and
correctly, customers can spend time
focusing on their businesses
EMPLOYEES
• Reduced time solving
problems caused by
inefficient processes.
• More time to focus on
value-added activities for
• customers
People feel they are marking a positive
difference to customers
• Common process language shared across
Segment, able to share best practice

SHAREHOLDERS SUPPLIERS
• BP has proved they can grow • BP orders accurately and
organically, maintaining their pays bills on time, reducing
supplier costs
growth performance and • Ability to link processes
• shareholder
BP has madereturn
the most of their directly to BP and can
acquisitions minimize human
• BP’s focus on operational excellence has intervention - lower costs
made a difference in creating new value mean better
• Managed prices
by BP for BP all over the
consistently
• BP’s underlying performance vs. world as one supplier, able to offer better
competition encourages me to invest in global prices
their company
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Schedule and areas of work
 Process Fitness: 2002-2004
Establishing, starting up and expanding the
programme

•April 2002 Downstream (now R&M) conference in Berlin

to start
the customer-focused journey and highlights need for
improvement
•April 2003 First “Process Fitness” team established to
meet needs
•May-Dec 2003 Process Fitness methodology
development
•Jan 2004 Process “Accelerators” – process improvement
projects launched to test and prove the methodology
and deliver early wins.
•April 2004 SAP becomes R&M standard for provision of
core IT systems
•July-Nov 2004Development of business case for a
process-
based, global and Segment-wide project
•Dec 2004 SET approval given
•1Q 2005 Mobilization: ‘Design’ ‘Improve’ activity 11
 Process Fitness
3 elements of the programme
Process Fitness is one Programme integrated across R&M. This enables to create insights
and learning gathered from initial process improvements to inform systems redesign.
Capabilities and business engagement developed in Improve will ensure successful
deployment. By integrating Improve and Design initiatives, there is a balance of shorter-term
and longer-term benefits delivery.
Process Fitness incorporates three1 inter-related
Deploymen workstreams:
t
1 Design Programme Highlights so
• integrated global process & data Programm far
design e • Substantial value
• focus on core processes & capabilities • Deployment delivered in 2005 with
• enabled by system replacement of processes PF enabling the
2 Improve Programme & systems businesses to deliver
• based on c.$180m through
• Process accelerators & Workout tool:
value, process
Purchase to Pay, Transportation systems, improvements. A
Management, Pricing, Crude & Refining functionality
region
Feedstock Optimisation (part of IRIP), deployment starting further $400m
Lubes Lean Manufacturing and Order to at Nerefco in 1Q targeted in 2006.
2007
Cash, Commercial Optimisation and • Design Programme
Marketing
Refinery Maintenance deployment entered Define stage
• Creates process expertise within In Iberia targeted
business in 3Q 2007 • Total Financial
•Programme
Creates funding & cross
and fertilizes
Process Design
Management, Programme Prize - $3bn over 6
years
Governance 12
 Process Fitness 2005
Embedding process improvements & capability and
kick-starting the Design work

2002 2003 2 2005 2006 2 2 2

004 007 008 009
DEPLOY
• 2005 Improve above Plan
• High level Design complete
• SELECT FM approved
• Detailed design starting Feb
2006

WE WERE
HERE
‘DESIGN’

‘IMPROVE
First “Process ’
Fitness" team Launch Process
Accelerators
April 2003 Jan 2004
-

Create the Agenda Prove the concept Scale the capability

2002- 2003 2004-2005 2006-2008

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 Process Fitness 2006:
Engaging the businesses with to produce detailed
Design work and the further embedding of Improve in
the business
2002 2003 2 2005 2006 2 2 2
004 007 008 009
DEPLOY

• 2005 Improve above Plan WE ARE

• High level Design complete HERE!!!
• SELECT FM approved
• Detailed design starting Feb
2006

‘DESIGN’

‘IMPROVE
First “Process ’
Fitness" team Launch Process
Accelerators
April 2003 Jan 2004
-

Create the Agenda Prove the concept Scale the capability

2002- 2003 2004-2005 2006-2008

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Process Fitness: Improve Workstream
Paving the way for Design and Deployment

Improve teams are helping the business to

increase efficiency in 9 core process areas,
prioritised by R&M
- Order to Cash (O2C)
- Purchase to Pay (P2P)
- Crude & Feedstock Selection (C&FS)
- B2B Negotiated Pricing
- Commercial Optimisation in Europe (CO)
- Fuels Index Pricing Accelerator (FIPAC)
- Refinery Maintenance
- Transportation Management Accelerator
(TMA)
- Lubes Manufacturing
Forecast total benefits of $170m delivered in
2005 and over $400m in 2006
Paves the way for design and deployment of
new systems by:
- building capabilities and business
engagement 15
Process Fitness: Improve Workstream:
Objectives of the key process improvement areas
Objective Rationale Project
Projects
Lead
Order to Cash process improvement to drive BP towards better • Customers are finding BP difficult to do business
Order to cash and more consistent service to customers, create operational with (especially strategic accounts) Tim
and working capital efficiency and enhance employee
Improve satisfaction through • accurate and timely invoicing • improved
• Several initiatives currently underway result in a
duplication of effort
Carmichael
credit management • improved end to end cycle time
Maximise net price realisation from the customer (in non-fuels
• Lack of a standard approach to pricing across
B2B markets) through: • optimisation customer offers • defining
true customer profitability and aligning performance the R&M segment Marshka
Negotiated
Pricing
management • improving compliance to discounting/cost
recovery policies • managing unprofitable customers • cost
• Similar efforts in other companies and BU's have
created significant value
Kiera
reduction by customer behavioural change after offer analysis

Deliver significant sustained value, as committed to in our FM, • BP has no common P2P processes or systems
Purchase to by safely implementing sustainable, common, streamlined P2P across R&M Stewart
buying methods (Fastrack & Gated) for all 3rd party spend for
Pay (P2P) the top 10 countries (85% of non non- hydro carbon spend • Lack of strategic agreements causes significant Glover
across R&M). leakage to occur

• Current Crude & Feedstock Selection is not

Crude & Create a common crude & feedstock selection operating model
- design & specify the components/capabilities that can be
common across the refineries and trading Brad
feedstock implemented across the system that will leverage the
offices.
selection distinctive asset trading relationship BP operates today.
• Operational processes, accountabilities and McCracken
structures vary widely.
Improve efficiency of Transportation Management processes
Transportatio to reduce Secondary Transportation costs (approx 1bn$ in Mark
• BP has fragmented approach to secondary
n scope). Improve supply reliability, which will positively impact
customers thus revenue generation.
transportation across the segment. Strauch
Management
• Changes in external environment have led to the
Increase gross margin in Fuels, develop & operationalize a
Fuels Index standardized pricing and demand forecasting approach to
emergence of more sophisticated customers Uduak
creating new opportunities for price leakage
Pricing reduce uncertainty, risk, optionality, and brand value.
(US/WRS/ANZ).
• Internal benchmarking has identified significant Udofia
differences across the globe

Reduce maintenance and turnaround cost reduction in
Refinery refineries. Improvements in Asset Management and
Maintenance
Maintenance will yield an increase in availability.
•It is difficult to measure the performance of the Dwain
maintenance process and how it ultimately impacts
availability and as a result people are not rewarded Scott
for doing things that eliminate problems

Commercial The European Commercial Optimisation Accelerator is exploring how incremental value can be released through a more Clive
integrated approach across the fuels Value Chain. This involves optimising pricing and volume allocation decisions from
Optimisation customer to crude to maximise returns for the BP Group. Christison
Reduce Lubes manufacturing costs across blend plants. E.g. Reduced lead times and cycle times, Flexibility to more cost
Lubes Lean effectively tailor manufacturing runs to dynamic market demands.

Underpinned by over 100 projects across all SPUs delivering early wins! 16
Process Fitness: Design Workstream

country GO LIVE Europe

1st July 05 1st Feb 06 1st Aug 06 implemented
1st Qtr 07
Q1 09

SELECT DEFINE Gate EXECUTE Gate

Gate

P90 4/5 months 6 months

“Appraise”
High Level Detailed
Deploy & Sustain
Design Design

construction Testing & Go live

HL design Detail design
blueprint Pilot tests

•High level view of future

solution
•Assessment of technology and
capability needs
•First mapping to new
applications
•Process visions describing a
common processes model.
•Understand the change
impacts
•Create “configuration
document” or Template
•Some processes simulated in
pilots.
•Change Agenda worked in
detail
•Country and OU involvement
•Specific requirements taken
into account
•The rubber hits the road.
•Country level implementation teams
•The solution is configured in the
applications
•Implementing hardware, software
and scenario testing
•Training and change programs are
delivered
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Process Fitness Leadership Team

Program Director
Peter Duffy
• Program Director reports to
Design VP Improve VP R&M Group Managing
Craig Bealmear Blair Kelly Director John Manzoni
• The Programme and
Change Mgt & Improve & Design
Senior Adviser Workstreams each have
HR VP
Craig Iseli advisory groups (the PAG,
Ann Ewing
IAG and DAG respectively)
to provide guidance and
Program Office VP DCT Lead peer assistance. The
Karl-Heinz Seifert Sheila Doyle members are from
business and functional
Kirsty Bashforth Serena Lang leadership
Business Marketing Lubes
• Each SPU has a
Transformation Vice-
Jeff Pitzer Ronnie Forbes President (in yellow boxes)
Refining Retail who is part of the PAG and
the DCT Lead is working
very closely with the PF
Robert Genovese programme.
Aromatics & Acetyls The latest version of the detailed organisation charts, can be found on the
Process Fitness web-pages
http://randm.bpweb.bp.com/default.asp?p=709&mi=1256

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