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CLIENT CASE STUDY


Transforming Thermax into a global competitor in the power business

Targeting growth through efficient operations and cost reduction

Overview

Thermax Power set itself aggressive growth targets, but recognized that to achieve these, it would have to significantly reduce its costs and improve its schedule adherence to better meet customer expectations. Accenture Strategy identified opportunities across multiple operating parameters and formulated these into an operating vision targeting 100 percent schedule adherence, 10 percent cost reduction, and a 40 percent improvement in operations and maintenance productivity. As a result of its enhanced execution capabilities, Thermax achieved a notable increase in schedule adherence, significantly reduced its costs through technical and commercial levers, and realized a marked improvement in manpower productivity.

DOWNLOAD THERMAX: TRANSFORMING THE POWER BUSINESS TO ENHANCE GLOBAL COMPETITIVENESS [PDF]

Opportunity



Thermax Power set itself aggressive growth targets including doubling its revenues over three years as well as achieving a significant increase in profit before interest and tax (PBIT) and a four-fold boost in operation and maintenance (O&M) capacity. However, the business faced a number of significant challenges. Growing competition from local and Chinese companies, demanding customers insisting on compressed schedules, cost overruns and the need to enhance technology use across the engineering, procurement and construction (EPC) and O&M businesses placed increasing pressure on its profitability. The company recognized that to realize its ambitious goals, it would have to significantly reduce its costs and improve its schedule adherence to better meet customer expectations.

Outcomes

Accenture Strategy began with a diagnostic and design phase in which it conducted benchmarking research on cost, schedule and productivity. Opportunities across multiple operating parameters were then identified and formulated into an operating vision targeting 100 percent schedule adherence, 10 percent cost reduction, and a 40 percent improvement in operations and maintenance productivity.

An integrated planning, monitoring and control mechanism, underscored by standardized work and cost breakdown structures, was designed and implemented. Productivity norms were established for construction and engineering across the geographies in which Thermax operates. Constructability studies were introduced to ensure smooth integration between engineering, procurement and construction. Strategic sourcing levers were implemented, resulting in substantial cost reduction. An end-to-end subcontractor management process covering strategy, database, selection, monitoring and rating was designed. A robust risk assessment and estimation tool was designed for all new tenders. Staffing norms were designed and implemented by type and size, along with innovative operations solutions to improve productivity. A management dashboard was developed for real time performance monitoring across all sites.

To help drive future growth, Accenture Strategy developed an entry strategy for a chosen market, including an operating model and capability gap assessment. Sustainability was supported by establishing a category-led central procurement organization. A project controls competency center was set up to integrate planning and control activities, including data analytics for decision making. The functional organization was transformed into a project organization with project managers assuming sole responsibility for projects’ success.

As a result of its enhanced execution capabilities, Thermax achieved a notable increase in schedule adherence, significantly reduced its costs through technical and commercial levers, and realized a marked improvement in O&M manpower productivity.

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