Aarti Industries: SMART Project Delivery Helps Grow Market Share
As shifts in the global supply chain brought new opportunities for an Indian chemical manufacturer, they set in motion an aggressive expansion plan. A dizzying array of challenges rose up to threaten timelines and market share potential. Realization’s SMART Project Delivery coupled to a partnership mindset help the client meet the moment.
Aarti Industries is a global manufacturer of specialty chemicals. The India-based company’s products are used in the downstream manufacture of pharmaceuticals, agrochemicals, polymers, additives, surfactants, pigments and dyes.
The company stood to benefit in recent years as India became the first-choice destination for chemical manufacturing with recent slowdowns and rising costs in China’s chemical industry. As global circumstances shifted, demand and opportunity grew. Aarti saw an opening to grow market share.
Aarti positioned themselves to meet new demand with an aggressive capital expenditure plan. $170 million worth of projects on a 24-30-month timeline across multiple locations in Gujrat and Maharashtra. First, the plan would include expanded capacity to cater to newly generated global demand. This would mean they could satisfy multi-year contracts with leading companies around the world. Second, the plan would also improve and expand the capacity for existing product lines. Third, Aarti envisioned new product development projects to cater to ongoing demands.
The timing mattered, and the stakes were real. Delays could impact market share. Delayed delivery of products could damage the company’s reputation. They could see a loss on their investment—first mover advantage is powerful. As more players came on the scene, margins would drop for everyone. Delayed projects could also put tax credits at risk.
A razor thin management team
At an organizational level, an unprecedented expansion had to get up and running much faster than anything they had come before. Aarti planned multiple initiatives–hiring, building out the organization and developing safety protocols. Work was happening across various locations in Gujarat and Mumbai; large and small contractors and vendors were involved. They were facing many interactions and transactions. Many shared resources across different projects and operations. A small management team limited their ability to manage everything well.
Projects in silos and a lack of visibility
The Realization team began working with Aarti in October 2017. Two of the six capacity expansion projects were already underway. Management expected to deliver the first project over the next six months. But there was a problem. The projects were being planned and executed in silos. Each silo had its own schedules and deadlines, but the impact on overall project delivery dates was unknown.
The power of focus and finish plans
The first step the Realization team took was to create integrated plans for each project. This allowed Aarti to understand and tackle true risks and bottlenecks and establish valid delivery dates for each project. More important, it allowed them to set realistic business goals. Which meant they could keep their promises to customers.
To make sure the dates weren’t only valid but also as aggressive as possible, the Realization team introduced its focus and finish approach to creating the plans. Typically, focus and finish helps teams finish projects 20% faster or more. It mandates that all related activities, even across silos, be planned together as a supertask. That way these related activities always stay together during the execution phase and prevent resources from getting spread too thin.
Realization also created go, no-go milestones to prevent projects that weren’t quite ready from being launched. This helped prevent unnecessary firefighting, also known as a mad dash to the finish line.
The overall impact was a doubling of project execution rates. The company—with the same small management team—could now execute projects twice as fast.
Dynamic schedules and early warning signals
SMART Project Delivery provided dynamic and prioritized schedules for all team members. This allowed teams to work on the right tasks at the right time, and to stay fully coordinated as the work got underway.
Project-level early warning signals meant management could be proactive. As an example, the system once predicted substantial delays downstream because of the slow pace of ordering. Management then cleared the calendar for ordering decisions and negotiations with vendors to get the project back on track.
At another point during construction, the system issued an alert that fabrication of piping had become critical in one project and a four-month delay loomed. Management moved resources from non-critical fronts to the critical front and found an additional contractor.
A potential four-month delay became just one.
An Effluent Treatment Plant (ETP) is an integral piece of any chemical plant. In one project, the ETP scheme was open-ended while management’s focus was on other areas. SMART Project Delivery immediately flagged that the ETP plant was becoming critical and would delay the project. Management took proactive steps to bring the ETP plant under control and avoided delays.
Top management speaks about improvements
"We have seen a 30%-40% improvement in our timeline of our projects and I am sure as our people get more and more trained, this can improve further in future."
MR. RAJENDRA V.GOGRI, CHAIRMAN & MANAGING DIRECTOR
“Basically any kind of project which was taking around maybe three years or two-and-a-half years, now we can finish it in two years. Realization’s software acts like Google Maps for our projects. Potential delays are transparent to the entire project team. All of us know exactly what actions we need to take to prevent them from becoming actual delays.”
MR. RENIL R. GOGRI, WHOLE TIME DIRECTOR
