Name of Project: SBS Tanks
Region: Region 3
Project Manager: Leigh Chetty
1. Project Background
SBS tanks was established in 1998. They design, manufacture and install Zincalume steel panel water storage tanks and reservoirs for the South African market, the African Continent and overseas markets. Over time SBS Tanks developed into a manufacturing business so that it could reduce its reliance on suppliers and ensure on-time delivery. SBS Tanks has established themselves as a market leader in the manufacturing of a range of liquid storage tanks and intend maintaining this position. The high-quality materials used to make the tanks is of Zincalume material. This material is a blend of aluminium with zinc in an alloy coating. Research has shown that this is a way to greatly enhance corrosion resistance. SBS Tank’s product range from a 12 Kl capacity tank to a 3,3 Ml storage tank. Their Markets include Government at Local Municipality level, the commercial sector where fire is considered a major risk by Insurance Companies, Mining Industry, Food and Beverage Sector and Water Conservation. Export markets in the UAE have been secured and other countries are being explored.
The primary aim of the Business Turnaround & Recovery Project in 2016 was to grow the existing business revenue streams that would make the business sustainable in the long term, thus the focus was on:
• Accessing new markets
• Meeting Health and Safety Standards
• Improving performance of key staff
• Developing new products and
• Reducing the volume of work outsourced
The Biometric security system implemented to improve efficiency of wage computations for employees is still being used and maintained. SBS Tanks has also implemented the Performance Management System and using it to review staff and the corporate activities. The corporate integrity of SBS Tanks and credibility among stakeholders, customers, prospective clients and the public is well maintained by adopting an international safety standard OHSAS 18001. Over and above the BT&R interventions, SBS Tanks has currently moved from just being a water industry working with water and tanks to now adding another pillar of Food Storage and Security. With all these successes, SBS Tanks was a finalist in the Regional Productivity Award and a winner in the National Productivity Award in October 2018.
Covid-19
SBS Tanks currently has xxxx staff complement. Through the work done in collaboration with the Business and Turnaround & Recovery, SBS Tank continues to maintain the staff morale, and this has proven to take the corporate through the hash days of Covid-19 pandemic from April 2020. SBS Tanks main focus was to also keep employees at work during the various lock downs levels. The company’s aim was to not retrench or loose staff. The strategy was to maintain productivity and leveraging on the added food security pillar to bring more income. SBS Tanks also managed to provide their employees salary increases even during the Covid-19 pandemic lock downs.
2. Challenges
As an emerging company they faced many challenges in acquiring new business to ensure continuous growth. The key areas of concern, challenges that were identified during the review of SBS Tanks are highlighted below:
• The availability of skilled and trained labour.
• Budget constraints associated with the recruitment of highly skilled labour.
• Black Steel tanks fabrication cost as a result of outsourcing
• Raw material costs as percentage of sales are high.
• An area of concern is the fact that Liquidity ratios showed movement to a less liquid position and if not managed could result in cash flow constraints could exist in the near future.
• Limited use of technology-based systems for inventory management, outsourcing and stock control.
• Assessment of existing processes revealed levels of inefficiency and ineffective controls within the manufacturing and assembly process.
3. Productivity SA Approach
The primary aim of this turnaround project was to grow the existing business revenue streams that would make the business sustainable in the long term.
As mentioned before, the proposed turnaround strategy was to ultimately result in an improved operational process, efficient and timeous delivery service to customer’s world-wide, consistent quality of service, compliance with Health and Safety Standards, improved communication at all levels in the organization, improved staff morale and motivation, improved sales and bottom-line profit for the business.
The Future Forum, a collaborative structure representing management and employees with the purpose of actively involving management and labour in the programme during all its phases, was established. The above formed basis for the development of a work plan outlining the turnaround strategies and required interventions.
The proposed actions were approved by the Future Forum and Productivity SA and consisted of several deliverables. The following interventions were conducted to date:
• Establishment of the Future Forum committee
• Development of an Export Market Growth and Diversification Strategy
• Implementation of OHSAS 18000: Safety Management System
• Implementation of ‘Biometric Access’ control system
• Develop a Performance Management and Development System (PMDS)
• Business process assessment
• Future Forum and Productivity Champions Training
4. Results and Impact
Lessons Learned
The collaborative work done by the Business Turnaround and Recovery and SBS Tanks from inception to close-out has led to not only implementing interventions identified to support effective turnaround solutions, but has also left the BT&R programme with tremendous lessons learnt and to be carried over as best practices. These include:
1. Instrumental and Revolutionary Interventions
Corporates are faced by increasing pressure to become more sustainable, develop innovative products and ideas and keep up with the changing technological landscape. In this context, corporates are looking for solutions that not only make them respond better to the current economic challenges, but also be adaptable and flexible in their strive to become more sustainable. The assessment with SBS Tanks showed the need for the BT&R Programme to think further than just addressing the identified problems, but also to prioritize interventions that are instrumental and revolutionary in bringing something new to the company. Not all the corporates are at the same level, thus interventions will need to be carefully selected to suit the corporate and keep the company motivated and enthusiastic toward a productive change.
2. Leadership and change management
3. Every company needs a leader to set the vision for the organisation and ensure that outputs are achieved, that cost drivers are kept low and that expenditure targets are realised.. However, every leader is often faced by challenging tasks and increasing demands . The assessment with SBS Tanks showed that SBS Tanks has embraced the facets that come with efficient leadership, which steered the company through the uncertain terrains of the economic downturn and Covid19, while maintaining staff morale. In this context, the follow up discussion highlighted the need for the BT&R programme to expand its scope to include a focus on leadership training and change management. Too often are our interventions focussed on the company’s operations, while neglecting the importance of ensuring that leadership is equipped and capacitated to successfully steer the ship.
Utilisation of Free and Available Resources
The assessment with SBS Tanks has provided another lesson learnt that the Business Turnaround and Recovery Programme will maintain going forward. Previously there was a large focu on outsourcing all requirements and interventions. This proves to detach the core objectives of the BT&R programme from the client. In this regard, internal capacity must be enhanced and upskilled to ensure that our practitioners are better resourced in delivering the solutions. This would ensure that solutions are focussed and tailored and would further instil a sense of ownership for the PSA team, which makes for effective follow-ups. It also motivates good relations between the internal teams and the corporates. This way, it becomes easy to follow-up on lessons learned and monitoring the impact and future sustainability of the programme.