9 October 2018

Centralization of the maintenance

regime for TNB’s built-facilities towards enhancing the life-span & productivity of the assets

Ir. MAHATHIR NOR BIN ISMAIL General Manager (IFM)

The core business of TNB is supply of electricity, which is the focus of the main-stream/local management – concentrating on the maintenance regime of the core-business electrical assets.

CORE NON-CORE

Substation

Switchgear

Transformer

Cable

Office HVAC

M&E

Build-up: more than 8.7 mil. sq feet Land: more than 33.6 mil. sq feet More than 350 cleaning contracts

TNB’s FM in the Past

System /

Processes Local

management

in silos

Hardcopy BMS

underutilized

Reactive

M&E Manual

Inspection

Sourcing &

Contracts Multiple

contracts for

individual

trades

Multiple

KPI

Contract on

numbers

(manpower)

People /

Competency Trade specific/

Functional

mentality

Lack technical depth

to solve persistent

issues

Manpower &

skillsets Technology

Structured

training

(Investment,

not

expenditure)

Process

From

technician to

supervisor

(Multi-

Tasking)

Professional

certification

(GBI, Energy

Manager, Ir.)

Specialisation

courses &

accreditation

Digitalisation

of assets

Automated

workflow

Analytics &

diagnostic

Integration

with FM

processes

Sensors

Managing Building Life Cycle

Incorporate

maintainability

in design

Asset

Assessment

(ARP)

Contracting Strategies

Re-align

FM

processes Strategic

outsourcing

(economies

of scale)

Performance

based

contracts

(SLAI)

Redesign

KPI

Value Unlocking Program (VUP) Transformed IFM

Why need Transformation: • GROWING PORTFOLIO: Platinum, Gold, KTCC • VENDOR MGMT: increase no. of multiple contract • SUSTAINABILITY: rising operating & energy cost, Green-focus • CUSTOMER: zero tolerance, >> expectation • MANPOWER: ageing, low productivity, labour crunch • CHANGE IN > technology, specialized M&E FM LANDSCAPE:

C

M

M

S

In the past, TNB has been managing its FM in silos/decentralized way, with room for improvements. Transformation is needed (WHY?), focusing on the 3 main strategy (WHAT?): (1) Reimagining Processes, (2) Investment on People, (3) Adopting Technologies

Improve

evaluation

Run-to-fail

mentality /

culture

WHY?

WHAT?

B

I

M

March 2017

IFM officially established

These 3 transformative aspects (WHAT? in previous page) guided the formulation of the detailed time-bounded action plans (HOW?) in the TNB’s Facilities Management Transformation Roadmap

31 Dec

Data governance : • Data cleansing for square foot area of TNB property

including data gathering of built-in electrical and mechanical fixtures

1 Jan 1 Mac Apr/May

Pilot project CMMS @ HQ + Kuarters Kelana Jaya

Pilot project CMMS @ main buildings

Fully taking over facility mgmt. for Peninsular Malaysia

2018 2017

Q4

Specialized Training

Towards SBU

2019 – 2021

SUSTAIN VALUE (2)

OPEX

CAPEX CONTRIBUTE VALUE

(3) via ARP (Asset Rehab. Project) B

ette

r P

erfo

rman

ce

IBR Target & Impact

IDENTIFY VALUE (1)

Streamline Process: • Develop standard service level agreement (SLA) and KPI that

becomes the base for scope of work • Transition from non comprehensive to comprehensive

operation and maintenance

Enablers – Management Information System: • Develop Computerized Maintenance Management System

(Award winning @national level)

Digitization: • Digitization of data to facilitate data analysis

Condition Assessment: • Facilities assessment on all warehouses and major office

buildings

Realignment of Org. Structure

Contracts Strategy (Outsource)

HOW?

Asset Owner

- Indicates the goals and parameters at strategic

level -Decides Policy

-Decides on budgeting & spending

Asset Manager

-Support the primary business of a

company / organization

-Assess specific risks related against value set by owner

-Contracting providers with best price and performance

Service Provider

- Provides the practical design, installation and

maintenance -Keeping costs to a minimum for

specified level of work

Aligning to the basic principal of ISO 55000 (Asset Management), practised by TNB’s core businesses :

TCO (Total Cost of Ownership)

Existing Business Model

New Integrated Business Model

Maintenance Repair

CAPEX

(Asset

Replace

-ment)

Maintenance Repair CAPEX

TCO (Total Cost of Ownership)

TNB-IFM’s role is shifting: S.P. towards A.M.

With the ongoing transformation & enhanced confidence, TNB-IFM’s role is shifting from just a Service Provider, towards becoming the Asset Manager

With the new role, TNB-IFM is adopting the TCO model: enhancing the maintenance regime will reduce the repair & capital replacement cost, supporting the IBR’s Regulatory Period budget limit

The next few pages will illustrates few of the initiatives under the 3 main Strategies of

Rethinking FM processes and strategies

Leveraging technologies

Transformation of human capital

PROCESS / STRATEGY : there are varieties of business models that were proposed for maintenance centralization of the quarters (employees’ residence) for one of TNB’s hydro power stations

OPTION 2 OPTION 1

STATUS QUO

OPTION 3 OPTION 4

Repair &

Routine

Maintenance

SSJ SG PERAK IFM@REVD

BQ

preparation for

major projects

Maintenance Contract:

Status Quo

Advantages:

1. Flexibility on manpower distribution

between Plant & Quarters

2. No additional cost

3. Concentrated/Focus on

maintenance regime

4. Extra assistance from REVD

personnel at no significant extra

cost

TT09/10

IFM

TBK +

Chenderoh

TT09/10 TT07/08

IFM

REVD

Sg Piah

Pergau

Plant Quarters

Existing Maintenance Contract PFM

Advantages:

1. CMMS + IOC for

quarters

2. SLA – repair &

response time

Disadvantages:

1. Extra cost – PFM

(schedule rates)

2. No Flexibility to

assist operation at

Plant

Existing

manpower at

plant &

quarters

New

manpower

Existing

maintenance

contract (Plant &

Quarters)

New Contract for

Quarters

Advantages: 1. Total

Focus on

Plant

2. CMMS +

IOC for

quarters

3. SLA –

repair &

response

time

Disadvantages: 1. High extra cost

to SSJ Sg

Perak

2. Longer lead

time to

implement new

contracts

(P&SC) & new

staff (HR)

Technology: higher productivity are gained by automating certain task through the establishment of ICT-driven enablers

Best practices

Economies of

scale

Award-winning CMMS (Computerized Maintenance Management

Systems) + smartphone’s Apps

IOC (Integrated Operation Centre) monitors workflows of

work orders and complaint management

B.I.M. adopted for new TNB’s HQ building

For Cleaning services: TIERED approach to optimize for Cost and Quality

Tier 2 Tier 1 Tier 3

• Categories of buildings:

• State Buildings (including TNB Jalan

Timur)

• VIP Buildings (TNB HQ, TNB Dua

Sentral) (including buildings within

TNB Bangsar HQ)

• These buildings will have most

comprehensive BQ with “Premium” level of

service - key driver for this Tier is QUALITY

• Categories of buildings:

• Corporate Offices

• Kedai Tenaga

• Quarters

• Regional Warehouse

• “Medium” level of service providers,

BALANCING quality and cost

• Categories of buildings:

• Fault Finder Structure (remote

locations, few staff headcount)

• Stores and Yards

• Workshops

• Key driver for this tier is COST

Contracting Strategies: working closely with TNB’s PROCUREMENT division, embarking on ‘Category Strategy’ study & execution

Profit Margin • Low profit margin affected by price competition

Overheads • Includes expenses related to maintenance and functioning of the supplier

organization, including the management fees

• Overheads are typically higher for companies that provide Integrated Facilities

Management due to greater management requirement

Material Costs • Includes equipment consumables and uniforms

• Typically national inflation rates drive the increase in this cost

• Malaysia forecast inflation rate from 2018-2021 is 3% per annum (Source: IMF)

Labour • High labour intensive industry, contribution to high labour cost contribution to total

cost

• Average labour cost has been increasing at an average rate of 5.2% per annum

from 2010 to 2016 (Source: Department of Statistics Malaysia)

• It is estimated that over one third of workers are foreign workers, the declining number

of foreign workers is expected to create further pressure on labour costs. Number of

foreign workers has declined by at an average rate of 5.8% per annum (Source:

Department of Statistics Malaysia)

Detailed/comprehensive study is needed for an effective Category Strategy formulation. For e.g. Cost Structure Breakdown is critical towards understanding the business model for Cleaning Services

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% o

f to

tal c

ost

COST STRUCTURE COST DRIVERS DESCRIPTION

Source: The Hackett Group, Frost and Sullivan and Accenture Research

Profit Margin: 5-10%

Overheads: 10-15%

Material Cost: 20-25%

Labour Cost: 55-65%

1. Building Maintenance by ILSAS (6-7/2/18)

2. Understanding of Lift Component by

Schindler (12-14/3/18 & 16-18/4/18)

3. Introduction of Professional Cleaning by a

cleaning FM co. (26-28/2/18 & 11-13/4/18)

4. Chiller System by Carrier (14-15/5/18)

5. Gen-set System by Sime Darby

6. Waterproofing

Manpower & Skillsets: TNB-IFM is investing heavily on training. Single skill-set (M or E or C&S) engineers & technicians are extensively trained to be multi-skilled (M and E and C&S). The total organizational structure shrink by > 30%

Example of Training provided:

Security guard to

ARP technician

A meter-installer & a linesman

to ARP technicians

Talent Growth is practiced, where low-skill workers were developed to be technicians in the ARP (Asset Rehab. Project) team

Thank you