SAP PPM at theheart of driving

Transnet’s ValueChainRonnie KanniahRebatho Madiba

DISCLAIMER

This presentation and the information shown in the slides herein is for thepurpose for illustration only, and does not represent any actual facts of thecompany.

Agenda

Transnet at a GlanceTransnet at a Glance

The journey of SAP PPM in TransnetThe journey of SAP PPM in Transnet

The fundamentals of understanding SAP PPM to position it in TransnetThe fundamentals of understanding SAP PPM to position it in Transnet

Key LearningsKey Learnings

Transnet at a Glance

Transnet is the largest and most crucial part of the freightlogistics chain that delivers goods to each and every SouthAfrican. Every day Transnet delivers thousands of tons of goodsaround South Africa, through its pipelines and both to and fromits ports. It moves that cargo on to ships for export while itunloads goods for overseas

Our vision and mission is to be a focused freighttransport company, delivering integrated, efficient,safe, reliable and cost-effective services to promoteeconomic growth in South Africa.

Transnet at a Glance

TNPA

TPT

TFR

Questions?

TE

TPL

Transnet at a Glance

Overall framework forMarket Demand Strategy MDS delivery

MDS objectivesSignificant economic growth and socio-economic impact for South Africa

Human capital strategy

Volumes andcustomer

satisfaction

Regulatory and keystakeholderengagement

Finance and fundingSafety, health,

environment andquality

Capital planningand execution (incl.

procurement)

Operationalefficiencies and

productivity

High performing organisation (including MDS governance and SPO's)

MDS strategiesCapturing unfulfilled logistics demand and creating capacity for that demand

Key areas to be tracked to ensure success of initiatives

MilestonesKPIs Outcomes and deliverables

SOURCE: Transnet Group RMO13

MDS initiatives

The Journey

• Why are we embarking on this journey:- Consolidation of the Transnet Portfolio and Project Management

- Standardisation and consolidation of the tools used to manage projects in Transnet

- Reduce the level of efforts in implementing SAP PPM

- By Leveraging on existing SAP PPM in Transnet

SAP PPMfor all

TransnetProjects

Engagementwith business

on SAPPPM forStrategicInitiative

Monitoring

Startdevelopmentof SAP PPM

for CI

Engagementwith businesson SAP PPMfor CAPEX

Engagementwith businesson SAP PPM

for CI

SAP PPMfor ICT,CAPEX

GO Live ofSAP PPM for

LSS

SAP PPM forContinuous

ImprovementDeployment

End StateEnd State2009

Principles behind the approach

Innovations ManageInnovations

ReviewOpportunity

SelectResources

ExecuteProjects

Handover &evaluate

Reward &Recognise

Cor

pora

teP

lan

Empl

oyee

s

ERM

Stra

tegi

cIn

itiat

ives

Legi

slat

ion

Project Management Principles

Change Management Principles

Transnet Portfolio Management Process

MANAGE THEINNOVATION

REVIEW THEOPPORTUNITY

ASSIGN THERESOURCE

EXECUTE THEPROJECT

HANDOVER &EVALUATE

REWARD &RECOGNISE

• Log the innovation• Review and classification• Innovation qualification

using questionnaires• Workflow and notification• Complete MI Phase• Approve Gate1

• Innovation becomes anopportunity for continuousimprovement

• Prefeasibility study• Metric assessment: AS-IS and

TO-BE• Further qualification and

scoring• Opportunity ranking to form a

pipeline portfolio of projects• Workflow and notification• Complete RO Phase• Approve Gate2

• Assign Project Manager• Assess required financial

resources if known• Workflow and notification• Complete AR Phase• Approve Gate3

• Execute the project accordingto methodology:- Just Do It- Lean- Six Sigma- CAPEX/OPEX- ICT- Product Development

• Workflow and notification• Complete EP Phase• Approve Gate4

• Benefits tracking• Workflow and notification• Complete HE Phase• Approve Gate5

• Top Projects of the Monthreporting

• Top Project of the YearReporting

• Employee or Project teamrewards

• Workflow and notification• Complete RR Phase• Approve Gate6

Innovation/idea Opportunity Project Benefits Employee/TeamReward

Gate

1G

ate1

Gate

2G

ate2

Prioritised PortfolioPrioritised Portfolio Assigned to PMAssigned to PMG

ate3

Gate

3

Gate

4G

ate4

Project is executed tocompletion

Project is executed tocompletion

Gate

5G

ate5

Benefits realised for 12months

Benefits realised for 12monthsGood or bad idea!Good or bad idea!

JDIJDI LeanLean Six SigmaSix Sigma

AnalyseAnalyse DesignDesign DevelopDevelop TestTest FinaliseFinalise

Integration of the Transnet Project Management Methodologies

DMAICDMAIC

DefineDefine

MeasureMeasure

AnalyseAnalyse

ImproveImprove

ControlControl

CAPEX Concept(FEL-1)Concept(FEL-1)

Pre-feasibility(FEL-2)

Pre-feasibility(FEL-2)

Feasibility(FEL-3)

Feasibility(FEL-3)

Execution(FEL-4)

Execution(FEL-4)

Finalise(Close-

out)

Finalise(Close-

out)

DMAICDMAIC

DefineDefine

MeasureMeasure

AnalyseAnalyse

ImproveImprove

ControlControl

Just Do ItJust Do It

JustifyJustify

DoDo

InformInform

EvaluateEvaluate

ICT

Implication of SAP PPM

Methodology

Project ExecutionLevel

PortfolioManagement

Level:

PortfolioManagementCommittees

Lean sixSigma

DMAIC

ICT

SDLC/ASAP

CAPEX

PLP

Voice of the CustomerVoice of the Customer1. Corporate Plan/RMO Input2. ERM3. Customer Engagement4. Project Requests/Wishlist5. Employees

1. Wireless Networkupgrade

2. Installation of equipment3. 1064 Loco acquisitions4. Improvement of

turnaround time5. CRM System

implementation

1. Continuous ImprovementsCommittee

2. OPCO3. CAPIX/Investment

Committee4. RMO

SAP PPM Landscape in Transnet

Transnet SAPPPM

Transnet National PortsAuthority

Transnet Freight Rail Transnet Engineering

Port

folio

s/S

trat

egic

Buc

kets

Tran

sact

iona

l

syst

ems

ERP System 1 ERP System 2 ERP System 3

TETPL

TNPATFR

OperationalExternal System

Operational ExternalSystem

* The portfolio items can belinked to different ERP andOperational Systems to extractall required data. This allows toconsolidate a heterogenoussystem landscape.

ARIS & Web Methods PlatformARIS & Web Methods Platform

MiddlewareMiddleware

What is SAP PPM

• A central solution based on a SAP platform, designed to manage portfolios ofideas/innovations, allowing visibility and governance of the execution of projects .

• Manages all project types; CAPEX, ICT, Engineering/Product Development and Continuous improvement

• Enforces discipline aligned to best practise; PLP, PMBOK, Lean Six Sigma, Prince 2

• Strong toll gate approach; phase-gate-phase on initiatives and projects

• Workflow; informing the right person to action the respective task, milestone, phase or gate approval

• Reporting and Dashboard

Functions of SAP PPMPortfolio

Management

Bucket structure

Initiative lifecyclemanagement

Pipeline visibility

Idea Ranking and scoring

Tollgate management

Document management

Knowledge management

ProjectManagement

Project Execution usingvarious methodologies

Execution and monitoring

Programme management

Resource management

Tollgate management

Workflow Management

Capability of WBS costsmonitoring

Integrated 3rd Party projectmanagement tools

Document Management

Dashboard &Reporting

Portfolio Performance

Programme Performance

Project Performance

Strategic, tactical andoperational views

Financial performanceview: benefits tracking

Progress view: task &activities, GANTT

Integration to otherSystems

Integration to SAP

Integration to documentmanagement systems

Integration to third partysystems through

middleware

Integration to datawarehouse

Integration to MS Projectsserver or other 3rd Party

tools

Transnet Value Chain: hierarchy model defined

Transnet core business objectives; top level mapping of thebusiness, with customer centricity.

Transnet value chain details of the companies businessdrivers.

Key business processes defining the details of thebusiness value chain from

Business Process high-level activities

Business Process detailed activities withdefined attributes of systems,documentation, policies, roles.

Business Process supporting SOP

Transnet L0 Value Chain Model

Cus

tom

ers

Satis

fact

ion

CO

RE

SUPP

OR

T

e.g. Legal Compliance, Finance, ICT, HC, Procurement, Property, Projects, etc.e.g. Legal Compliance, Finance, ICT, HC, Procurement, Property, Projects, etc.

Support ServicesCus

tom

ers

Nee

ds

Partners / Stakeholders

e.g. Supply Chain Partners, Regulatory Bodies, Shareholders, etc.e.g. Supply Chain Partners, Regulatory Bodies, Shareholders, etc.

Capacity andDesign

Marketing andSales

AssetManagement

OperationalPlanning &Execution

CustomerServices

Principles of the bucket structure

Steyn (2001, 2003, June 2010 & July2010

Bucket StructureTransnetPortfolio

TransnetEngineering

ProcessBucket

Just Do It

Lean

Six sigma

CAPEX

ICT

Transnet FreightRail

Transnet FreightRail

ProcessBucket

Just Do It

Lean

Six sigma

CAPEX

ICT

Maintenance

Transnet NationalPorts Authority

ProcessBucket

Just Do It

Lean

Six sigma

CAPEX

ICT

Transnet Ports Terminal

ProcessBucket

Just Do It

Lean

Six sigma

CAPEX

ICT

TransnetPipelines

ProcessBucket

Just Do It

Lean

Six sigma

CAPEX

ICT

Transnet CapitalProjects

ProcessBucket

Just Do It

Lean

Six sigma

CAPEX

ICT

TransnetProperty

ProcessBucket

Just Do It

Lean

Six sigma

CAPEX

ICT

TransnetCorporate

ProcessBucket

Just Do It

Lean

Six sigma

CAPEX

ICT

Bucket Structure-TPTTransnetPortfolio

Transnet PortsTerminal

Strategic PlanningCycle

Just Do It

Lean

Six sigma

CAPEX

ICT

Demand &Capacity Mngt

Cycle

Just Do It

Lean

Six sigma

CAPEX

ICT

Service Marketing &Service Design Cycle

Just Do It

Lean

Six sigma

CAPEX

ICT

Order ConfirmationCycle, Pricing and

Quotes

Just Do It

Lean

Six sigma

CAPEX

ICT

Berth Plan and VesselPlanning

Just Do It

Lean

Six sigma

CAPEX

ICT

Asset Management

Just Do It

Lean

Six sigma

CAPEX

ICT

Container SectorOperations Execution

Just Do It

Lean

Six sigma

CAPEX

ICT

Portfolio Management at thedifferent levels of the Value Chain:

PrioritisationMonitoring

Portfolio Management at thedifferent levels of the Value Chain:

PrioritisationMonitoring

Innovation Qualifying Questionnaire aligned to MDSDoes this idea align with the expansion and maintenance of economicinfrastructure?

Does this idea align with growing volumes and improving market share?

Does this idea align with enabling regional integration?

Does this idea align with improving performance, productivity and operationalefficiencies?

Does this idea align with promoting sustainable growth?

Does this idea align with prioritising safety, skills development andprocurement?

Does this idea align with creating regulatory certainty and compliance withpolicy including optimising the social and economic impact of all interventions?

Does this idea align with driving research and the deployment of new andcutting-edge technologies?

Is the source of the idea driven by executive from a strategic perspective?

Is the solution to the problem known?

Filtered Portfolio

Opportunity Qualifying Questionnaire

Question

Estimated hard benefits from the Financial Analysis and/or primary metric?

Estimated soft benefits from the Financial Analysis and/or primary metric?Expected reduction in defectsDoes this project require capital investment?Is the cost of the effort worth the benefit?Expected number of team members required to drive the project tocompletion?Expected duration of projectWill this project improve customer satisfaction?Will this project have significant strategic impact?Is there baseline data available for the process?Project complexity due to issues with respect to schedule, budget, customerrequirements, difficulty collecting data, union, contractual & regulatorybarriers, change management, size of working group affected, geographicdispersion,etc?Can this project be replicated at another centre/depot?Is this an existing process?

Transnet’s Top Initiatives

Key Learnings

• Learn and understand the SAP Solution you are implementing and the VALUE itis brining to your organisation!

• SAP PPM is the enabler of corporate performance management in Transnet

• Understand the under-lining business principles that support the SAP solutionfrom a best practise and organisational perspective!

• It is possible to innovate with SAP!

• SAP PPM ROCKS!

Q & A