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Special Report
Attock Refinery Ltd

Financial Expert from Attock Refinery Ltd., Speaks on "Productivity Measurement"

Feb 12 - 18, 2001

The Attock Refinery Ltd (ARL) is one of the major contributors to Pakistan's total refining capacity, which is estimated at 11.2 million tonnes per annum. Of the total ARL's share is around 1.57 million tonnes a year while the refinery has plans for capacity expansion, establishment of downstream units, plans for product pipelines, new export refinery complex and establishment of a petro-chemical plan. These ARL investment plans offer great opportunities for massive investment estimated to the tune of $5 billion in the refining sector. These investment plans chalked out by ARL include Pre-flash Unit of 15000 barrel per day, Capacity addition of 50,000 BPD, Petrochemical plan of 80,000 bpd, Oil Pipeline 100,000 bpd, Export Refinery 300,000 bpd, Port facilities 4.5 million tonnes per annum, Isonerization Unit 150,000 tonnes per annum, Visbreaker 100,000 tonnes per annum, Lube Refinery 40,000 tonnes per annum and Co-generation 5 megawatt.

Mohammad Naeem, Manager Finance of ARL having rich experience in efficient productivity addressed a seminar on Productivity Measurement organized by the Institute of Chartered Accountants of Pakistan recently in Karachi.

Speaking on the subject, he said that the essence of productivity is to work more intelligently rather than intensively by efficient use of all available intellectual, capital, physical assets, time and knowledge resources.

Elaborating the concept of productivity, Naeem said that productivity is the relationship between output and input generated by the system. He said that financial capital and its management in an organization might have 50-10 per cent impact on market capitalization. However if intellectual capital and proper knowledge management effectively supported these financial resources the impact on market capitalization shoots up to the level of 50-90 per cent.

Naeem observed that leading-edge organizations use performance measurement to gain insight into, and make judgements about the effectiveness and efficiency of their programs, process and people.

These organizations, Naeem said, have to decide on what indicators they will use to measure their progress in meeting strategic goals and objectives, gather and analyze performance data, and then use these data to drive improvements in their organizations and successfully translate strategy into action, since it is only through such systems that they can remain high-performance organizations. As more organizations adopt performance measurement functionally they will give up decision-making based on hindsight and begin to truly realize the importance of making more informed and timely business decisions.

Naeem pointed out that currently the information technology is laying the foundation for core focus of management for gauging productivity improvements. Being spellbound, accountants are jumping into the fray to add value by creating innovative methods and techniques in measuring performance of resources.

Dilating upon the subject, Naeem pointed out the new approaches of productivity improvement in the current global scenario which include the effective use of E-Commerce which allows boundary less automation by virtue of global explosion in IT sector. It helps an organization in deciding the benchmark by applying the process of comparisons of the performance within the organization as well as of the competitors in the market. Another important area he described is the new approach for knowledge management by sharing the knowledge.

For application of new productivity improvement approaches to keep a balanced scorecard of an organization, Naeem identified the areas of financial perspective, customer perspective; internal perspective and constant learning and growth which he said are contributory to each other. In order to succeed financially, on one hand we have to look at what kind of financial performance should we provide to the investors and on the other we have to look into how we should be seen by our customers to achieve our vision. In order to satisfy both the shareholders as well as the customers we have to keep a constant vigil at the business process to excel in the market to the satisfaction of the two important segments. Here comes the element of learning and growth into the picture to achieve this vision as to how we can sustain our ability to change and improve the productivity of the organization, Naeem said.

On the productivity measurement in Pakistan, Naeem however pointed out certain issues, which needed to be addressed for improvement. These issues he identified as lack of professional management, lack of vision and objectives, lack of communication and sharing, non-existent parameters for accountability, productivity evaluation, miss-directed compensation system, lack of supportive culture, non-communication of information to workers and lack of action of metrics. Responsibility lies on the shoulders of the upcoming young business leaders as well as the existing senior executives to create a culture capable of overcoming these deficiencies, Naeem recommended.