Doing the Right Things in the Right Way. Effectiveness Improvement at NIS.

One of the Company's main priorities in the next three years is to increase efficiency in all business segments.

A difficult economic situation and an adverse macroeconomic climate in Serbia and the region have inevitably affected business results of companies. In order to survive in the market and adjust to difficult business conditions, companies must focus on internal resources, i.e. on increasing their operational effectiveness.

Since it is an objective of NIS to remain one of the leading and most efficient companies in the Balkans and continue its intensive development, a new organisational unit has been formed within the Strategy and Investmentsin order to provide assistance and support in the implementation of additional business improvement measures.

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The objective of the newly established Effectiveness Improvement Department is primarily to approach this type of business in a systematic manner as operational effectiveness is essentially the way in which positive effects for the Company are produced by optimising various activities and processes currently carried out. The main task of the new Department is to establish an organisational structure which will support constant striving towards the improvement of operational effectiveness and motivation of all employeesto come up with new ideas, constant monitoring of the competitors, market and global trends in oil business, so the Company could adequately respond to all challenges.

Effectiveness improvement involves all business areas. Its main courses of action include the following: improvement of the existing Company capacities, development of new business areas, product quality improvement, procurement of new equipment for services, and implementation of new technologies not previously applied in the Company’s production units.

In addition, it is required to introduce new corporate tools and mechanisms in daily work – developing special offers for consumers, enhancing staff training in order to improve their competencies, more proper control of project implementation, introducing new approaches in the commercial segment and better planning of investment activity in all organisational units.

Major investment and organisational projects have already been implemented resulting in operational effectiveness improvement, i.e. achieving respectable results. These projects include: putting a modern hydrocracking complex into operation, modernisation of the petrol station network, introduction of new equipment and technology in the area of exploration and production, remodelling the organisational structure, etc.

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As a result of the aforementioned changes in operating conditions, there will be a series of small-scale projects in the upcoming period which are to result in an increase in operational effectiveness improvement, anincrease in the profitability of business operations conducted byorganisational units of the Company, an increase in the volume and improvement in the quality of products and services rendered, and introduction of operational resources not previously used. Operational effectiveness involves production and application of technologies and practice not used by the competitors, as well as improvement in organisational effectiveness and professional competencies by means of training and development of the Company staff, as it is the staff and their entrepreneurial and innovative approach to the performance of work tasks that are actually crucial success factors in the process of operational effectiveness improvement.

As part of the project to increase the operational effectiveness of all organisational units of NIS, the energy efficiency improvement programme has been conducted at NIS for the last three years. The programme is aimed at introducing the practice of saving and rational use of energy in the entire company, as well as at implementing new technologies to reduce the consumption of energy.

Rewards Stimulate Inventiveness

In order for the Operational Effectiveness Improvement Programme to produce the expected results, each employee must change their approach to performing their work duties and, by employing their own innovativeness, contribute to improving the effectiveness of work processes, developing new business operations, applying new technologies and innovations, improving competitiveness, etc.

Operational effectiveness improvement is to result in an increase in the profitability of business operations conducted by organisational units of the Company, an increase in the volume and improvement in the quality of products and services rendered, and introduction of operational resources not previously used.

To this end, a staff motivation programme entitled I Have Got an Idea has been launched. The programme involves monetary and valuable rewards for the implementation of feasible ideas, active involvement of the management,and their fast evaluation and development, which is also the most essential factor in its implementation.

In terms of the ideas, they should actually be proactive proposals for increasing the effectiveness of business operations and commercial processes, competitiveness and sustainability of NIS in all activities, as well as accomplishment of strategic objectives. This means that the employees will be rewarded for the ideas related to business processes (production, sales, expenses, supervision, etc.), the ideas related to internal procedures which improve operating processes, the ideas helping the Company to exceed its competitors by applying new engineering or technical solutions, and also the ideas inspired by strategic objectives.

In the upcoming period, efficiency must be improved in a systematic manner. In every organisational unit, both managers and employees will have an opportunity to contribute to improved effectiveness in their respective lines of duty. It is in this way that efficiency will become a cornerstone of NIS advancement, development and leadership.

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