Internal audit committees
Under the guidance of our Internal Audit Department, we carry out regular audits and investigations across the business, covering financial, compliance and operational reviews.
In FY2017, 30 audits were conducted, covering both global and region perspectives, 20 of which were global and focused on Fixed Assets, Inventory Management, Expenditure and the SAP system and infrastructure. The remaining 10 audits were region specific and covered Procurement, Statutory Compliance, Sales and Marketing and Logistics. Results were shared with the SMT; the Risk Committee is updated quarterly on the implementation progress of the related management action plans.
Enterprise Risk Management and Business Continuity Committee
One of our top priorities is to maintain uninterrupted operations and a constant supply of carbon black to our customers. Our Enterprise Risk Management (ERM) system helps us identify and anticipate risks across our business, enabling preparation for possible disruptions.
The ERM committee meets three times per year and engages with regional and corporate function directors to identify potential risks and define mitigation strategies. The Chief Risk Officer then presents these risks and strategies to the SMT.
Participants from other business areas may be invited to attend ERM committee meetings to clarify and provide input on specific issues that require expert views. On a rotational basis, a Regional President is invited to attend each meeting to identify and discuss regional risks; those identified are now included in the ERM committee meetings agenda.
Two areas have been the subject of greater focus in FY2017:
- Cyber risks – the Chief Information Officer (CIO) and Chief Information Security Officer (CISO) developed a cyber risk map, which is discussed regularly at the ERM Committee meetings;
- Water risks – a subcommittee working group was set up to assess water risks, focusing on economics, flooding and recycling in our production cycle at each plant location. The group produced a map to chart overall risks.
Business Continuity Planning
Each of Birla Carbon’s locations has a comprehensive Disaster Recovery and Business Continuity Plan (BCP) to prepare for interruptions due to natural disasters or disruptions. Our BCP approach has been developed over the years with a built-in local aspect: each plant focuses on key prevention elements and the ability to maintain our supply. Read more in our BCP statement (pdf, 83KB).
Since FY2015, we have been rolling out a Business Continuity Management System (BCMS), based on ISO 22301. The BCMS guides our specific recovery strategies for the most crucial processes and activities for our business, ensuring the continuous supply of carbon black to our customers. In FY2018, it is our intention to upgrade and standardize across all sites our recovery strategies in the BCP documents following the ISO 22301 standard.
World Class Manufacturing: empowering our people and sharing best practices
We expect our facilities to reach the highest standards – both externally and internally. One internal certification is the Aditya Birla Group’s Corporate World Class Manufacturing (WCM) standard. The WCM initiative promotes and supports the highest standards in manufacturing and production. Its framework deals with all aspects of business excellence, focusing on leadership, stakeholders, operational and financial performance, customers and markets, processes, employees and society.
WCM began in the Aditya Birla Group in 1996, and has since matured, allowing all our sites to gain a greater understanding of the significance of business excellence. Four new plants have achieved bronze level certification and one has achieved gold in the previous Chairman’s award process. These award-winning plants and previous award winners are working toward achieving higher levels of accomplishment, while others incorporate WCM concepts in their day to day operations.
Previously, WCM existed in support of our Best Practice Group: a system through which sites identified, developed, refined and shared proven techniques. This methodology, which helps enable SOE, has now been integrated within the WCM system – which pushes Birla Carbon to be a more responsible steward, globally.
Through FY2017, 27 new best practices have been implemented, bringing the total to 453. These new best practices were developed primarily to start incorporating WCM concepts into the existing process. To facilitate this change, two existing Best Practice categories (Maintenance and HSE) were modified, and two new categories (Work Environment and Quality) were developed and implemented. We plan to systematically incorporate WCM criteria into all the Best Practices until full integration is achieved.
Progress on implementation of the Best Practices is monitored via semi-annual assessments and scorecards detailing the status of implementation by each manufacturing facility. Bi-annual on-site assessments are also conducted to ensure that local management fully understands the Best Practices by.
Dealing with disaster in Gummidipoondi
An extreme example of our business continuity in action occurred at our facility in Gummidipoondi, India, in December 2016. The area, which is close to Chennai in Tamil Nadu state, was hit by Cyclone Vardah, a severe storm with winds reaching a peak of 135 km/h for six hours. The cyclone, which was the worst seen in the area in 25 years, flattened homes, snapped communication lines and damaged water and electricity supplies. Our facility was also affected; buildings shook, roofs fell and 1680 trees planted at our facility over 15 years were torn out of the ground.
Faced with these adverse conditions, our team reacted remarkably to ensure that our operations and shipments to customers continued unabated. This started by switching power supplies from electricity to steam, installing high capacity generators to keep operational water supplies running and maintain our high-quality standards.
With our product still in high demand, we needed to keep in close contact with our other facilities in India – with little communication and only one operating phone. Our team pooled together modems, converting the office boardroom into the center of operations and running our business from there, with workstations established for our Quality, Logistics and Warehouses departments. Our employees understood the situation and were fully supportive at all times, which enabled our success; they were supported with transport to and from distant locations, a 24-hour canteen and the swift removal of all fallen trees from access points to the facility.
The facility also provided remedial care to residents in nearby villages: after the cyclone had ended, we provided drinking water, food, and temporary medical camps, the latter benefitting more than 200 villagers. We supported other industries in the vicinity, supplying water to ensure that these industries could continue operating.
This situation continued for a week, until conditions were normalized. Despite its long and challenging duration, our team kept up a consistent supply of high quality carbon black to customers. This was only possible due to the commitment and dedication of our people and the preparedness of our unit.