Innovation & Customer Stewardship

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INNOVATION & CUSTOMER STEWARDSHIP

Challenges, Risks, and Impacts  

2023 was a year full of challenges and risks, including global geopolitical conflicts in various regions of the world, volatile global financial markets, a slowing down of the Chinese economy, etc. Consequently, these challenges contributed to uncertainties and posed risks to business growth. In response, Companies had to adapt and strengthen their business strategies to become more resilient. For Thaioil Group, the Company adopted a two-pronged approach, including adjusting and diversifying the Company’s investment portfolio to align with customer demands and enhance business diversification. In particular, the development of technology and the creation of "innovation", which are the Company’s Corporate Value, will become crucial elements in steering the Company through uncontrollable external risks and ensuring long-term sustainable business growth.

Furthermore, Thaioil Group places significant emphasis on innovating new products to respond to existing and new customers through efficient coordination among various functions. 

Commitments and Targets

In line with the innovation strategic development plan approved by the Board of Directors in 2022, Thaioil Group has determined to set a clear 2023 target for innovation, research and development, and high value product development. Employee awareness has been emphasized in order to place the importance of innovation through the promotion of an innovation culture. The Company has organized several brainstorming activities to stimulate creativity among employees and encourage them to innovate new working ideas to effectively respond to customers' evolving expectations and demands. In addition, the Company is committed to monitoring progress on a regular basis to ensure the achievement of overall objectives and deliver tangible benefits for the Company.

Targets

Thaioil Group is committed to becoming an innovation-driven company by elevating the Company’s innovation maturity assessment from level 3 to level 4 (out of 5 levels) by 2026. This target refers to initiating research to establish outstanding innovative products and services that create significant business impacts for the Company. This is a challenging target as it requires collaboration from all organizational functions to create innovations that are beneficial to existing and future customers. Hence, the Company has determined the strategic plan for each year to achieve the targets in 2026 with the details as follows: 

• 2022: The Company achieved an innovation maturity level at level 3 (out of 5 levels) and formulated a clear strategic development plan for innovation
• 2023: Emphasizing the development of corporate innovation culture and brainstorming activities to invent creative ideas that deliver organizational benefits
• 2024: Focusing on implementing creative ideas into practice to generate organizational benefits and reassess the Company’s innovation maturity level to track its development progress to become an innovation-driven company 
• 2025: Leveraging the results of the Company’s innovation maturity level assessment to develop, improve, and enhance employee capabilities to elevate the Company towards a higher level of innovation-driven company 
Indicator Unit Target 2026
Level of Innovation                           level         4 (out of 5 levels) 

Furthermore, Thaioil Group prioritizes customer satisfaction with both the Company’s products and services, starting from order reception and continuing throughout the management process to ensure that customers receive complete, accurate, and timely products. The Company proactively handles complaints and closely follows up to resolve the issue. Furthermore, the Company collaborates with customers to develop products to meet their specific needs. This enables the Company to adjust marketing strategies appropriately and grow alongside partners, building on our strong strategic partnership.

Indicators Unit    Target 2023     
Maintain Thaioil Group’s customer engagement score       Percentage      92

Management Approach and Performance

  • Innovation Management  
  • Management Approach  

In 2023, Thaioil Group defined Corporate Key Performance Indicators (Corporate KPI) on the innovation for the first time, which are categorized into five levels. Level 1 of the KPI focuses on employee awareness of the innovation culture, with a target of 75%. Levels 2 and 3 of the KPI focus on the number of new and practical ideas, with a target of 50 and 100 ideas, respectively. Levels 4 and 5 of the KPI focus on monetary benefits from the practical ideas, with a target of 50 and 100 million THB per year, respectively.

The Company’s innovation targets were then cascaded across all 35functions within the Company. Furthermore, brainstorming activities were organized for each function to collectively generate new ideas, with the most suitable ideas chosen for implementation for further organizational benefits.

Moreover, the Company consistently organized several activities to promote the corporate innovation culture (i-LEAD), arranged an award ceremony to honor employees who create outstanding innovations, and provided knowledge-sharing sessions on modern technology. These activities have all coemployees' awareness of the importance of innovation, in which all employees can actively participate.

  • Innovative Culture
  • Approach to build internal corporate innovative culture

Thaioil Group has continuously encouraged the employees to create innovations collectively and fostered continuous learning opportunities in the field of innovation. In 2023, the Company organized activities to enhance employees’ awareness on the importance of innovation as follows.

i-LEAD Project 

Since 2022, Thaioil Group's business strategy has focused on creating new innovations as a cornerstone to foster sustainable business growth. Hence, the Company places importance on "innovation" by prioritizing and driving the Company’s employees to develop creativity and invent new ideas and innovations to deliver value-added products and services in the future.

In 2023, the Company promoted the internal innovation culture through the “i-LEAD” behaviors. The behaviors are specified through a screening process by the employees’ representatives at all levels, from top management to functional managers and employees. The project aims to design behavior characters that reflect innovative creativity in daily work practices through communication and awareness-building to ensure that employees will understand, remember, and apply these behaviors in their daily work. The activities in this project are described below:

Activities with Top Management

  • Building Innovation Culture Awareness through Top Management Workshop (Management Outing Workshop)
  • Organized a workshop activity for top management to be the leading change makers. This aims to create Innovation Culture Awareness for employees in their line or function through the core behavior of "Lead to Innovation Culture." In addition, the workshop fosters them to exchange their experiences with external speakers on innovation creation, communication, and practices to apply the i-LEAD behavior as a role model.
  • CEO Townhall และ Management Meeting
  • rganized a communication activity to encourage communication between the CEO and all employees to emphasize the Company's direction, strategy, plans, and performance. This activity helps to ensure that employees understand and are aware of the top management's commitment to bring changes to the Company and all employees. In addition, the progress of the Innovation Culture Awareness project will be regularly reported in the Company’s top management meetings to stimulate them to foster an innovation culture among employees.

Activities with change agent in each function

  • Generating New Actionable Ideas through Change Agent SME Idea Facilitation & LO Inspirer Workshop
  • Organized a workshop activity to develop the change agent by choosing the representatives from selected functions. The groups of change agents will be developed with the full knowledge, skills, and tools, to facilitate them to create innovation culture and invent new ideas within their functions.

Building 360 Innovation Culture Awareness to Staff: Online & Offline

Organized a variety of activities, campaigns, and communications through the Company’s communication channels, such as email, LINE Official Account, E-learning modules, and roadshow events, etc. In addition, the Company organized the Corporate Innovation and Learning Day to promote and reward employees for their innovative ideas that added value to the Company.

Innovation Culture Mini-series: i-LEAD

E-Learning: LO x INNO Learning Challenge

Corporate Innovation and Learning Day

i-LEAD Roadshow

Enhancement of Innovation Knowledge for Employees

Thaioil Group encourages the employees to become quality innovators by raising awareness of the importance of innovation, providing knowledge enhancement for continuous development, and creating inspiration for innovation through the following activities:

TOP Innovation E-newsletter

 Organized a weekly E-newsletter, distributed to all Thaioil Group’s employees, to promote creativity, out-of-the-box thinking, and a growth mindset. This aims to cultivate the qualifications of quality innovators and raise awareness of the importance of innovation in today’s world. As a result, these activities have created good momentum and feedback for the Company. In 2023, the Company disseminated a total of 32 TOP Innovation E-newsletters with over 22,978 readers, which increased by 27% compared to the previous year. Meanwhile, the readers’ satisfaction score was at an excellent level (97 out of 100).

TOP BCG Updates

 Organized a monthly E-newsletter to raise awareness of the BCG model, a new economic model of the Thai government focusing on the three economic systems in Thailand, including the Bio Economy, the Circular Economy, and the Green Economy. The examples of contents involve electric vehicles, hydrogen energy, and other climate innovations, which have attracted overwhelming employee interest. In 2023, the overall satisfaction level was at an excellent level (97 out of 100), and each E-newsletter issue attracted over 785 readers, indicating a consistently positive response.

Innovation Talk

 Invited external speakers with expertise and knowledge in innovation, such as Mr. Jirayut Srupsrisopa (CEO of Bitkub) and Mr. Rawit Hanutsaha (CEO of Srichand), etc. In 2023, the Company organized four events. Employee participation increased by 35% compared to the previous year. Meanwhile, the satisfaction score increased from 91 to 93 out of 100.

2023 Thaioil Innovation Awards 

Thaioil Group has gathered innovative projects from employees who participated in the Thaioil Innovation Awards in the previous year. The innovative projects were then categorized into three subcategories, including Idea for Innovation, Prototypes, and Innovations. There were 295 innovation projects submitted for the competition, approximately three times more than the previous competition. In 2023, the Company established a committee to award the winners, with 49 projects receiving Thaioil Innovation Awards. At the same time, the Company organized the Thaioil Innovation and Learning Day 2023 event on September 11, 2023, where the Thaioil Innovation Awards were presented to outstanding innovative projects, serving as encouragement and inspiration for all innovators.

  

Approach to Build External Corporate Innovative Culture 

The collaboration between the research and development function of Thai Oil Public Company Limited and external agencies is considered as one of the key strategies to leverage the benefits of accessing advanced technologies that have been developed to the level that can be further implemented in the industry. This enables the Company to shorten lead time and complement each other’s strengths, which increases opportunities for project success, leading to the practical implementation or the creation of new businesses. Additionally, it develops and enhances the knowledge and capabilities of researchers in areas of their research-related topics.

In 2023, Thaioil Group continued to emphasize the importance of collaboration in research and development with the educational sector. Thaioil Group signed two important Memoranda of Understanding (MOU) with Chulalongkorn University. These include the 6th consecutive memorandum with the Petroleum and Petrochemical College and the memorandum to develop high value products with the Faculty of Pharmaceutical Sciences. These collaborations are the starting point for driving business transformation through research and development in a constructive manner.

Besides the collaboration with the educational and government sectors, Thaioil Group has expanded the partnership to develop new products with the research and development team of the private sector, including Kao Industrial (Thailand) Co., Ltd, under the co-development Emulsified Asphalts (EA) project. This product development integrates the strengths of Kao Industrial (Thailand) Co., Ltd, one of the biggest emulsifier producers in Thailand, and Thaioil Group, one of the biggest asphalt producers in Thailand. Consequently, the high-quality EA products have been successfully developed and received the certification of chemical and mechanical qualifications by the Department of Highways, meeting the specifications and high quality.

In 2023, the Company completed two important research projects. The first project is the conversion of ethylene and carbon dioxide into ethylene carbonate for use as a solvent in lithium-ion batteries. The research result has enabled Thaioil Group to achieve the target of increasing the efficiency and safety of ethylene carbonate production processes compared to current technologies. With the result of this research, Thaioil Group has recognized the opportunities to register the patent for the production process, which is currently in the process of being drafted for registration with the Department of Intellectual Property. Moreover, this project collaborates with the Vidyasirimedhi Institute of Science and Technology (VISTEC). The second project is the improvement of diesel fuel catalyst testing unit, which attempts to increase diesel testing capacity from EURO 4 to EURO 5 standards. This improvement of the testing unit was designed and implemented by researchers at Thaioil Group. Additionally, this project is under collaboration with the Petroleum and Petrochemical College (PPC) of Chulalongkorn University.

Product Innovation 

The development of new products, the enhancement of the value to existing products, or the development of high value products require the collaboration of research and development with internal and external partners. The activities involve brainstorming with the sales team to identify directions for new product development, brainstorming with the production team to improve manufacturing processes to produce the product with the qualification that meets market demands, partnering with educational institutions to explore technology and business trends for the benefit of new product development, as well as collaboration with research and development of the private sector to jointly develop products that genuinely respond to market demands. Examples of Thaioil Group's product innovation are as follows:

Heat Transfer Oil

This product innovation aims to develop high value products derived from the current product of LABIX Company Limited. The project enhances the qualification of heat transfer oils through research on the essential qualifications and methods to enhance its qualifications in collaboration with laboratories. The product qualification test result revealed that the product qualification's stability exhibited at high temperatures of up to 300 degrees Celsius and demonstrated a longer lifespan compared to other heat transfer oils available in the market. In 2023, Thaioil Group sold this heat transfer oil to customers and received 0.6 million THB.

Phase Change Material

 This product innovation aims to develop high value products derived from the current product of Thai Lube Base Public Company Limited through phase-change material. This material can transition from one state to another with a slight temperature variation. This project involves researching methods to enhance the qualification of slack wax into phase-change material. In 2023, the chemical, thermal, and physical qualifications of slack wax were tested and compared with the other commercial phase-change materials. These findings are utilized to develop Paraffin Wax of Thai Lube Base as a phase-change material for various applications, such as controlling or reducing the temperature of solar cells or batteries to enhance their efficiency, etc. 

Process Innovation 

Innovative processes can be classified into the development of production processes, operational processes, or product development processes. In 2023, Thaioil Group developed innovative processes in the field of product development by enhancing clarity and alignment with existing operational processes. This process has been certified by the Management System Certification Institute (MASCI) as it is aligned with current operational methods. The process emphasizes the cross-functional product development process of the functions related to high value product development. The team involves members from various related functions with the roles and responsibilities of each function clearly defined. Examples of relevant functions are the research and development, commercial, production, testing, and data research functions. Examples of Thaioil Group's process innovation are as follows:

Rubber Process Oil

 This process innovation aims to develop high value products derived from the current product of Thai Lube Base Public Company Limited through innovative process. The project adjusted the Rubber Process Oil (RPO) to reduce the Polycyclic Aromatic Hydrocarbons (PAH) in rubber oil to the amount specified by the customer. The key steps of this process include (1) Selecting suitable raw materials for RPO production, (2) Adjusting conditions in the production process to control the number of carcinogenic substances, and (3) Blending processes to produce Light Residual Aromatic Extract (LRAE) with qualification specified by customers. In 2023, Thaioil Group launched this rubber process oil product to customers, resulting in a net 1.17 million THB.

Crude Compatibility Prediction Model

This process innovation aims to develop the testing process of sedimentation in different crude recipes. The probability of sedimentation from the crude oil mixing can be predicted with approximately 90% accuracy. This prediction allows the Company to select appropriate crude oil as an input for the refinery and to reduce the chance of crude oils sedimentation at the heat exchanger in refining process. This process will not only save energy consumption, but also bring opportunities in using various types of crude oil. The Company can also lessen the dependence on technical guidance from external parties.

In 2023, the research and development function transferred operational processes of the project to the product testing function to test additional crude oil defined in the new crude oil list. Also, the testing procedures at the operational level were additionally improved.

RHCU Pilot Plant (Residue Hydrocracking)

 RHCU Pilot Plant is a manufacturing simulation model of the refining unit in the Clean Fuel Project (CFP). The manufacturing process was designed by Thaioil Group’s Research and Development function together with the technology owner company. The purpose of this project is to test and select crude oil recipes which are suitable for the refining process by considering different variants that are used in the RHCU process. The result of this project is used to plan the production process for maximum efficiency. The design of the RHCU Pilot Plant's operational process must align with the refining process and chemical reactions in the RHCU Pilot Plant. This requires 24-hour operation, with a team of researchers to test and control the refining results to ensure its accuracy. This project provides several benefits, such as reducing production costs from selecting appropriate and cheaper crude oil recipes or more efficient catalysts. This can save around 450 million THB per year. Moreover, it can prevent sedimentation risk of the product deviated from the refining process, which can cost approximately 2,000 million THB per incident. The construction and testing of the RHCU Pilot Plant are expected to be completed in the first quarter of 2024. 
  1. 2023 Performances

  • Customer Stewardship and Product Quality Management
  • Management Approach

Thaioil Group places great importance on customer stewardship, guided by the principle of “We care, We give, We leave no one behind (Sai Jai Prom Hai Mai Ting Kun)”. This principle applies to all aspects, including product reception, service, and various project implementations with customers to achieve mutual growth. Additionally, the Company emphasizes the quality and safety of products and services in accordance with laws, regulations, and international standards to prevent negative impacts on customers and society. This commitment aligns with sustainable organizational development criteria, focusing on three dimensions, namely Environment, Social, and Governance (ESG). Furthermore, the Company actively listens to customer feedback and takes prompt and efficient actions for improvements to meet evolving customer demands.

In 2023, Thaioil Group continued to implement the Partner for Life plan to support customer stewardship in three aspects as follows:

  • 1. Partner for Growth focuses on addressing customer pain points by promptly developing new products and services in alignment with customer expectations regarding product quality, service, and business engagement. In addition, there is a Voice of Customer (VOC) system that gathers feedback and suggestions from customers, which helps ensure the new product and service portfolios to support the expansion of production capacity of the Clean Fuel Project (CFP) in the future.
    2. Partner for Knowledge provides academic knowledge and supports knowledge sharing in various forms, encompassing technical and operational aspects, as well as commercial aspects. This covers updated information concerning market situations related to petroleum, petrochemicals, base lubricants, and other relevant products. Additionally, Thaioil Group offers a comprehensive E-product catalogue that enables customers to access a wider array of Thaioil Group products. 
    3. Partner for Service emphasizes continuous enhancement of the Customer Relations Management (CRM) practices, segmented into four aspects, as follows:
1. Operations aspect: Enhancing service efficiency and fostering continuous good customer relationships by standardizing product and service delivery throughout the Company, involving collaboration with all relevant functions such as commercial, quality, operations, logistics, accounting, support, digital, and customer relations management. This includes managing orders, ensuring accurate and timely product deliveries, handling complaints, and closely monitoring issue resolutions under the Service Level Agreement (SLA). Each function complies with standardized service level agreements, achieving a 100% compliance rate.
2. Analytic aspect: Continuing to enhance service efficiency and customer relations by proactively listening to opinions or suggestions from customers through the Voice of Customer (VOC) system and customer satisfaction and engagement surveys. This information is utilized to enhance and develop continuous service delivery and foster ongoing good customer relations.
3. Collaboration aspect: Providing knowledge sharing about the Company’s high value products, such as a new "Heat Transfer Oil (HTO)” product, concerning details about its characteristics and types of the product as well as the applications across various related industries that align with the Company’s potential customers, Notably, the Company already has transactions with this customer group. Furthermore, the Company has opened a pipeline transportation service to the Khon Kaen Oil Depot, a new oil depot in the Northeastern region. The pipeline connects the Saraburi Oil Depot to the Khon Kaen Oil Depot, reducing carbon dioxide emissions from the transportation process, thereby supporting the goal of achieving Net Zero GHG Emissions and promoting sustainable business growth in tandem with environmental preservation and social care.
4. Customer Data Platform aspect: Leveraging an international standard platform for storing fundamental customer data, intending for utilization in fostering and strengthening relationships with customers.

 

Highlighted Projects

In 2023, Thaioil Group conducted the “We care, We give, We leave no one behind (Sai Jai Prom Hai Mai Ting Kun)” project to maintain good relationships with customers, including:

Organizing activities to promote culture and volunteerism through the "You initiate, we fulfill" project, in the form of social engagement activities, TEAM SPIRIT, with customers (CRM and CSR Integration Activity).
Organizing 2023 "Happy Hours" activities for drivers to ensure safety during product pickups for the customer groups working at fuel stations, transport coordinators, ticket room staff, and other related units.
Organizing activities for providing knowledge to customers both online and on-site with various topics such as Fundamental of the Refinery Process and Business Overview and Refinery Overview. This aims to enhance customers’ knowledge and understanding of the oil refinery industry.

2023 Performances 

Through Thaioil Groups comprehensive operations encompassing both product manufacturing and service delivery the Company has achieved a higher level of customer engagement that surpasses the predetermined targets

Update : February 2024