By: Rachel K. Carson, MarCom Analyst for Process Industries
Albert Einstein once said, “Strive not to be of success, but rather to be of value.” Value is incredibly important because it accounts for a job well done. More value within a process means more quality, more productivity, and less overall loss. Within the oil and gas industry, refineries are all about maximizing value to ensure that all assets are functioning at full performance capability.
Minimizing “value leaks”
In order to maximize value, “value leaks” must be minimized. This is possible by varying drivers across the value chain. Within each sector, leaks can be minimized:
- Production – Maximize production and Reduce production cost
- Refining – Optimize feedstock cost, Maximize throughput and yields, Reduce operating costs, Improve uptime & reliability and Minimize blend giveaway
- Terminals & Distribution – Optimize allocation and Minimize distribution costs
Refineries operate within a dynamic environment. Through unified supply chain and operations execution management strategies, market opportunities require careful evaluation to better assess risk and benefits. Successful cross-functional decision requires collaboration, information sharing, “what-if” scenario analysis and data integration. It is more imperative than ever that refineries close the gaps and reduce opportunity losses.
The common focus is improving efficiency with limited investment
Focusing on supply chain and operational excellence means getting the maximum value generated from the installed asset base. Operational management can complicate matters when all incoming refinery-relevant information is converted into a set of instructions. The scheduling therefore, is dynamic, and can change at the drop of a coin. Import & export, mechanical plant availability, production problems, and changes in the economic environment will impact the schedule. Information can therefore easily get lost and operations can be out of sync with the schedule.
Traditional schedule communication is failure-prone with one-way information flow only, no structured feedback feasible, little to no post-mortem transparency, and a very limited chance for improvement. Data is therefore not created or lost hence to scheduling. Businesses can expect failures due to poor information flow when activities executed wrongly, with delay, or when ad-hoc schedule troubleshooting is required.
Tank farm management provides closed-loop business process for scheduling and operations
Supply chain and operations management, when combined, provides automatic synchronization between both business areas. Expected benefits include:
- Best scheduling instructions that impact oil movements
- Real time information on inventories, movements, and blends
- Feasibility checks on the movement schedule
- Updated schedule for operations
- Operations adjustments and actual performance from operations to scheduling
- Integrated feedback loop ensures information is shared between areas and across shifts
Unified supply chain and operations management is a full-functional, bi-directional interface between Supply Chain Management and Operations, ensuring alignment between Scheduling & Operations, structured on a two-way information flow. The interface becomes part of the unified solution, increasing overall value from upstream to midstream processes.
However, perhaps the most important piece of the Unified Supply Chain & Operations Management combination is closed-loop communication. Closed-loop information includes:
- Feedback on scheduling and operating instructions
- Information shared across shifts
- Continuous short-term schedule feasibility check
- Real-time process performance
- Ensuring operations are occurring as scheduled
- Clarifying the schedule matches reality
Ready to learn more? Watch our webcast
On June 20th, Joachim Boese outlined the importance of Scheduling & Operations in Value Realized by Closing the Gap between Scheduling and Operations webcast. He explains why closing the gap between Scheduling & Operations increases value and prevents future “value leaks.” Watch now.