At a Glance
- A fuel refinery wanted to reduce its operating costs and increase throughput throughout the refinery.
- Renoir was engaged to carry out an analysis to assess efficiency and cost savings measures to deliver hard dollar cost reductions through improved control and execution.
- All initiatives focused on the maintenance and the supply chain.
Key results
Labour savings of
$5.6 mil
Reduction in maintenance supply chain costs of
$1.3 mil
Total annualised benefits of
$6.9 mil
Continuous improvement in organisational control and root cause analysis
Background
Our client is a refinery that has played a critical role in the development and success of the industrial economy of the country in which it operates. The refinery was one of the largest fuel refineries in the country, providing thousands of jobs for local people in both construction and operations.
The facility had the capacity to produce about 140,000 barrels of petroleum products for the domestic and international markets. At the time of the project, our client wanted to reduce operating costs and increase throughput throughout the refinery.
Analysis
The client engaged Renoir Consulting to carry out an analysis to assess efficiency and cost saving measures that could be pursued. Following the analysis, a process improvement project was launched using the Renoir Focus Process® to work with department managers to evaluate areas of opportunity and identify targets across the business.
Project Approach
The project began with the creation of a team consisting of Renoir consultants, supported by staff from the client’s office, who, after training, worked as an integral and vital part of the process. The team’s initial focus was on identifying opportunities, assessing cost saving measures, and achieving targets.
Management Action Teams (MATs), led by department managers, were also established in key areas. Each MAT included a cross-functional team of operational management and employees, as well as Renoir and task force members.
Preventive maintenance compliance soars with new way of working
Paper mill cuts material loss by 300% with maintenance planning
Preventive maintenance compliance soars with new way of working
Paper mill cuts material loss by 300% with maintenance planning
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Implementation
The cross-functional teams were tasked with delivering hard dollar cost reductions through improved control and execution. The initiatives were focused on the maintenance and the supply chain.
Maintenance: A rigorous management control system was put in place to address issues causing inefficiencies in day-to-day execution and completion of work.
Supply chain management: Initiatives were focused on the compliance with procurement policies and procedures, rationalisation of vendors and contract owners, and a review of working capital tied up in storeroom inventory.
“Due to the collaborative approach adopted by Renoir, I am happy to say that the project has been a considerable success and has delivered sustainable improvements across the maintenance division.”
– Business Unit Leader
Results
Maintenance
A major change has been made to the work order processes within the system, allowing maintenance planners to focus more on planning and scheduling. A ‘small jobs’ concept was introduced which reduced the number of work orders requiring the full work pack programme, giving planners the time to better plan for larger jobs.
The formalisation of routine interval control ensured that supervisors and managers at all levels carried out regular, targeted monitoring of assigned work. They also reported their findings to facilitate effective root cause analysis.
At the end of the Pit Stop and Day in the Life studies, we found that the average total time lost by maintenance teams across a range of activities had been reduced from 46% to 21%.
Supply Chain Management
Improved systems and processes have been developed to provide greater visibility and control over the way money is spent on maintenance activities. An overtime authorisation process was introduced, and invoice processes were streamlined. Other changes implemented included contractor key performance indicators and a monthly contractor scorecard.
*We have intentionally omitted client-specific details to maintain strict confidentiality.
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