Lean Capital Execution and Tank Management: Cutting OPEX/CAPEX Through Workflow Discipline

Client Context

• A 200 Mbpd (thousand barrels per day) refinery and related midstream operation had problems with their tank management program with extended out of service times impacting refinery production rates and high OPEX and CAPEX requirements.

Key Challenges

• Planning and scheduling tank inspection issues​
• Cleaning and repair quality issues with frequent repeat work situations​
• Issues with bidding contractor work with excess costs ​
• Issues with tracking of work on time and accountability of contractors (frequent cost overruns and schedule extensions)​
• Lack of proper planning with contractors creating a number of EHS risks in the field​
• Contractors complaints of lack of communication or schedule changes impacting their work​

Approach & Key Success Factors

• Implemented our Lean Capital and Tank Management Program ​

  1. Implemented nested core group of contractors​
  2. Dedicated a full-time tank planner/project controls resource​
  3. Developed a daily 20-minute huddle and contractor command center with visual management​
  4. Implemented execution lanes that ensured that there were always 3 tanks being worked on at any time with sequential immediate response​
  5. Ensured tank readiness (2 to 3) to start work with operations prioritization and commitment​
  6. By doing direct observations in the field, Identified “Non Value Added Work” of contractors and over staffing in the field. Reduced FTE’s by 55 contractors​
  7. Identified and eliminated over 35 workflow barriers​
  8. Implemented Leader Walks to establish right management behaviors to continue to find contractor performance gaps and sustain improvements​

Results

18%

Contractor labor reduction​

100% 

Tank schedule compliance​

40%

Tank workflow time reduction​

25%

Tank out of service time​

$8M

Estimated annual value impact of improvements