tcs eru whitepaper business process improvement refinery

8/13/2019 Tcs ERU Whitepaper Business Process Improvement Refinery

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Business Process Improvement in Refinery

About the Author

Christopher Fonsecais the "ractice 'irector ( %il

& )as for Tata *onsultancy +ervices and is basedin ouston. *hristopher is a *hemical ngineer

from the #ndian #nstitute of Technology -##T andhas over /0 years of experience in the oil, gas and

chemical sectors. *hristopher has held responsiblepositions in leading companies such as 1nion

*arbide, +audi Aramco, 'eepak Fertilisers &"etrochemicals and rnst & 2oung prior to 3oining

T*+.

Seshasai Kandrakota is the "ractice ead (nergy Resource & 1tilities for Tata *onsultancy+ervices, based in #ndia and handles the merging

4arkets. +eshasai is a 4echanical ngineer and

has a "ost )raduate diploma in %perations4anagement. e has over 56 years of experience

in the oil, gas and petro chemical industries.+eshasai has held responsible positions in the

Refinery of Reliance #ndustries 7imited at3amnagar in #ndia, apart from handling %perations

& 4aintenance of 1tilities in the initial phase ofhis career, prior to $oining T*+ as a 7ead %il &

)as consultant.

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Contents

Introduction4

Case Study.4

Approach and Methodology..5

Tools used for such an Eercise..6

!indings and Recommendations..8

Performance Management..9

Alignment it! Balance" #corecar" $B#%& of 'ess Port Rea"ing Refinery.((Revision of )argets..((

*re+uency of Monitoring..((

Automation of t!e process e,ploiting functionalities of e,isting applications.((

-,ternal revie to ensure sustainaility(/

"PI #ashboard $ierarchy(/

)op )ier 0as!oar".(/

Mi""le )ier

0as!oar".(1

Bottom )ier 0as!oar"(4

Conclusion..(4

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Introduction

As t!e price of cru"e oil continues to remain !ig!2 3ort! American refineries are

increasingly focuse" on initiatives to protect t!eir margins. )!ey oul" lie to e

more fle,ile2 more responsive an" etter aligne" it! t!eir "ynamic usiness

an" supply c!ain nee"s. #o to manage refining operations in tune it! usiness

an" supply c!ain re+uirements2 refinery e,ecutives are ree,amining t!e

management of t!eir people2 t!eir usiness processes2 tec!nology an" proects.

)!ey are focusing on streamlining usiness processes2 motivating t!eir orforce2

integrating t!eir suite of applications for etter information flo an" increasing

visiility into performance.

In t!is article2 e s!all e emp!asi7ing some ey messages important to t!e

refining usiness2 "ra attention to interrelate" processes in refineries an" tae

you t!roug! a Business Process Improvement case stu"y. e ill s!are t!e

approac! an" met!o"ology2 proect planning2 t!e templates !ic! accelerate t!e

proect2 t!e solutions an" enefits. e ill conclu"e stressing measures t!at aretaen to a""ress t!e c!allenges of t!is usiness an" critical success factors t!at

must e in place to move to peration -,cellence. ne aspect t!at e ill

repeate"ly !ig!lig!t is performance management.

il : ;as consultants in )ata %onsultancy #ervices $)%#& !ave successfully

steere" many suc! consulting assignments in various refineries an" geograp!ies.

ne of suc! assignments carrie" out y our consultants is at t!e Port Rea"ing2

Refinery of 'ess %orporation locate" in 3e ? interest in t!e #t. %roi, refinery !ic! !as a capacity of 5>>2 >>> p".

)!e refinery serves t!e nee"s of 'ess retail outlets2 as ell as in"ustrial an"

resi"ential customers2 in t!e maor metropolitan area of 3e


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pro,imity to t!e 3e @or maret2 t!e facility is uni+uely positione" to respon" to

t!e sometimes rapi" c!anges in t!e gasoline maret.

)!e facility pro"uces some of t!e cleanest urning gasoline availale for t!e

environmentally sensitive 3ort!east marets. )!e emissions per arrel pro"uce"

are among t!e loest in t!e =nite" #tates.

)!e usiness nee"s of t!e refinery in to"ays c!allenging environment are

#treamline" operations it! minimal "isruptions an" less "eviationfrom plan

Better planning an" sc!e"uling Refinery operations insulate" from logistic inefficiencies resulting

from lig!tering at 3e @or !aror2 arge availaility an"movement2 narro ater ay2 "raft constraints2 ert! constraints2piping constraints2 t!ir" party usage of terminals ert!s an" tans

I"entify gaps 2 "etermine "egree of impact an" close t!e gaps

Performance management an" accountaility it! clearly "efine"orflos2 processes2 roles an" responsiilities

Performance -,cellence C streamline efforts in operations an"maintenance an" lay t!e foun"ation for continuous improvement

it! t!e oective of revieing2 grap!ically "epicting an" analy7ing t!e processes

an" to i"entify opportunities for efficiency an" effectiveness improvement2 t!e

refinery management !as outline" t!e folloing scope of or

0ocument t!e current processes an" met!o"ologies an" i"entifyopportunities to improve t!e supply c!ain processes eteen t!eRefinery an" #upply2 an" )ra"ing

Perform a ;ap Analysis an" suggest improvements for t!e i"entifie"gaps after mapping t!e )oBe processes

0efine DPIs for t!e refinery an" provi"e a lue print for

implementation of a Performance Management system

Approach and Methodology

)!e overall assignment as "ivi"e" into multiple stages eac! it! a

correspon"ing ey "ecision point. )!e stages ere as follos

%urrent Processes Mapping

aste I"entification

3e Processes Mapping

0efine DPIs Best use of availale applications at t!e refinery

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Provi"e a lue print for uil"ing a Performance Management

#ystem

)!e tass performe" "uring t!e entire proect inclu"e" t!e folloing

Proect #tartupCProect team intro"uctions an" orientationEestalis!ment of communications c!annelsE "etaile" planning ofsc!e"ules an" resource re+uirements2 finali7ation of "eliverale"efinitions

Process )argetingCI"entification of t!e suprocesses inclu"e" int!e scope of t!e processes in scope

3earterm Improvement $inclu"ing Fuic ins&CI"entification of

potential improvements an" alternatives to reali7e t!oseimprovements

%urrent #tate $;ap& AnalysisCReceipt of files2 "ocuments2 an" "atarelate" to e,isting processes in scope2 intervies it! ey 'esspersonnel familiar it! t!e processes2 "ocumentation of t!e currentstate

GisioningC0efinition of potential alternatives to t!e current stateprocesses

Improvement Portfolio an" Implementation #trategyC'ig! level listof improvements to processes an" "escription of approac!es to

implement c!anges to reali7e t!e improve" processes 3e Process 0efinitionC0ocumentation "escriing t!e propose"

improve" processes

0efinition of Dey Performance In"icatorsCMap t!e DPIs ot! forBusiness Activity Monitoring an" Performance Monitoring to t!eBalance" #core %ar"

Tools &sed

I0-*>2 Process *lo 0iagrams an" Hean #i, #igma ere t!e tools use" for

carrying out t!is e,ercise.

Integration 0efinition or *unction Mo"eling $I0-*& is a program "evelope" y t!e

=# Air *orce to "efine e,isting or ne systems an" is "irecte" toar"s increasing

manufacturing pro"uctivity. )!ere are a total of (6 I0-* met!o"s "evelope" for

mo"eling. I0-*> is use" for mo"eling t!e "ecisions2 actions an" activities of an

organi7ation or system. It i"entifies !at functions are performe"2 !at is nee"e"

to perform t!ose functions2 !at t!e current system "oes rig!t an" !at t!e

current system "oes rong.

A template of I0-*> Process Map is s!on elo

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30 August 2008

Hevel ( Process Map C Manage Business

3 90- )I)H- 3 9.Man age ' ess Port R ea"ing 9peratio ns A(A (

A(.>A(./

Plan : #c!e"ule

A(.>

A(.1

9perations

Plant : )erminal A(.>

A(.4

-conomics :

Management

Reporting

A(.>

A(.5

Provi"e Ha

#ervices

0aily 9perating InstructionsBlen" #!eet

Release Mgt Reports

*inal %rac4 #prea"

*inal Golume alancePerformance Reports

Provisional

%rac4 #prea"

P : H Report

Pro"uct : *ee"Fuality Information

;ov 3otifications2

%orporate;ui"elines

%ompliance %onfirmation

%orpo rate Plan

Aspen!C C

$averly' P M o d e l

! u e l sM a n a g e r

' I M S AspenA d v i s o r

Mont!ly Plan

P $ # (T C C S

A(.>

A(.(

#upply : )ra"ing

Mont!ly Plan0aily *ee"ac4

Mont!ly forecasts

#c!e"ule of (> "ays movements

Golume BalanceBuyJ#ell 0ecisions

Gessel Information

Prices form Platts

*ee"JBlen" Availaility

Pro"uct 0eman"

)rip 3umers

Revise" #c!e"ules

Revise" veral

Instructions

Pro"uct : *ee"

Fuality Inform ationAppr ove" Insp ection " ocs

Pro"uct : *ee"

0etails

P!ysical

#amples

)est Re+uests

)C Standards

)an4 ;auge )ic4etsPipeline )ic4ets

Pro"uct )ransfer 0ocuments#!ip 0ocuments

Pump Hog #!eets


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30 August 2008

many interdependencies e!ist across the categories o" supply chain management

!erth +cheduling!erth +cheduling

Signi"icant #ap $oderate #ap $inor #ap

Signi"icant

Impact

$oderate

Impact

%o&

Impact

4onthly "lanning4onthly "lanning

"roduction Accounting"roduction Accounting

'aily +cheduling'aily +cheduling

#ntegration of Apps.#ntegration of Apps.

"erformance 4gt.

Accountability

"erformance 4 gt.

Accountability

;aps C Impact Analysis

Figure ': Impact analysis template

*rom t!e ;aps C Impact Analysis t!e gap !ic! impacts t!e refinery process

improvement significantly is foun" to e Performance Management. At 'ess2 it is

oserve" t!at t!ere is a sustantial scope for improving t!e process failure

monitoring mec!anism. )%#2 !as "one a "etaile" analysis on t!e e,isting

Performance Management system an" suggeste" appropriate c!anges to t!e

system.

PerformanceManagement

Performance management in a refinery is a ey element. )!ere is a nee" to

"efine metrics !ic! ill trac operating efficiency2 capital e,pen"iture an" grot!

in t!e supply c!ain processes. )!e i"entification of ey measures an" t!e met!o"

for computing t!em is vital in uil"ing a roa"map for implementation of meticulous

Performance management system.

Refinery Performance Management Roa"map is illustrate" elo


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30 August 2008

Envisage ,eed for Performance ManagementEnvisage ,eed for Performance Management

#efine#efine "PI"PI--ss and Methodologyand Methodology

#efine Process and Templates#efine Process and Templates

.enerate #ata.enerate #ata

Collate and Start the Process ManuallyCollate and Start the Process Manually

Trac/ and Record 0uic/ 1insTrac/ and Record 0uic/ 1ins

2ustify Automation2ustify Automation

#efine Roadmap for Automation#efine Roadmap for Automation

Automate #ashboardAutomate #ashboard

#ashboard * Scorecard#ashboard * Scorecard

Milestone

Milestone

Milestone

Manage

Performance and

#ecision Support

Close gaps in systemClose gaps in system33 !ine tune source data!ine tune source data

+ut put of+ut put of

consultingconsulting

assignmentassignment

Process mapping4 .ap analysis4Process mapping4 .ap analysis4

Close gaps( Start the ProcessClose gaps( Start the Process

Internal resources or Eternal supportInternal resources or Eternal support

Business CaseBusiness Case33 InternalInternal

Tools Selection * Road mapTools Selection * Road map 33 EternalEternalconsultingconsulting

ImplementationImplementation 33 Eternal ResourcesEternal Resources

$andholding and +1nership$andholding and +1nership

Milestone

567 months567 months 8 months8 months 567 months567 months 9 months9 months

Performance Management C 2ourney to1ards Process Ecellence

Figure (: )oadmap template

)!e process aligning t!e oectives it! t!e alance" scorecar" ill enale a

Refinery to translate strategy into action t!roug! "efine" strategic oectives an"

ey performance measures. )!ese oectives an" measures provi"e a vie of t!e

refinerys performance from five perspectives

*inancial )!e strategy for refinery grot! an" profitaility t!roug!sustaine" grot!2 pro"uction optimi7ation an" management ofP-L

%ustomer Ac!ieve customer satisfaction an" collaoration to creategrot! opportunities

Internal processes Asset optimi7ation t!roug! improve" proectmanagement2 improve" reliaility an" operations e,cellence

-'# )!roug! improve" process safety management2 complianceit! regulatory re+uirements an" safety e,cellence

People %reate a motivate" an" prepare" orforce it!improvement of employee sills2 creating organi7ational "ept! an"ecoming a strategy focuse" organi7ation

In a""ition to usiness performance measurement2 t!e refinery also re+uire"

usiness activity monitoring for provision of near realtime access to critical

operational process in"icators. )!is ill "eliver alerts to increase efficiency of

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usiness processes an" monitor s!ifts of priorities an" conflicting goals eteen

t!e process units an" various refinery "epartments.

)!e goal of Performance Measurement is to lin t!e refinerys operational

activities it! t!e usiness strategy. 0efining t!e metrics to use is a ey aspect. If

t!ese are ell c!osen2 t!ey ecome appropriate measures of success of t!e

refinerys strategic oectives.

Alignment 1ith Balanced Scorecard :BSC; of $ess Port Reading Refinery

)!e oective as to mae sure t!at t!e goals2 metrics an" "ata collection are

"efine" accurately so t!at areas of t!e usiness t!at are necessary an"

appropriate to !at t!e refinery is trying to accomplis! are measure". )!e goal

as to utili7e "as!oar"s for "isplay an" analysis of DPIs to s!o t!e !ealt! of

eac! area of t!e refinerys operations2 gain ne insig!t into t!e usiness

processes an" improve efficiency an" performance.

Revision of Targets

In t!e est interest of refiners2 it is suggeste" t!at t!e targets e revisite" after a

year to revise t!e targets ase" on t!e performance "uring t!e year. )!ere ill

also e a nee" to a""2 sutract2 an" mo"ify some of t!e DPIs "uring revision.

!re0uency of Monitoring

)!e goal is to mae sure t!at in"ivi"uals are not overloa"e" it! information2 ut

t!at relevant an" sufficient DPIs are "elivere" on time so t!at action can +uicly

tae place !ere necessary.

Automation of the Process Eploiting !unctionalities of Eisting

Applications

)!e ne,t step is to automate t!e process of "ata collection2 aggregate an"

present t!ese for Performance Management. )!ere are several applications

availale !ic! can assist in t!is en"eavor. A u"icious c!oice ill !ave to e

ma"e taing into account t!e propose" I) arc!itecture an" !o t!e application

e,ploits t!e functionalities of -RP2 Process 'istorians2 Maintenance Planning an"

Management tools2 il accounting tools2 an" presentation layers to t!e ma,imum

e,tent.

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Eternal Revie1 to Ensure Sustainability

It is also suggeste" t!at "uring t!e initial stages for preparation of t!e

performance management DPI "as!oar"2 e,ternal resources coul" e utili7e" to

minimi7e time spent y process oners on putting toget!er t!e "as!oar" an"

score car".

"PI #ashboard $ierarchy

)o facilitate usiness activity monitoring an" performance monitoring2 )%#

propose" to !ave a t!reetier !ierarc!y in t!e DPI 0as!oar" it! t!e potential for

vieing tren"s an" grap!s.

)!e Perio" Performance2 !ic! ill e visile in all t!e t!ree tiers of t!e

"as!oar" at "ifferent levels of rea up2 ill also e supporte" y t!e Real time

Dey Process In"icators at t!e ottom tier. Along it! real time in"icators2 t!e

average or minma, of t!e Dey Process In"icators is also propose". )!is ill

assist every level to tae calculate" "ecisions on improving t!e performance of

refinery operations.

)!e t!ree tiers of DPIs are )op )ier2 Mi""le )ier an" Bottom )ier.

Top Tier #ashboard

)!is tier oul" give t!e overall refinery performance for t!e Refinery 'ea" an"

t!e top management of t!e refinery. )!is tier oul"2 at a glance2 give t!e entire

picture of t!e refinery it! regar" to t!e performance of t!e refinery an" contriute

toar"s taing firm an" information "riven "ecisions in improving t!e operations

of t!e refinery.

)!e DPIs mentione" in t!is "as!oar" are aligne" to t!e Balance" #core %ar"

oectives an" are segregate" un"er various focus areas C *inance2 %ustomer2

Internal Process $comprising Asset ptimi7ation an" -nvironment 'ealt! :

#afety&2 an" Hearning : ;rot!. )!is tier is roen "on to a summary level at

Mi""le )ier.

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30 August 2008

!I,A,CE

,+, E,ER.< =ARIAB'ES C+,S

$


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Bottom Tier #ashboard

)!is tier !as a "etaile" performance of every unit. )!ese ey performance an"

process in"icators2 at t!is level for every unit2 !elp t!e =nit 'ea"s2 #upervisors2

#!ift -ngineers2 *iel" -ngineer an" perators tae appropriate "ecisions y

vieing t!e performance of t!e unit.

)!e =nit 'ea" ill also e ale to get assistance on "eci"ing t!e root cause of

operational "eficiency at t!is level. )!is information ill e useful in assigning

reasons for t!e failure of operations.

Garious Dey Process In"icators of t!e respective units ill also e s!on along

it! t!e perio" performance un"er t!is analysis tier of t!e DPI "as!oar".

30 August 2008

!CC 3 Performance Indicators

$EA=< CAT ,AP$T$A

'I.$T CAT ,AP$T$A

,ET STEAM E?P+RT

C+"E B&R,

'I.$T C TAR.ET

+, TAR.ET

AB+=E TAR.ET

'C+ !'AS$

C&ST+#< TRA,S!ER +! +D

MAI, AIR B'+>ER +&TP&T

REACT+R TEMPERT&RE

@)0M)0)0In"icators

!CC 3 Process Indicators

R+! R=P

'C, R=P

REACT+R C


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Refinery employees nee" fitforpurpose tools to !elp t!em focus on !at is most

important in ac!ieving usiness oectives an" to create real value for customers2

stae!ol"ers an" t!emselves. )!ey also nee" to no !at is e,pecte" out of

t!em2 e traine" an" motivate" to perform t!eir tass2 an" un"erstan" an" agree

to !o t!eir efforts ill e measure".

)%# approac! an" met!o"ology relie" on t!e rigor of Hean #i, #igma t!e

enefits of lean management it! its "rive toar"s re"ucing cost an"

inefficiencies couple" it! #i, #igma focus on re"ucing process variation lea"s to

consi"erale improvement. *rom t!e overall consulting assignment it is evi"ent

t!at performance management aligne" it! alance" scorecar" is a ey element

in process improvement of t!e refineries. e "efine" metrics aligne" it! t!e

Balance" #corecar" to trac operating efficiency2 capital e,pen"iture an" grot!

in t!e supply c!ain processes.

)!e proect "elivere" significant value t!roug! integrating t!e planning processes2

sc!e"uling closer to t!e economic plan for fee"stocs an" len"stocs arrivals

an" pro"uct "ispatc!es2 improving t!e transparency an" communication eteen

t!e operational groups an" e,ploiting functionalities of t!e applications.

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About Tata Consultancy Services

Tata Consultancy Services is an IT services, business solutions and

outsourcing organization that delivers real results to global businesses,

ensuring a level of certainty no other firm can match. TCS offers a

consulting-led, integrated portfolio of IT and IT enabled services delivered

through its unique Global et!or" #elivery $odelT$

recognized as thebenchmar" of e%cellence in soft!are development.

& part of the Tata Group, India's largest industrial conglomerate, TCS has

over ()),))) of the !orld*s best trained IT consultants in +) countries. The

company generated consolidated revenues of S +. billion for fiscal year

ended /( $arch 0))1 and is listed on the ational Stoc" 2%change and

3ombay Stoc" 2%change in India.

4or more information, visit us at !!!.tcs.com.

Contact us

eru.pmotcs.com

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Consultancy Services 6imited 7TCS8. The content 5 information contained

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tcs eru whitepaper business process improvement refinery

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