Tcs ERU Whitepaper Business Process Improvement Refinery
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Transcript of 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
0
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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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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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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
5=
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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.
5/
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30 August 2008
!I,A,CE
,+, E,ER.< =ARIAB'ES C+,S
$
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Business Process Improvement in Refinery
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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Business Process Improvement in Refinery
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
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outsourcing organization that delivers real results to global businesses,
ensuring a level of certainty no other firm can match. TCS offers a
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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.
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