14 Aug Material Variance Analytics in Oil & Gas Turnaround Process Project delivery for a Leading US Refinery
The world today is more dependent on oil than ever before. Oil Refineries world over take crude oil and refine it into gasoline, diesel, and other petroleum products. However, Refinery operations are regularly shut down in a planned manner so that preventive maintenance, renovations, or upgrades can be performed. This planned shutdown, called Turnaround, allow the Refineries to ensure safe operations, stay competitive, and meet government regulations. However, each Turnaround project requires extensive planning and careful coordination of labour and materials. Most often, the shutdown happens when demand for oil is at the lowest level, and the required labour and the materials required to carry out the Turnaround operations is readily available.
In this backdrop, a major Refinery in US, which has a throughput capacity of 170,000 BPD and a Nelson Complexity rating of 8.5 had material variance challenges in their Turnaround operations. The Refinery wanted to ensure the availability of all required materials before the turnaround operations begins. Non-availability of materials during Turnaround operations will have a huge impact on resuming the Refinery operations on time. The Management team at the Refinery reached out to Grihasoft to perform Material Variance Analytics (MVA), given Grihasoft’s extensive experience in the Supply chain Analytics in the Oil and Gas domain.
The goal of the MVA project for the turnaround process was to compare the availability of engineering BOM (Bill of Material) and MTO (Material Take Off) items to the materials listed in the purchase requisition and engineering documents. Specifically, this involved ensuring that all the materials required by Turnaround Engineering team is either is in stock or procured by EPC (Engineering, Procurement, and Construction) Contractors. The project was further complicated as the refinery had multiple EPC contractors and diverse IT systems. The MVA project delivery included extracting the pertinent engineering specifications from the engineering drawings, Purchase Requisitions, Purchase Orders and Delivery documents to identify the right materials and comparing the lead times and quantities from both the stocked items and items procured by EPC contractors.
The MVA project was completed in 6 weeks using Grihasoft’s Oil & Gas industry experience and proprietary IT tools & Data Analytics technologies. The project reported that over 95% of the items procured in the turnaround process had non-compliance to the Refinery’s procurement policies and engineering specifications. These insights resulted in significant $ savings and improvements in the engineering specification process for the Refinery.