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Impact of Business Analytics on Supply Performance: A Caribbean Perspective Inter-American Supply Chain Forum March 15-16, 2012 Presenter : Mushtaq Mohammed Manufacturing Director Methanex Trinidad Limited
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Supply Chain in the Hydrocarbon Industry - Upsteam & Downstream The industry is characterized by the following: High capital investment Access to hydrocarbon resources base Access to technical services Highly trained staff Access to supply chain for materials
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Typical Strategy for Businesses in the Primary Manufacturing Petrochemical Industry The business is mainly a commodity business and the strategies are driven by the following: Personnel & Process Safety Operational Excellence Low Cost
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Satisfying the global market Reduction in re-active workload Lower safety risks Higher energy efficiency Increased share value
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How can Reliability create a successful business ? People Reliability Work Process Reliability Equipment Reliability Site Reliability
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Maximize Production… Optimal Cost + Sustaining Capacity Effective Turnaround Management Effective Maintenance Programs New Technologies Effective Turnaround Management Effective Maintenance Programs New Technologies Leading/Lagging Indicators, Training, Prioritization and Work Processes to lower operating cost On-Stream Energy Efficiency Driven Process Optimization
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The Reliability Strategic focus areas were summarized into three major areas for development: People: — Resourcing — Leadership: Performance Management & Alignment — Competence of Workforce Processes: — Work Safety Controls — CMMS (Computerized Maintenance Management System) — Quality Document Management — Business/Work Planning — Root Cause Analysis — Prioritization — Performance Metrics Plant: — Relationship with Suppliers — PM Optimization — Plant Monitoring — Asset Integrity — Equipment History & Analysis
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The Role of Supply Chain in Reliability Many companies have centralized maintenance management systems, these systems do the following: Act as a backbone by connecting and integrating Work Planning, Inventory, Finance, Purchasing and the Asset Procurement activity is driven by outputs from this system The configuration of these systems to give real time information and provide data for forecasting material and spares needs link directly to reliability and business strategy
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ASSET & LOCATION MANAGEMENT WORK MANAGEMENT PURCHASING INVENTORY MANAGEMENT FINANCE CMMS
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Valve – (12 hour delay) 1. How many times has this valve failed before? 3 times 2. Was there re-work in the last repair? Before the failure, the valve was sent to a contractor during the Outage for servicing 3. What is the status of the replacement valve? Under procurement (4-6 Months) 4. Were the materials to repair the valve available? Spring had to be sourced from external company (No Inventory) IMPACT I8 hours of the downtime that could have been prevented with the correct focus on inventory & procurement reliability 0.6 % of 97.5 % reliability eroded 1,800 T production loss Profit of US $180,000
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Typical industry scorecard without supply chain metrics
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Reactive Inventory Management Procurement & Inventory cost triple Incur Production Losses (Reducing Income) Geographic Location (long lead time) Unable to meet customers expectation (Contracts) Proactive Inventory Management Reduce production down time Increase plant reliability Decrease high inventory costing Ensure availability of critical spares
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JAN 11 - JUN Include supply chain performance metrics into reliability score cards Create a culture where technical persons view supply performance as important in achieving their objectives Design the information feed from the backbone system to facilitate proper forecasting Demonstrate the impact of supply chain performance on the company’s commercial delivery
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