Max­i­miz­ing Effi­cien­cy: Cost Reduc­tion and Increased Pro­duc­tion Out­put in Plant Operations

BACKGROUND

The PTA indus­try is a part of the chem­i­cal man­u­fac­tur­ing sec­tor that pro­duces Puri­fied Tereph­thal­ic Acid (PTA). PTA is used pri­mar­i­ly to pro­duce poly­ester, used to man­u­fac­ture tex­tile fibre, indus­tri­al fibre, bot­tles and films.

The indus­try is high­ly com­pet­i­tive, with sev­er­al glob­al play­ers oper­at­ing in the mar­ket, and is dri­ven by fac­tors such as price, qual­i­ty, prod­uct inno­va­tion, and cus­tomer service.

THE CHALLENGE

Our Client is part of a glob­al con­glom­er­ate and a lead­ing PTA sup­pli­er to the poly­ester indus­try in South­east Asia. To remain suc­cess­ful in this envi­ron­ment, it is essen­tial that the com­pa­ny’s oper­a­tions are pro­duc­tive and high­ly efficient.

The Client want­ed to opti­mise the Main­te­nance, Spare Part Store­house and Pro­duc­tion oper­a­tions. These areas are crit­i­cal to ensure that the plant keeps per­form­ing at opti­mum levels.

ANALYSIS

The focus was based around three core pil­lars of improvement:

1. Cost Reduc­tion – opti­mi­sa­tion of spare parts inven­to­ry and reduc­tion in con­trac­tor costs.
2. Main­te­nance Focus – increase in plan­ning accu­ra­cy, opti­mi­sa­tion of man­pow­er util­i­sa­tion and increase speed (veloc­i­ty) of execution.
3. Oper­a­tional Excel­lence – improved through­put from reduced pro­duc­tion loss­es and increased plant reliability.

PROJECT APPROACH & IMPLEMENTATION

The scope of the project revolved around 3 key areas of work across the com­pa­ny; Store­house, Main­te­nance and Production.

1. Store­house
   

   Ini­tial data analy­sis of his­tor­i­cal stock move­ment showed a ‘buy-to-consume’ trend. As pur­chase val­ue was very sim­i­lar to con­sump­tion val­ue year on year, core inven­to­ry vol­umes become stag­nant, and Write-Offs were used as the mech­a­nism for reduc­ing total inven­to­ry value.

   Two phys­i­cal stock counts were com­plet­ed to iden­ti­fy the cur­rent stock pro­file, which showed total inven­to­ry val­ue and stock-at-hand quan­ti­ties report­ed were inac­cu­rate. The gaps in the cur­rent con­trol mech­a­nisms had led to an unhealthy spare parts stock pro­file, with too much stock for items not need­ed and too lit­tle stock for items that are needed.

   This cre­at­ed the inher­ent risk of Plant reli­a­bil­i­ty issues and increased cost from expe­dit­ed spare parts.

   Achiev­ing trans­paren­cy across all inven­to­ry items was cru­cial to rec­on­cile the dif­fer­ences between phys­i­cal and report­ed stock lev­els. With this accom­plished, a write-up, write-off, and replen­ish­ment pro­gram was estab­lished in col­lab­o­ra­tion with the finance team to ensure opti­mal stock lev­els were main­tained in the appro­pri­ate locations.

   Once inven­to­ry lev­els had been rec­on­ciled, a new store­house man­age­ment con­trol sys­tem was put in place to ensure the inven­to­ry health pro­file could be opti­mised. With cor­rect Min/Max lev­els in place, excess stock was iden­ti­fied, and pur­chas­es auto­mat­i­cal­ly blocked to the val­ue of USD 2.1 mil­lion. This cost avoid­ance will con­tin­ue until the cor­rect reorder point is reached and a PO is triggered.

2. Main­te­nance
   

   At chem­i­cal plants, main­te­nance is crit­i­cal to ensure safe and effi­cient oper­a­tions. A main­te­nance pro­gram includes cor­rec­tive, pre­ven­tive, and pre­dic­tive mea­sures to min­i­mize equip­ment fail­ures and keep our process­es run­ning smooth­ly. How­ev­er, a poor ratio of cor­rec­tive to pre­ven­tive and pre­dic­tive main­te­nance can result in increased down­time, high­er main­te­nance costs, and safe­ty risks.

   Man­age­ment was con­cerned about the Main­te­nance area. Cost over­runs and the poor ratio of cor­rec­tive to pre­ven­tive and pre­dic­tive main­te­nance (58% vs 42%) meant over­all the main­te­nance area had become a seri­ous liability.

   The com­pa­ny was com­mit­ted to con­tin­u­ous­ly improv­ing its main­te­nance effi­cien­cy. To achieve this goal, we imple­ment­ed a new plan­ning and pro­duc­tiv­i­ty sys­tem that increased job trans­paren­cy for plan­ners, enabling super­vi­sors to spend more time per­form­ing Management-By-Walking-Around (MBWA) tasks in the plant.

   The new plan­ning and exe­cu­tion process is sup­port­ed by rel­e­vant and cas­cad­ed oper­a­tional KPIs, ensur­ing that dai­ly main­te­nance work is stream­lined and effec­tive. This improve­ment in dai­ly main­te­nance work has been extend­ed to Turn Around (TAR) prepa­ra­tion and exe­cu­tion, with a focus on man­ag­ing the crit­i­cal path, mea­sur­ing the veloc­i­ty of indi­vid­ual work orders, and orga­niz­ing mate­ri­als, equip­ment, and man­pow­er for each job.

   The dra­mat­ic improve­ments in Main­te­nance have result­ed in Plant Reli­a­bil­i­ty increas­ing from 90% to over 96%.

   “The project was suc­cess­ful, and I can con­firm that Renoir exceed­ed our expec­ta­tions. Over­all, we are extreme­ly pleased with the out­come in all areas. The Renoir team have fit­ted in very well, form­ing strong pro­fes­sion­al and per­son­al rela­tion­ships. I was most impressed by how they worked with us as an equal part­ner, which enabled the project to be such a suc­cess”
   
   Pres­i­dent & Director

3. Pro­duc­tion
   

   The improve­ments made to the Main­te­nance and Store­house process­es have result­ed in a more reli­able and effi­cient plat­form for the pro­duc­tion team to oper­ate the plant. These improve­ments have increased the vis­i­bil­i­ty and man­age­ment over the dai­ly activ­i­ties of the plant, allow­ing for bet­ter man­age­ment of equip­ment break­downs and inven­to­ry issues.

   As a result, the plant has become more effi­cient and is now able to pro­duce more out­put. By improv­ing the reli­a­bil­i­ty and effi­cien­cy of the plant, the pro­duc­tion team is bet­ter able to meet pro­duc­tion tar­gets and deliv­er con­sis­tent results.

   Since the imple­men­ta­tion of the project, the chem­i­cal plant has expe­ri­enced a reduc­tion in avail­abil­i­ty and per­for­mance loss­es com­pared to the base lev­el. This improve­ment can be attrib­uted to the con­sis­tent achieve­ment of almost 100% of avail­able load pro­duc­tion, a sig­nif­i­cant improve­ment over the base lev­el of 96%.

   The plant is being man­aged in a more con­trolled man­ner, result­ing in improved oper­at­ing per­for­mance. This increased con­sis­ten­cy in pro­duc­tion out­put indi­cates that the plant is oper­at­ing more effi­cient­ly and reli­ably, result­ing in a reduc­tion in down­time and per­for­mance losses.

RESULTS