Turn­ing Chal­lenges into $25M Sav­ings: Effi­cien­cy Gains in a Nat­ur­al Gas Plant

INTRODUCTION

Improv­ing the effi­cien­cy of any plant is a strate­gic move that could sig­nif­i­cant­ly enhance your com­pa­ny’s prof­itabil­i­ty and mar­ket com­pet­i­tive­ness. Effi­cien­cy means opti­mal resource util­i­sa­tion, lead­ing to high­er pro­duc­tion per unit of raw mate­r­i­al, thus low­er­ing oper­a­tional costs and boost­ing margins.

These effi­cien­cy gains could be key to main­tain­ing prof­itabil­i­ty. More­over, improved oper­a­tional effi­cien­cy may result in increased equip­ment lifes­pan and reduced down­time, offer­ing addi­tion­al cost-saving oppor­tu­ni­ties and help­ing ensure pre­dictable out­put levels.

THE CHALLENGE

The Client is run­ning a plant that uses lig­nite coal to make syn­thet­ic nat­ur­al gas. The syn­thet­ic nat­ur­al gas is piped to sup­ply homes and busi­ness­es in the east­ern part of the Unit­ed States.

They recog­nised that the price of syn­thet­ic nat­ur­al gas (SNG) could not exceed a cer­tain price if the plant was to remain com­pet­i­tive. They com­mis­sioned Renoir to assess their ener­gy con­sump­tion and pro­duc­tion process­es to iden­ti­fy & quan­ti­fy oppor­tu­ni­ties to reduce costs.

ANALYSIS

The detailed study revealed sev­er­al areas for improvement:

1. Reduc­tion of ener­gy consumption.
2. Increase in SNG pro­duc­tion con­sis­ten­cy and run rate.
3. Increase in co-product recovery.
4. Increase in main­te­nance efficiency.
5. Improved coor­di­na­tion between Oper­a­tions and Maintenance.
6. Improved coor­di­na­tion between Mar­ket­ing and the plant.

PROJECT APPROACH

The Effi­cien­cy Improve­ment Project con­sist­ed of two phas­es, each of 35 cal­en­dar weeks, designed to deliv­er two imple­ment­ed objectives:

1. A sig­nif­i­cant change in employ­ees’ and management’s aware­ness of the busi­ness dri­vers (cost and prof­itabil­i­ty) and the decision-making process­es, nec­es­sary to achieve the tar­get­ed price goal.
2. A tar­get­ed $13.5 mil­lion in sus­tain­able sav­ings annually.

The Project Team con­sist­ed of a ded­i­cat­ed Renoir Project Team along with a Task Force of 5 peo­ple allo­cat­ed full time to the project. A Steer­ing Group con­sist­ing of the Senior Plant Man­age­ment was formed to dri­ve the project; 6 Man­age­ment Action Teams (MATs) were cre­at­ed of employ­ees and Renoir consultants.

The MAT’s focus was to gen­er­ate ideas for improve­ments, eval­u­ate these ideas for suit­abil­i­ty and eco­nom­ic via­bil­i­ty, and dri­ve the instal­la­tion of the approved ideas. Both the Task force and the MAT mem­bers received exten­sive train­ing and con­tin­u­ous devel­op­ment guid­ance through­out the project to pre­pare them to become key change agents for the organisation.

Dur­ing the first weeks of the project, the teams revis­it­ed the areas iden­ti­fied for improve­ment dur­ing the assess­ment, thus ensur­ing buy-in and own­er­ship of the improve­ments. New ideas were also gen­er­at­ed and exam­ined by each MAT. Each MAT’s activ­i­ties were planned and scheduled.

IMPLEMENTATION

Oper­a­tions: The Oper­a­tions MAT con­cen­trat­ed their efforts on improv­ing through­put by elim­i­nat­ing con­straints. This was achieved by intro­duc­ing an Oper­at­ing Sys­tem which con­sist­ed of dai­ly, week­ly and month­ly tar­gets, man­u­al mon­i­tor­ing sys­tems and action­able vari­ance reports.

Each ele­ment of this Oper­at­ing Sys­tem was designed and intro­duced using a con­sul­ta­tive process which ensured own­er­ship and sustainability.

Ener­gy: The Ener­gy MAT focused on gen­er­at­ing ideas for reduc­ing ener­gy con­sump­tion across the plant which were eval­u­at­ed for via­bil­i­ty and scored accord­ing to the invest­ment required to imple­ment them. The approved ideas were then imple­ment­ed and mon­i­tored to eval­u­ate the results achieved. The reduc­tion in over­all elec­tric­i­ty con­sump­tion great­ly exceed­ed ini­tial expec­ta­tions and were 100% sus­tain­able. The ideas scor­ing and eval­u­a­tion sys­tems were adopt­ed by the organ­i­sa­tion as their accept­ed method­ol­o­gy for all ener­gy sav­ing ideas. 

“ While the val­ue achieved dur­ing this high­ly suc­cess­ful process is enough to strong­ly rec­om­mend the Renoir team, it is the gains that are being devel­oped through the process­es estab­lished that con­tin­ue to add val­ue after Renoir that is most exciting.”

Sr. Vice Pres­i­dent & COO

Main­te­nance: Improve­ments in Main­te­nance were achieved through detailed research of each Main­te­nance require­ment and then deter­min­ing the most effec­tive resource to car­ry it out. Often this meant mov­ing it away from Main­te­nance into Oper­a­tions. This stream­lined main­te­nance plan­ning and great­ly reduced times to achieve stan­dard non-skilled tasks, enabling main­te­nance staff more time to car­ry out work cur­rent­ly being done by con­trac­tors. The Main­te­nance MAT, using new sys­tems, tracked, mea­sured and eval­u­at­ed vol­ume and val­ue of trans­ferred work against the amount of reduc­tion in the con­tract­ed services.

Train­ing: Ear­ly in the project the Train­ing MAT com­plet­ed a Train­ing Needs Analy­sis (TNA) to iden­ti­fy defi­cien­cies and gaps in the train­ing and devel­op­ment of the man­age­r­i­al staff. A key learn­ing was the rev­e­la­tion that they excelled at react­ing to events rather than antic­i­pat­ing and pre­vent­ing them.

Renoir devel­oped a tai­lored Man­age­ment Train­ing Pro­gram, address­ing this and oth­er issues iden­ti­fied. Through­out the project over 200 peo­ple were trained.

Eval­u­a­tions process: An Eval­u­a­tions MAT estab­lished an his­tor­i­cal base against which all improve­ments were mea­sured to show exact finan­cial ben­e­fits. This trans­par­ent approach con­vinced the most hard­ened scep­tics that the ben­e­fits were “real” and prov­able. The Eval­u­a­tions process also gave a “hard” edge and a con­sis­tent and accu­rate method­ol­o­gy so that all projects could be cor­rect­ly evaluated.

Week­ly Steer­ing Group Meet­ings: These were held to ensure that the project remained on track and achieved the stat­ed objec­tives in accor­dance with the detailed Project plan pub­lished at the out­set, and all changes and sys­tem ele­ments involved the stake­hold­ers to ensure a high lev­el of own­er­ship and sus­tain­abil­i­ty that led to a con­trolled cul­ture change.

Facil­i­ty Plan­ning: A Facil­i­ty Plan was devel­oped sup­port­ed by new sys­tems, which brought the plant and mar­ket­ing togeth­er and extend­ed con­trol to all the depart­ments. It cre­at­ed a com­mon goal and road map of how the goal was to be attained

KEY RESULTS