LEAN SIX SIGMA IN A PETROLEUM REFINERY - A CASE STUDY NAVEEN NARAYANAN SSA BUSINESS SOLUTIONS (P) LTD. SEPTEMBER 24TH, 201...
INDUSTRY CHALLENGES <ul><li>State regulated  product pricing  </li></ul><ul><li>Cumulated losses of  ₹ 78000 crores  in FY...
NEED OF THE HOUR PEOPLE ENROLLMENT EVERYONE COMMITTED & INVOLVED | PROACTIVE PROBLEM SOLVING PROCESS EXCELLENCE CONTINUAL ...
CI INITIATIVES Strategic Alignment? Bottom-line focus? Sustainable? | | 7 QC Tools Quality Circles Suggestion Scheme 5 ‘ S...
WHY LEAN SIX SIGMA? <ul><li>Engagement  across the organization </li></ul><ul><li>Analytical  approach </li></ul><ul><li>A...
LSS DEPLOYMENT ROADMAP HOW  ‘ PINNACLE ’  REFINERY EMBRACED LSS
ROLL-OUT MODEL PILOT PHASE SCALE UP PHASE SUSTAIN PHASE PILOT WAVE (6 MONTHS) <ul><li>PROJECT REPOSITORY </li></ul><ul><li...
DEPLOYMENT ROADMAP Piloting Wave 2 Scale up Training <ul><li>Executive Overview (Leadership) </li></ul><ul><li>Champions t...
PROJECT SELECTION HOW  ‘ PINNACLE ’  IDENTIFIED STRATEGIC PROJECTS
PROJECT SELECTION <ul><li>Top-down  approach </li></ul><ul><li>Leadership  Involvement  </li></ul><ul><li>Balanced  focus ...
TOP DOWN APPROACH MISSION:   “ A Great Place to Work ” VISION: “ Role Model for Environmental, Health, & Safety Performanc...
REFINERY VISION: ROLE MODEL FOR EHS | CONSISTENTLY MOST PROFITABLE AND RELIABLE REFINERY | MARKET RESPONSIVE ENVIRONMENT &...
PROJECT SELECTION RATIONALE <ul><li>Organizational Impact </li></ul><ul><li>Clarity of  Scope </li></ul><ul><li>Feasibilit...
SAMPLE PROJECTS Project Goal Metric Baseline Goal Optimize Product Yield for VD, and VGO from VDU Column % Wt. on crude 2....
PROJECT HOPPER <ul><li>Align LSS with  annual strategy planning/Balanced Scorecard </li></ul><ul><li>Monthly steering comm...
COMMON PITFALLS AVOIDED Web <ul><li>(1) Hype </li></ul><ul><li>Piloting </li></ul><ul><li>Avoided Big-Bang rollout </li></...
SUCCESS FACTORS <ul><li>Involvement of Sponsors at all stages </li></ul><ul><li>Meticulous project selection  process </li...
ENHANCED CUSTOMER SATISFACTION:  SEVERAL PROJECTS LINKED WITH CUSTOMER EXPERIENCE & LOYALTY PROCESS IMPROVEMENT:  BREAKTHR...
CASE STUDY 1: VDU COLUMN YIELD IMPROVEMENT
PROCESS SCHEMATIC
PROJECT CHARTER
PROCESS TREND LOW VD YIELD - AVG. 2.63% V/S TARGET 4%
-VE Cpk VALUES INDICATE EXTREMELY POOR PERFORMANCE PROCESS CAPABILITY
PROCESS FMEA
POTENTIAL CAUSES X1 X2 X3 X4 X5 Y
REGRESSION VDIR/RCO V/S YIELD HVGOCR V/S YIELD LVGOCR/RCO V/S YIELD RTC 293 V/S YIELD
DRAMATIC IMPROVEMENT IN VD YILED - AVERAGE YIELD OF 4.5% BREAKTHROUGH RESULTS
CASE STUDY 2: REDUCTION IN GATE ENTRY TIME
BUSINESS CASE <ul><li>Project Title:   Reduction in process time for Gate Entry Operation for visitors </li></ul><ul><li>P...
AS-IS PROCESS
ROOT CAUSES Problem Root Cause Solution Too much waiting for Visitors at early morning, lunch time & end of the shift No m...
SOLUTION IMPLEMENTATION Phase I: Implemented Solutions One window will be operational all the time <ul><li>System-generate...
IMPROVED PROCESS
Gate Entry Processing time reduced from Avg.15 mins to Avg. 4 mins BEFORE/AFTER
ABOUT SSA
PURPOSE & VISION Purpose: To enhance Stakeholder ’ s Value through partnering for growth; our journey will continue as lon...
HISTORY 1999 SSA IS BORN <ul><li>BORN WITH A MISSIONARY ZEAL </li></ul><ul><li>VISION:  ‘ MAKE MADE IN INDIA SYNONYMOUS TO...
ACCREDITATIONS RATED SE-2A BY CRISIL |   HIGH PERFORMANCE CAPABILITY HIGH FINANCIAL STRENGTH ISO 9001 CERTIFIED ANSI IACET...
SELECT CLIENTELE HIGH PERFORMANCE CAPABILITY | HIGH FINANCIAL STRENGTH
GLOBAL REACH HIGH PERFORMANCE CAPABILITY | HIGH FINANCIAL STRENGTH
BASKET OF OFFERING HIGH PERFORMANCE CAPABILITY | HIGH FINANCIAL STRENGTH Lean Six Sigma Lean Management BPMS Solutions TPM...
SSA ’ S ISM MODEL “ ISM ®  aligns people and the processes with the corporate objectives and goals ” - NC HIGH PERFORMANCE...
QUESTIONS?! HIGH PERFORMANCE CAPABILITY | HIGH FINANCIAL STRENGTH
Naveen Narayanan Glendale, AZ, December 8 th , 2010
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Strategic Project Selection in Oil &amp; Gas Industry

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How Pinnacle refinery (name changed) went about strategic project (Lean Six Sigma) selection and deployment

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Strategic Project Selection in Oil &amp; Gas Industry

  1. 1. LEAN SIX SIGMA IN A PETROLEUM REFINERY - A CASE STUDY NAVEEN NARAYANAN SSA BUSINESS SOLUTIONS (P) LTD. SEPTEMBER 24TH, 2011 PRESENTED TO:
  2. 2. INDUSTRY CHALLENGES <ul><li>State regulated product pricing </li></ul><ul><li>Cumulated losses of ₹ 78000 crores in FY 2010-2011* </li></ul><ul><li>Capital intensive & high operating cost </li></ul><ul><li>Huge profit leakages due to process inefficiencies </li></ul>*SOURCE: BUSINESS STANDARD, MAY 2011
  3. 3. NEED OF THE HOUR PEOPLE ENROLLMENT EVERYONE COMMITTED & INVOLVED | PROACTIVE PROBLEM SOLVING PROCESS EXCELLENCE CONTINUAL IMPROVEMENT | FACT BASED MANAGEMENT WASTE ELIMINATION REDUCE PROFIT LEAKAGE | ENHANCE EFFICIENCY OPERATIONAL EFFICIENCY REDUCE COST | IMPROVE EFFICIENCY NEED OF THE HOUR
  4. 4. CI INITIATIVES Strategic Alignment? Bottom-line focus? Sustainable? | | 7 QC Tools Quality Circles Suggestion Scheme 5 ‘ S ’ Daily Work Management TPM
  5. 5. WHY LEAN SIX SIGMA? <ul><li>Engagement across the organization </li></ul><ul><li>Analytical approach </li></ul><ul><li>Align-able with strategy planning </li></ul><ul><li>Focus on operational efficiency </li></ul><ul><li>Capability for breakthrough improvements </li></ul><ul><li>Internalization of Six Sigma skills </li></ul><ul><li>Cross-functional team based problem solving </li></ul><ul><li>Drive continual improvements </li></ul>
  6. 6. LSS DEPLOYMENT ROADMAP HOW ‘ PINNACLE ’ REFINERY EMBRACED LSS
  7. 7. ROLL-OUT MODEL PILOT PHASE SCALE UP PHASE SUSTAIN PHASE PILOT WAVE (6 MONTHS) <ul><li>PROJECT REPOSITORY </li></ul><ul><li>LEADERSHIP BUY-IN </li></ul><ul><li>CREATE BUZZ </li></ul><ul><li>PEOPLE ENROLLMENT </li></ul>SCALE-UP (1 YEAR) <ul><li>COMPANY-WIDE ROLLOUT </li></ul><ul><li>SUPPORT FUNCTIONS </li></ul><ul><li>FINANCIAL FOCUS </li></ul><ul><li>KRA LINKAGES </li></ul><ul><li>INTEGRATE WITH STRATEGY PLANNING </li></ul><ul><li>ALIGN WITH BSC </li></ul><ul><li>INTERNAL MBBs </li></ul>INTERNALIZE (3 YEARS)
  8. 8. DEPLOYMENT ROADMAP Piloting Wave 2 Scale up Training <ul><li>Executive Overview (Leadership) </li></ul><ul><li>Champions training (15) </li></ul><ul><li>Green Belt (19) </li></ul><ul><li>Black Belt (11) </li></ul><ul><li>Green Belt (31) </li></ul><ul><li>Black Belt (17) </li></ul><ul><li>Green Belt (86) </li></ul><ul><li>Black Belt (15) </li></ul>Coaching <ul><li>GB Projects (7) </li></ul><ul><li>BB Projects (4) </li></ul><ul><li>GB Projects (11) </li></ul><ul><li>BB Projects (5) </li></ul><ul><li>GB Projects (23) </li></ul><ul><li>BB Projects (7) </li></ul>
  9. 9. PROJECT SELECTION HOW ‘ PINNACLE ’ IDENTIFIED STRATEGIC PROJECTS
  10. 10. PROJECT SELECTION <ul><li>Top-down approach </li></ul><ul><li>Leadership Involvement </li></ul><ul><li>Balanced focus </li></ul><ul><li>Realistic expectations </li></ul><ul><li>Aligned with scorecards </li></ul>
  11. 11. TOP DOWN APPROACH MISSION: “ A Great Place to Work ” VISION: “ Role Model for Environmental, Health, & Safety Performance ” “ Consistently Most Profitable, and Reliable Refinery ” “ Market Responsive ” <ul><li>STRATEGIC THEMES: </li></ul><ul><li>Environment & Safety Performance </li></ul><ul><li>Market Responsive/ Customer Focus </li></ul><ul><li>Resource Optimization </li></ul><ul><li>Great Place to Work </li></ul><ul><li>STRATEGIC INITIATIVES: </li></ul><ul><li>Six Sigma Projects </li></ul><ul><li>Other Strategic Projects </li></ul><ul><li>People & Process Alignment </li></ul>
  12. 12. REFINERY VISION: ROLE MODEL FOR EHS | CONSISTENTLY MOST PROFITABLE AND RELIABLE REFINERY | MARKET RESPONSIVE ENVIRONMENT & SAFETY PERFORMANCE MARKET RESPONSIVE/CUSTOMER FOCUS RESOURCE OPTIMIZATION GREAT PLACE TO WORK <ul><li>Improve Reliability of Fire Extinguishers </li></ul><ul><li>Bring Down Number of Fires </li></ul><ul><li>Bitumen Lorry TAT < 2hr. </li></ul><ul><li>Product Availability for MMPL </li></ul><ul><li>Biturox Production (All 3 Grades Availability) </li></ul><ul><li>Minimize fill weight variation of LPG </li></ul><ul><li>Minimize losses during ATF production </li></ul><ul><li>Maintain FO line sample viscosity between 150-180 </li></ul><ul><li>Increase Power Reliability </li></ul><ul><li>Minimize variation in LPG Filling </li></ul><ul><li>Sustain Yield as per VDU Column </li></ul><ul><li>Reducing Tankage TAT </li></ul><ul><li>Minimizing Crude Loss </li></ul><ul><li>Reduce Wastage in Canteen </li></ul><ul><li>Minimize complaints in estate </li></ul><ul><li>Increase number of suggestions </li></ul><ul><li>Minimize electricity consumption in estate </li></ul><ul><li>Optimize overtime in canteen </li></ul>PROJECT DRILL-DOWN MISSION: “ A GREAT PLACE TO WORK ”
  13. 13. PROJECT SELECTION RATIONALE <ul><li>Organizational Impact </li></ul><ul><li>Clarity of Scope </li></ul><ul><li>Feasibility of Solutions Implementation </li></ul><ul><li>Feasibility of Completion within 6 Months </li></ul><ul><li>Cuts Across Functions/ Cross Functional Teams </li></ul><ul><li>Domain Expert Available in Team </li></ul>
  14. 14. SAMPLE PROJECTS Project Goal Metric Baseline Goal Optimize Product Yield for VD, and VGO from VDU Column % Wt. on crude 2.5% 3.9% Reduce H2 Losses to flare Tons/day 2.4 ton/day 0 ton/day Reduce TAT of Bitumen Lorries Time 4.3 hrs. 2 hrs. Improve Reliability of Rotary Equipments Failures/yr. 4/year 2/year Maintain Fuel Oil Viscosity CST 260 160 Improve Reliability of Fire Extinguishers % non reliable 15% 5% Optimization of I/F generation in MMPL Volume 206 Kl 195Kl
  15. 15. PROJECT HOPPER <ul><li>Align LSS with annual strategy planning/Balanced Scorecard </li></ul><ul><li>Monthly steering committee meetings to review progress/identify projects </li></ul><ul><li>Customer voice as a source of projects </li></ul><ul><li>Linkages with KRA </li></ul>5 2 1 3 4
  16. 16. COMMON PITFALLS AVOIDED Web <ul><li>(1) Hype </li></ul><ul><li>Piloting </li></ul><ul><li>Avoided Big-Bang rollout </li></ul><ul><li>(2) Trivial Projects </li></ul><ul><li>Project drill-down from strategic theme </li></ul><ul><li>Charter created by champions </li></ul><ul><li>(3) Vague ₹ Gains </li></ul><ul><li>All projects ’ gains ratified by CFO </li></ul><ul><li>(4) Limited Champion Support </li></ul><ul><li>Champions involved at early stages </li></ul><ul><li>Training/certification mandatory </li></ul><ul><li>KRA Linkages </li></ul><ul><li>(5) Tool Obsession </li></ul><ul><li>Application of tools on need base </li></ul><ul><li>Retrofit data analysis instead of DOE wherever possible </li></ul>
  17. 17. SUCCESS FACTORS <ul><li>Involvement of Sponsors at all stages </li></ul><ul><li>Meticulous project selection process </li></ul><ul><li>Abundant data in system </li></ul><ul><li>Strict adherence to timelines & toll-gates </li></ul><ul><li>Realistic Expectations </li></ul>
  18. 18. ENHANCED CUSTOMER SATISFACTION: SEVERAL PROJECTS LINKED WITH CUSTOMER EXPERIENCE & LOYALTY PROCESS IMPROVEMENT: BREAKTHROUGH AND SUSTAINABLE PROCESS IMPROVEMENTS ACCOLADES: RECOGNIZED AS BEST PROJECTS IN SEVERAL NATIONAL & INTERNATIONAL AWARDS SUCH AS INSSAN, QIMPRO, IDEAS ETC. PRODUCTIVITY GAINS: DRAMATIC IMPROVEMENT IN OPERATIONAL EFFICIENCY, CONSISTENCY AND RELIABILITY OF PROCESSES FINANCIAL SAVINGS: DIRECT LINKAGE TO BOTTOM-LINE, CUMULATED SAVINGS (RATIFIED) OF OVER INR 200 CRORE RESULT
  19. 19. CASE STUDY 1: VDU COLUMN YIELD IMPROVEMENT
  20. 20. PROCESS SCHEMATIC
  21. 21. PROJECT CHARTER
  22. 22. PROCESS TREND LOW VD YIELD - AVG. 2.63% V/S TARGET 4%
  23. 23. -VE Cpk VALUES INDICATE EXTREMELY POOR PERFORMANCE PROCESS CAPABILITY
  24. 24. PROCESS FMEA
  25. 25. POTENTIAL CAUSES X1 X2 X3 X4 X5 Y
  26. 26. REGRESSION VDIR/RCO V/S YIELD HVGOCR V/S YIELD LVGOCR/RCO V/S YIELD RTC 293 V/S YIELD
  27. 27. DRAMATIC IMPROVEMENT IN VD YILED - AVERAGE YIELD OF 4.5% BREAKTHROUGH RESULTS
  28. 28.
  29. 29. CASE STUDY 2: REDUCTION IN GATE ENTRY TIME
  30. 30. BUSINESS CASE <ul><li>Project Title: Reduction in process time for Gate Entry Operation for visitors </li></ul><ul><li>Problem Definition: </li></ul><ul><li>Welcome slip is not ready when visitor arrives. </li></ul><ul><li>Average 15 minutes are taken for gate entry process </li></ul><ul><li>Too many counters for Welcome Slip, Mobile Phone hand-over, Vehicle pass, Laptop and other item entry </li></ul><ul><li>Goal: </li></ul><ul><li>Reduce Gate entry processing time </li></ul><ul><li>Provide better experience to the visitors at Gate entry </li></ul><ul><li>Improve company image </li></ul>
  31. 31. AS-IS PROCESS
  32. 32. ROOT CAUSES Problem Root Cause Solution Too much waiting for Visitors at early morning, lunch time & end of the shift No manning before 8am, after 3:30pm, lunch time 2 shift Counter operation (7:30 am to 5.30 pm) Visitors had to move back & forth at different windows Vehicle pass, Laptop entry & Mobile deposit area  at different counter Vehicle no on the same welcome slip, single window approach, allow mobile for admin area, laptop entry by visitor CISF to confirm Visitor has to wait till welcome slip is ready Minimum communication between the visitor and staff SMS to visitor on slip approval to ensure the slip is created prior All types of visitors through Welcome Slip No convenient procedure for contractor, delivery persons Welcome Slip for visitors and daily pass for technocrats/ delivery persons
  33. 33. SOLUTION IMPLEMENTATION Phase I: Implemented Solutions One window will be operational all the time <ul><li>System-generated monthly report giving department-wise count and just-in-time slips </li></ul><ul><li>Training and job rotation for window clerk </li></ul>Phase II: Implementation in pipeline Board at entrance to guide people of different locations <ul><li>Infrastructural modifications will be undertaken for front end counters </li></ul><ul><li>Kiosk with a printer for enabling the visitor for generating the welcome slip on his own without external interference and CISF to check and allow the visitor after photo id confirmation </li></ul>
  34. 34. IMPROVED PROCESS
  35. 35. Gate Entry Processing time reduced from Avg.15 mins to Avg. 4 mins BEFORE/AFTER
  36. 36. ABOUT SSA
  37. 37. PURPOSE & VISION Purpose: To enhance Stakeholder ’ s Value through partnering for growth; our journey will continue as long as there is a passion for perfection. Vision: To become the No.1 Business excellence solutions provider in India by 2015 with 20% revenue from overseas consulting. HIGH PERFORMANCE CAPABILITY | HIGH FINANCIAL STRENGTH
  38. 38. HISTORY 1999 SSA IS BORN <ul><li>BORN WITH A MISSIONARY ZEAL </li></ul><ul><li>VISION: ‘ MAKE MADE IN INDIA SYNONYMOUS TO QUALITY ’ </li></ul>MANAGEMENT SYSTEMS 2001 <ul><li>ISO 9001, QS 9000, ISO 14000, ISO 27001 </li></ul><ul><li>HRMS </li></ul><ul><li>BPMS </li></ul><ul><li>SIX SIGMA </li></ul>PROCESS EXCELLENCE 2006 <ul><li>ENTERPRISE-WIDE PROCESS MODELING </li></ul><ul><li>PROCESS REPOSITORY CREATION </li></ul><ul><li>KPI DASHBOARDS </li></ul><ul><li>LEAN DEPLOYMENT </li></ul><ul><li>GLOBAL ALLIANCES </li></ul><ul><li>GLOBAL DEPLOYMENTS </li></ul>BUSINESS EXCELLENCE 2010 <ul><li>INTEGRATED STRATEGY & PERFORMANCE MANAGEMENT SYSTEM </li></ul>HIGH PERFORMANCE CAPABILITY | HIGH FINANCIAL STRENGTH
  39. 39. ACCREDITATIONS RATED SE-2A BY CRISIL | HIGH PERFORMANCE CAPABILITY HIGH FINANCIAL STRENGTH ISO 9001 CERTIFIED ANSI IACET 1-2007 AUTHORIZED PROVIDER ISO 27001 ISMS CERTIFIED HIGH PERFORMANCE CAPABILITY | HIGH FINANCIAL STRENGTH
  40. 40. SELECT CLIENTELE HIGH PERFORMANCE CAPABILITY | HIGH FINANCIAL STRENGTH
  41. 41. GLOBAL REACH HIGH PERFORMANCE CAPABILITY | HIGH FINANCIAL STRENGTH
  42. 42. BASKET OF OFFERING HIGH PERFORMANCE CAPABILITY | HIGH FINANCIAL STRENGTH Lean Six Sigma Lean Management BPMS Solutions TPM ISO/ISMS/EMS/OHSAS Process Simulation Daily Work Management Project Management Design for Six Sigma (DFSS) Performance Management IT & ITES Support
  43. 43. SSA ’ S ISM MODEL “ ISM ® aligns people and the processes with the corporate objectives and goals ” - NC HIGH PERFORMANCE CAPABILITY | HIGH FINANCIAL STRENGTH
  44. 44. QUESTIONS?! HIGH PERFORMANCE CAPABILITY | HIGH FINANCIAL STRENGTH
  45. 45. Naveen Narayanan Glendale, AZ, December 8 th , 2010

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