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Six Sigma Green Belt Project on
Minimization of losses during
ATF delivery from Refinery to
IOC Sahar
Six Sigma Green Belt Project on
Minimization of losses during
ATF delivery from Refinery to
IOC Sahar
2
Start Date : June 2009
Black Belt : Vijay S.Dhonde / Samir Khachane
Master Black Belt : Naveen Narayanan
Project sponsor : DGM (MFG)
Team Members :Ms. S Sapre
H D Rathod
Neelesh Bhagwat
A.R.Chaudhary
3
Project
SIPOC
VOC
Diagrams1
DEFINE
ControlImproveAnalyzeMeasureDefine
4
PRODUCT
LOSS IN MTPA
(April 08-Feb 09)
ATF 3445
HSD 104
SK 67
MS 421
Product wise loss is very high in ATF, hence selected for the study.
ControlImproveAnalyzeMeasureDefine
5
ATF deliveries to IOC Sahar is contributing about 54.3 % of total loss in ATF
LOSS IN MTPA 1872 1297 277 0
Percent 54.3 37.6 8.0 0.0
Cum % 54.3 92.0 100.0 100.0
DESTINATION OtherIOC(S)IOC(S)-2IOC SAHA
3500
3000
2500
2000
1500
1000
500
0
100
80
60
40
20
0
LOSSINMTPA
Percent
Pareto Chart of DESTI NATI ON
ControlImproveAnalyzeMeasureDefine
6
Average delivery loss is about 0.6% for ATF to IOC Sahar.
554943373125191371
4
3
2
1
0
-1
Obser vat ion
LossFactorin%
_
X=0.597
UCL=1.977
LCL=-0.782
1
1
1
I Char t of Loss Factor
ControlImproveAnalyzeMeasureDefine
7
Project
Description
Minimizing losses during ATF product delivery from Refinery
to IOC Sahar
Business
Case
Refinery is experiencing huge losses during pipeline
transfers of various products to Other Oil Marketing
Companies (OMCs). This has resulted in huge financial loss to
the organisation
There is an urgent need to address these losses as there is
no dedicated agency in the refinery to monitor and control
these losses. The reduction of losses will increase refinery
GRM, and improve the PRISM parameters of “Fuel and Loss”.
Problem
Statement
Based on the sample data for April 08-Feb 09, it was
observed that all ATF delivery transactions from refinery to
IOC Sahar have reported average loss of 0.59% .This has
resulted in total loss of Rs. 7.43 crores for the period .
Project Charter ControlImproveAnalyzeMeasureDefine
8
Project Charter
Process
Owner
DGM ( Process)
Scope Start: Refinery tank gauging and sampling after receipt ex
plant.
Stop: Destination tank gauging and sampling after receipt
ex BPC MR
Excludes : Pilferage Loss
Project Goals Metric
% Loss on
Delivery
Baseline
Data from
SAP for 11
Months
Current
0.536%
Goal
0.3%
Entitlement
0.04%
ControlImproveAnalyzeMeasureDefine
9
Expected
Business
Results
By reducing PLT loss to IOC Sahar from 0.59% to 0.3% ,
resulting in saving of Rs 3.7Cr
Expected
Customer
Benefits
Reliability improvement in operation , Tracking and
monitoring documentations and any apparent loss during
PLT.
Team members Ms. S Sapre, H D Rathod, Neelesh Bhagwat, A.R.Chaudhary
Support
Required
Operations, Prod Despatch , HPFR, Oil A/C, ED Aviation,ED
Logistics and IOC Sahar
Risks/
Constraints
HPFR for line-up and QC of line content and IOC Sahar may
not co-operate for witnessing their gauging, sampling and
testing.
 
Project Charter ControlImproveAnalyzeMeasureDefine
10
y2=Ex
CTQ (Y)
CTQ Drill Down
Minimization of PLT losses
Efficient Product
Delivery System
Accurate delivery On time Delivery
Tank certification
on time
y2=Ex
Quantitative
Accuracy
Qualitative
Accuracy
Maximum
pumping rate
Prompt
Line-up
ControlImproveAnalyzeMeasureDefine
11
Financial Impact
Period April 2008 to Feb 2009
Total Loss while delivering
to IOC Sahar
in MT
1872
AVG RTP of ATF (Duty
paid) for the period,
Rs./MT
39696
Total Financial Loss for the
period
Rs. Crores
7.43
Total financial savings
envisaged by bringing
down the loss factor from
0.59% to 0.3%
In Rs Crores
3.7
ControlImproveAnalyzeMeasureDefine
12
Customer Output Process Input Supplier
ATF tank sampling and
gauging
ATF tank certification.
ATF tank line-up
Start delivery to IOC
Sahar
Check hourly delivery
figures
Stop delivery, gauge
refinery tanks, and
destination tank.
Compare final receipt
and delivery figures.
ATF product
delivered to
IOC Sahar
IOC Sahar ATF
product
from Tank
nos.
401,405,409
,426
ASA
ADDITIVE
CDU-1
CDU-2
CDU-3
PH5
C O P I S ControlImproveAnalyzeMeasureDefine
13
FINISHED
ATF
PROCESS ACTIVITY DIAGRAM OF ATF DELIVERY TO IOC SAHAR
IOC SAHAR
TANK
ATF
COMPONENT
ASA ADDITIVE
REFINERY
BATTERY
LIMIT
HPFR
Schematic ControlImproveAnalyzeMeasureDefine
14
X = Where this Stakeholder IS TODAY on the Project
O = Where this Stakeholder NEEDS TO BE on the Project
* When Populating the Stakeholder, consider the ARMI:
• A= Approver of team decisions
• R= Resource or subject matter expert (ad hoc)
• M= Member of team
• I= Interested Party who will need to be kept informed
Stakeholder ARMI*
Strongly
Opposed
Opposed Neutral Supportive Strongly Supportiv
GM (OPS) A OX
SCHEDULING &
BLENDING
R
OX
TDU M OX
OIL ACCOUNTS R X O
IOC SAHAR
I X O
ED Logistics AR OX
ED Aviation AR OX
LAB R X O
Stakeholder Analysis ControlImproveAnalyzeMeasureDefine
15
Project Metric
%Loss of Quantity delivered
= (Loss in MT/ MT of ATF Delivered)
Project Metrics ControlImproveAnalyzeMeasureDefine
16
Data
Pareto
Patterns
Capability
MASURE
DEFINE
ANALYZE
IMPROVE
ControlImproveAnalyzeMeasureDefine
18
Data screening
554943373125191371
2
1
0
-1
Obser v at ion
IndividualValue
_
X= 0.536
UCL= 1.671
LCL= -0.600
554943373125191371
2.0
1.5
1.0
0.5
0.0
Obser v at ion
MovingRange
__
MR= 0.427
UCL= 1.395
LCL= 0
1
1
1
1
1
I -MR Chart of Loss Factor_ 1
The Loss Factor reduced from 0.59 to 0.536 after data screening.
ControlImproveAnalyzeMeasureDefine
2.01.51.00.50.0-0.5
USL
LSL *
Target *
USL 0.3
Sample Mean 0.535632
Sample N 59
StDev (Within) 0.378547
StDev (Ov erall) 0.471328
Process Data
Cp *
CPL *
CPU -0.21
Cpk -0.21
Pp *
PPL *
PPU -0.17
Ppk -0.17
Cpm *
Ov erall Capability
Potential (Within) Capability
PPM < LSL *
PPM > USL 661016.95
PPM Total 661016.95
Observ ed Performance
PPM < LSL *
PPM > USL 733181.92
PPM Total 733181.92
Exp. Within Performance
PPM < LSL *
PPM > USL 691438.71
PPM Total 691438.71
Exp. Ov erall Performance
Within
Overall
Process Capability of Loss Factor_ 1
ControlImproveAnalyzeMeasureDefine
21
Data Stratification
426409405401
50
40
30
20
10
0
Tank_1
Loss
I nt er val Plot of Loss
95% CI for the Mean
Tanks 409 and 405 contribute to almost 63% of the
losses.
ControlImproveAnalyzeMeasureDefine
23
FM
EA
Regression
DOE
MASURE
DEFINE
ANALYZE
IMPROVE
2
MEASURE
ControlImproveAnalyzeMeasureDefine
27
PLT Loss
Man Machine Method
Material
Measurement
Mother Nature
Cause & effect Diagram
Wrong
dip,temp,den
Wrong lineup
Wrong
Entry in
AtOMS
Line
Slack
Faulty
thermo
meter
Imprope
r dip-
tape
Density
layeration
Wrong
Temperature
Tank
Calibration
Lack of consistency in measurement at
IOC Sahar
In adequate SOP for ATF
PLT to Airport, since there
is no surveying agency
involved( spading, locking
etc
Lack of time frame for
communicating final receipt
figure from IOC Sahar
Certification of density pre
delivery not being done (As
done by MMPL
line Leak
Valves Passing,
Gravitation to
other tanks
Passing valves/Poor
Valve Quality
Line Content
Quality
ControlImproveAnalyzeMeasureDefine
28
Cause Prioratization
Matrix
Causes Severity Occurrence Detection RPN No
Lack of consistency in measurement at IOC Sahar 9 9 9 729
Lack of ownership for abnormal Loss/gain 9 9 9 729
Lack of time frame for communicating final receipt
figure from IOC Sahar 9 9 9 729
In adequate SOP for ATF PLT to Airport, since there is
no surveying agency involved( spading, locking etc) 9 9 9 729
No system of rechecking density 5 9 9 405
Density difference with IOC not being cross checked
5 9 9 405
Temperature varies with settling duration/closing of tank 5 5 9 225
Human error in reading temperature 5 5 9 225
Line content quality, quantity 5 5 9 225
IOC Sahar heel quality 5 5 9 225
Measurement errors at refinery end 9 1 9 81
Wrong Line-up by operator 9 1 9 81
Passing /faulty valves 9 1 9 81
Lack Of flow meters 9 1 9 81
ControlImproveAnalyzeMeasureDefine
29
Findings
Based on the risk priority number, the following causes were identified
as the top priority items.
• Six Sigma Team visited BPC Santacruz (Airport) to validate the findings.
However, due to logistics reasons of different entities, permissions were not
granted to carry out checks at IOC Sahar.
•HP Santacruz is the controlling/monitoring agency for all PLTS to AFS
• BPCL representative is not involved in the lining up checking of tank dips at
receiving end (IOC Sahar, HP S'cruz).
• There is no independent agency monitoring the transfer.
• Final receipt figure from receiving location is never conveyed to PH5.
• Density of received product is not matched with that of delivering tank.
• Human error in sampling in both locations.
• Effect of line content quality (760 KL) and receiving location heel quantity and
quality.
ControlImproveAnalyzeMeasureDefine
30
Root Cause validation - Instance
• On 18th
July, 2009, ATF PLT to HP S’cruz was in progress and
difference in delivery and receipt figures was observed. In a
period of four hours, the difference was 40 TKL. The PLT was
stopped and on investigation, HP S’cruz confirmed of migration
to IOC Sahar.
Such instances cannot be ruled out unless there is an agency to
take care of BPCL’s interest.
ControlImproveAnalyzeMeasureDefine
SCAM
PER
MASURE
DEFINE
ANALYZE
IMPROVE
2
MEASURE
Sol. Proi.
Cost benefit. Ana.
FMEA – Pilot Sol’n.
ControlImproveAnalyzeMeasureDefine
SCAMPER ANALYSIS FOR SOLUTION GENERATION
KEY ROOT CAUSE S C A M P E R
Lack of consistency in
measurement at IOC
Sahar
Standardizing gauges and
thermometers , sampling , and
measurement of density  
Surveyor to
be
deployed
A procedure to
be made for
PLT to IOC
Sahar      
Lack of ownership for
abnormal Loss/gain
 
BPC S'cruz to
witness
gauging and
line-up    
loss
control
departme
nt to be
restarted    
Lack of time frame for
communicating final
receipt figure from IOC
Sahar
   
Surveyor to
be
deployed
IOC to convey
the FRF to PH
within 12 Hrs      
SCAMPER ANALYSIS
ControlImproveAnalyzeMeasureDefine
SCAMPER ANALYSIS FOR SOLUTION GENERATION
KEY ROOT CAUSE S C A M P E R
In adequate SOP for ATF PLT to
Airport, since there is no
surveying agency
involved( spading, locking etc)    
Adapt the
procedure
followed by
OMC, HPFR
Put density
meter      
No system of rechecking density
       
1)Retention
sample
testing
/comparison
with QC density
   
Density difference with IOC not
being cross checked
     
incorporate
Density
readings,
previous PLT
density (line
content quality)
in LD book
1)Retention
sample
testing
/comparison
with IOC and to
be recorded in
LD book for
periodic review    
Temperature varies with settling
duration/closing of tank
   
Give settling
time, as for
MMBPL        
Lack Of flow meters
       
Modify del line-
up to take the
mass flow
meter in-line.    
SCAMPER ANALYSIS
ControlImproveAnalyzeMeasureDefine
SCAMPER ANALYSIS FOR SOLUTION GENERATION
KEY ROOT CAUSE S C A M P E R
Human error in
reading
temperature
     
Training procedure
for gauging/temp
measurement to be
formalized, and
periodic
review/surprise
checks by shift
officer
Auto gauge
temperature
indications to be
used, verified, and
reliability to be
improved    
Line content
quality, quantity
     
incorporate Density
readings, previous
PLT density (line
content quality) in LD
book    
When ever possible, HP
line content to be
displaced to BPC
Santacruz, so that loss will
be NIL since its BPC to
BPC
IOC Sahar heel
quality
Accounting to be based
on KLs received, and
density of parent tank,
as exists for crude at
KR            
Lack Of flow
meters
       
Modify del line-up
to take the mass
flow meter in-line.    
SCAMPER ANALYSIS
ControlImproveAnalyzeMeasureDefine
CRITERIA SCAMPER LOW COST LOW
COMPLEXITY
EASE
OF
IMPLEMENTATION
Total
WEIGHTAGE   0.7 1.5 1.8  
SOLUTION          
Sign painting, P&ID availability, training, charge hand's
supervision ( for line-up) C 25.2 54 64.8 144
Surveyor to be deployed A 19.6 54 64.8 138.4
Incorporate Density meter
M 14 54 64.8 132.8
Standardizing gauges and thermometers , sampling , and
measurement of density S 19.6 54 50.4 124
Standard gauging procedure to be made, and put in
training manual and to be followed C 25.2 54 43.2 122.4
When ever possible, HP line content to be displaced to
BPC Santacruz, so that loss will be NIL since its
BPC to BPC R 25.2 54 36 115.2
Adapt the procedure followed by OMC, HPFR A 25.2 54 36 115.2
Surveyor to seal and lock other valves M 25.2 48 36 109.2
Training procedure for gauging/temp measurement to be
formalized, and periodic review/surprise checks by
shift officer M 25.2 54 28.8 108
SOLUTION PRIORITIZATION
MATRIX
ControlImproveAnalyzeMeasureDefine
CRITERIA SCAMPER TOOL LOW COST LOW COMPLEXITY EASE
OF
IMPLEMENTATION
Total
WEIGHTAGE   0.7 1.5 1.8  
SOLUTION          
Retention sample testing /comparison
with QC density
P 25.2 54 28.8 108
Auto gauge temperature indications to
be used, verified, and reliability to
be improved P 25.2 24 57.6 106.8
Modify del line-up to take the mass flow
meter in-line. P 19.6 48 36 103.6
Identify and replace the faulty valves S 22.4 54 21.6 98
A procedure to be made and followed
for PLT to IOC Sahar M 25.2 42 28.8 96
1)Retention sample testing /comparison
with IOC and to be recorded in LD
book for periodic review P 25.2 24 43.2 92.4
SOLUTION
PRIORITIZATION MATRIX
ControlImproveAnalyzeMeasureDefine
CRITERIA SCAMPER
TOOL
LOW
COST
LOW
COMPLEXITY
EASE
OF IMPLEMENTATION
Total
WEIGHTAGE   0.7 1.5 1.8  
SOLUTION          
Install reversible spectacle
blinds/lockable valves A 19.6 36 36 91.6
Charge hand/Officer to train/conduct
surprise checks P 25.2 30 36 91.2
incorporate Density readings, previous
PLT density (line content quality) in LD
book M 25.2 30 28.8 84
Accounting to be based on KLs
received, and density of parent tank, as
exists for crude at KR S 25.2 30 21.6 76.8
loss control department to be restarted P 11.2 30 28.8 70
Give settling time, as for MMBPL A 22.4 36 7.2 65.6
BPC S'cruz to witness gauging and line-
up C 25.2 24 14.4 63.6
IOC to convey the FRF to PH within 12
Hrs M 25.2 6 21.6 52.8
SOLUTION
PRIORITIZATION MATRIX
ControlImproveAnalyzeMeasureDefine
Least Effort - Maximum
Benefit Solutions
2 Surveyor To be appointed
7
Adapt the procedure followed by OMC,
HPFR
8 Surveyor to seal and lock other valves
9
Training procedure for gauging/temp
measurement to be formalized, and periodic
review/surprise checks by shift officer
11
Auto gauge temperature indications to be
used, verified, and reliability to be improved
14
A procedure to be made and followed for
PLT to IOC Sahar
15
Retention sample testing /comparison with
IOC and to be recorded in LD book for
periodic review
17
Charge hand/Officer to train/conduct
surprise checks
18
incorporate Density readings, previous PLT
density (line content quality) in LD book
20
loss control department to be restarted
22
BPC S'cruz to witness gauging and line-up
23
IOC to convey the FRF to PH within 12 Hrs
2
34
1
5
6
7
8
9
10
11
13
14
15
16
17
18
19
20
21 22
23
ControlImproveAnalyzeMeasureDefine
Y REDUCTION IN ATF PLT LOSSES TO IOC SAHAR
PROBLEM Loss incurred in ATF transfer
ROOT CAUSE
Lack of information
about losses to
PH5.
Receipt figure by
OMC is Final. PH5
is unaware of Final
receipt figures/
potential losses.
PH Checks receipt
figures in KL @
Natural temp, but
losses are booked
in KL @ 15deg and
MT.
PLT To airport is the only area
which doesn’t have
intervention of BPC
representatives at recipient
end. No agency to protect
corporation’s interest in PLT.
EFFECT
TDU only
documents the
losses, and does
not investigate
losses. PH5 cannot
investigate as it is
too late by this time.
Loss borne by
refinery even if
migration happens
in AFS tanks.
PH is not aware of
losses at 15Deg,
and MT
In case of a loss booked, we
don’t have enough data to
challenge the loss.
SOLUTION
Surveyor to be
appointed for airport
PLTs.
Surveyor to
monitor the PLT,
and analyze
reasons for losses.
Surveyor to convey
the loss/gain
figures to PH
Reason, as investigated by
the surveyor/PH for each PLT
loss to be recorded, and
solutions to be found for
eliminating the reasons.
SOLUTION TREE ControlImproveAnalyzeMeasureDefine
SR
NO
DESCRIPTION OF SOLUTION
ACTION
POINTS
BY WHOM BY WHEN SUPPORT REQD.
1
Surveyor To be appointed Under process S&B 15th
Sept-09 Management approval for
expenditure, around Rs 50,000
per month.
ED logistics to get approval
form OMC for surveyor witness.
2
Adapt the procedure followed by OMC,
HPFR
Check existing
procedure at HPFR
Six Sigma
team
15th
Sept-09 Appointment with HPFR,
marketing to introduce the SSG
group.
3
Surveyor to seal and lock other valves After Point no-2 Surveyor
4
Training procedure for gauging/temp
measurement to be formalized, and periodic
review/surprise checks by shift officer
Done Six Sigma
team
15th
Sept-09 B&M operations to support
5
Auto gauge temperature indications to be
used, verified, and reliability to be improved
*Verify reliability of
autogauge
temperature
indications
*Autgauge temp
indication to be used
for verified tanks
B&M
operations
30th
Sept-09 Support from B&M operations is
required.
6
A procedure to be made and followed for
PLT to IOC Sahar
*Procedure to be
made
Six Sigma
team
15th
Sept-09 B&M operations to support
Solution Implementation
Action Plan
ControlImproveAnalyzeMeasureDefine
Microsoft Word
Document
Microsoft Word
Document
Microsoft Excel
Worksheet
HPFR BPMR
HPFR BPMR
Digital thermometers used for all
products, including ATF. Temperature
displayed while probe is in liquid. Least
count 0.1 Deg C
Reported in two decimals. More
accurate
Mercury thermometers, dipped in sample
bottles. Least count 0.5 Deg C.
All product delivery lines outside
refinery have Mass flow meters
MS/SK HSD delivery lines to installation
have the mass flow meters, which are un
utilized from the day of installation.
Positive isolation (spading) of all lines
connected with the tank/pump, except
the one that is delivering is done as a
procedure for all white oils.
No spading done. The practice was
existing prevoiusly(10 years back), which
has been slowly discontinued.
While Delivering to OMC, marketing
bears the loss gain.
While delivering to OMC, refinery bears
the loss/gain.
ControlImproveAnalyzeMeasureDefine
SR
NO
DESCRIPTION OF
SOLUTION
ACTION POINTS BY WHOM BY WHEN
SUPPORT
REQD.
7
incorporate Density readings,
previous PLT density (line content
quality) in LD book
This shall be a part of
the standard
procedure, mentioned
in pt no-14
Six Sigma team 15th
Sept-09 B&M operations to
support
8
New loss control department to be
set-up.
Scope of work for the
department to be
finalized.
GM(0) 30th
Sept-09 Request from
B&M section
head, to GMO for
the need
9
BPC S'cruz to witness gauging and
line-up
*Supplies to talk to
Aviation SBU, for BPC
Scruz to witness.
S&B
department
head
15th
Sept-09 ED Logistics, ED
aviation
10
Retention sample testing
/comparison with IOC and to be
recorded in LD book for periodic
review
11
Charge hand/Officer to train/conduct
surprise checks
*After surveyor is
appointed, he will witness
the gauging
12
IOC to convey the FRF to PH within
6Hrs
*It has to be
incorporated as a
standard procedure,
with concurrence from
Avition SBU, and
industry.
S&B
department
head
30th
Sept-09 ED Logistics, ED
aviation, GMO
Solution Implementation
Action Plan (HIDDEN)
ControlImproveAnalyzeMeasureDefine
45
ControlImproveAnalyzeMeasureDefine
CO
NTR
O
L
PLAN
FM
EA
MASURE
DEFINE
ANALYZE
IMPROVE
2
MEASURE
LOSS FACTOR
COMPARISON
1110987654321
1.5
1.0
0.5
0.0
-0.5
Obser v at ion
IndividualValue
_
X= 0.394
UCL= 1.405
LCL= -0.616
I Char t of st age
554943373125191371
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
Obser v at ion
IndividualValue
_
X= 0.536
UCL= 1.671
LCL= -0.600
1
1
1
I Char t of Loss Fact or _ 1
ControlImproveAnalyzeMeasureDefine
PROCESS
MANAGEMENT
Project
Y
Metric UOM Respon
sibility
Frequency of
data
collection
Type of
Control
Chart
What to
respond
Who will
respond
Corrective Action to be
initiated
PLT Loss Loss
Factor
%(On
Qty del
in MT)
Shift
Officer
Every
Transaction
IMR Loss
Factor>0.3
Shift
Officer
Surveyor to re-confirm
figures at receiving end
Vital X’s
Audit
Surveyor log
NA NA S&B
Section
head
Once a week IMR Deviations
from
SOP’s
Shift
Officer
Review the SOP’s for
migrations etc.
Density Diff
(Ref QC Vs
IOC tank)
Diff g/cc Shift
Officer
Every
Transaction
IMR >0.0025 Shift
Officer
1)Surveyor to check
recipient density.
2)Testing of refinery
retention samples
3)Surveyor to cal effect of
heel, l/s density
Difference in
dip (Manual
Vs Auto
gauge)
Dip diff cms Shift
Officer
Every
Transaction
IMR Diff in
mass >12
MT
Shift
officer
Verify the correctness
Diff in Temp
(Manual Vs
Auto gauge)
Temp
diff
Deg C Shift
Officer
Every
Transaction
IMR Diff in
mass >12
MT
Shift
officer
Verify the correctness
ControlImproveAnalyzeMeasureDefine
BENIFIT ANALYSIS
Period April 2008 to
Feb 2009
April 2009 to 10th
Sept-09
Total Loss while delivering to IOC
Sahar
in MT
1872 495
Loss Factor in
%
0.596 0.393
AVG RTP of ATF (Duty paid) for
the period,
Rs./MT
39696 25942
Total Financial Loss for the period
Rs. Crores
7.43 (9 Crores per
annnum)
1.28 (3.1 Crores per
annum) – savings of
59 Million INR/ 1.2
Million USD per
annum)
Total financial savings envisaged
by bringing down the loss factor
from 0.59% to 0.3%
In Rs Crores
3.7 0.97
ControlImproveAnalyzeMeasureDefine
INTANGIBLE
BENIFITS
•The system adapted in ATF PLT can be
extended to all other products
•The reduction in overall loss, will reduce
refinery loss, improve the PRISM parameter
of F&L.
ControlImproveAnalyzeMeasureDefine
52

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Using Six Sigma to reduce ATF pipeline transfer losses

  • 1. 1 Six Sigma Green Belt Project on Minimization of losses during ATF delivery from Refinery to IOC Sahar Six Sigma Green Belt Project on Minimization of losses during ATF delivery from Refinery to IOC Sahar
  • 2. 2 Start Date : June 2009 Black Belt : Vijay S.Dhonde / Samir Khachane Master Black Belt : Naveen Narayanan Project sponsor : DGM (MFG) Team Members :Ms. S Sapre H D Rathod Neelesh Bhagwat A.R.Chaudhary
  • 4. 4 PRODUCT LOSS IN MTPA (April 08-Feb 09) ATF 3445 HSD 104 SK 67 MS 421 Product wise loss is very high in ATF, hence selected for the study. ControlImproveAnalyzeMeasureDefine
  • 5. 5 ATF deliveries to IOC Sahar is contributing about 54.3 % of total loss in ATF LOSS IN MTPA 1872 1297 277 0 Percent 54.3 37.6 8.0 0.0 Cum % 54.3 92.0 100.0 100.0 DESTINATION OtherIOC(S)IOC(S)-2IOC SAHA 3500 3000 2500 2000 1500 1000 500 0 100 80 60 40 20 0 LOSSINMTPA Percent Pareto Chart of DESTI NATI ON ControlImproveAnalyzeMeasureDefine
  • 6. 6 Average delivery loss is about 0.6% for ATF to IOC Sahar. 554943373125191371 4 3 2 1 0 -1 Obser vat ion LossFactorin% _ X=0.597 UCL=1.977 LCL=-0.782 1 1 1 I Char t of Loss Factor ControlImproveAnalyzeMeasureDefine
  • 7. 7 Project Description Minimizing losses during ATF product delivery from Refinery to IOC Sahar Business Case Refinery is experiencing huge losses during pipeline transfers of various products to Other Oil Marketing Companies (OMCs). This has resulted in huge financial loss to the organisation There is an urgent need to address these losses as there is no dedicated agency in the refinery to monitor and control these losses. The reduction of losses will increase refinery GRM, and improve the PRISM parameters of “Fuel and Loss”. Problem Statement Based on the sample data for April 08-Feb 09, it was observed that all ATF delivery transactions from refinery to IOC Sahar have reported average loss of 0.59% .This has resulted in total loss of Rs. 7.43 crores for the period . Project Charter ControlImproveAnalyzeMeasureDefine
  • 8. 8 Project Charter Process Owner DGM ( Process) Scope Start: Refinery tank gauging and sampling after receipt ex plant. Stop: Destination tank gauging and sampling after receipt ex BPC MR Excludes : Pilferage Loss Project Goals Metric % Loss on Delivery Baseline Data from SAP for 11 Months Current 0.536% Goal 0.3% Entitlement 0.04% ControlImproveAnalyzeMeasureDefine
  • 9. 9 Expected Business Results By reducing PLT loss to IOC Sahar from 0.59% to 0.3% , resulting in saving of Rs 3.7Cr Expected Customer Benefits Reliability improvement in operation , Tracking and monitoring documentations and any apparent loss during PLT. Team members Ms. S Sapre, H D Rathod, Neelesh Bhagwat, A.R.Chaudhary Support Required Operations, Prod Despatch , HPFR, Oil A/C, ED Aviation,ED Logistics and IOC Sahar Risks/ Constraints HPFR for line-up and QC of line content and IOC Sahar may not co-operate for witnessing their gauging, sampling and testing.   Project Charter ControlImproveAnalyzeMeasureDefine
  • 10. 10 y2=Ex CTQ (Y) CTQ Drill Down Minimization of PLT losses Efficient Product Delivery System Accurate delivery On time Delivery Tank certification on time y2=Ex Quantitative Accuracy Qualitative Accuracy Maximum pumping rate Prompt Line-up ControlImproveAnalyzeMeasureDefine
  • 11. 11 Financial Impact Period April 2008 to Feb 2009 Total Loss while delivering to IOC Sahar in MT 1872 AVG RTP of ATF (Duty paid) for the period, Rs./MT 39696 Total Financial Loss for the period Rs. Crores 7.43 Total financial savings envisaged by bringing down the loss factor from 0.59% to 0.3% In Rs Crores 3.7 ControlImproveAnalyzeMeasureDefine
  • 12. 12 Customer Output Process Input Supplier ATF tank sampling and gauging ATF tank certification. ATF tank line-up Start delivery to IOC Sahar Check hourly delivery figures Stop delivery, gauge refinery tanks, and destination tank. Compare final receipt and delivery figures. ATF product delivered to IOC Sahar IOC Sahar ATF product from Tank nos. 401,405,409 ,426 ASA ADDITIVE CDU-1 CDU-2 CDU-3 PH5 C O P I S ControlImproveAnalyzeMeasureDefine
  • 13. 13 FINISHED ATF PROCESS ACTIVITY DIAGRAM OF ATF DELIVERY TO IOC SAHAR IOC SAHAR TANK ATF COMPONENT ASA ADDITIVE REFINERY BATTERY LIMIT HPFR Schematic ControlImproveAnalyzeMeasureDefine
  • 14. 14 X = Where this Stakeholder IS TODAY on the Project O = Where this Stakeholder NEEDS TO BE on the Project * When Populating the Stakeholder, consider the ARMI: • A= Approver of team decisions • R= Resource or subject matter expert (ad hoc) • M= Member of team • I= Interested Party who will need to be kept informed Stakeholder ARMI* Strongly Opposed Opposed Neutral Supportive Strongly Supportiv GM (OPS) A OX SCHEDULING & BLENDING R OX TDU M OX OIL ACCOUNTS R X O IOC SAHAR I X O ED Logistics AR OX ED Aviation AR OX LAB R X O Stakeholder Analysis ControlImproveAnalyzeMeasureDefine
  • 15. 15 Project Metric %Loss of Quantity delivered = (Loss in MT/ MT of ATF Delivered) Project Metrics ControlImproveAnalyzeMeasureDefine
  • 17. 18 Data screening 554943373125191371 2 1 0 -1 Obser v at ion IndividualValue _ X= 0.536 UCL= 1.671 LCL= -0.600 554943373125191371 2.0 1.5 1.0 0.5 0.0 Obser v at ion MovingRange __ MR= 0.427 UCL= 1.395 LCL= 0 1 1 1 1 1 I -MR Chart of Loss Factor_ 1 The Loss Factor reduced from 0.59 to 0.536 after data screening. ControlImproveAnalyzeMeasureDefine
  • 18. 2.01.51.00.50.0-0.5 USL LSL * Target * USL 0.3 Sample Mean 0.535632 Sample N 59 StDev (Within) 0.378547 StDev (Ov erall) 0.471328 Process Data Cp * CPL * CPU -0.21 Cpk -0.21 Pp * PPL * PPU -0.17 Ppk -0.17 Cpm * Ov erall Capability Potential (Within) Capability PPM < LSL * PPM > USL 661016.95 PPM Total 661016.95 Observ ed Performance PPM < LSL * PPM > USL 733181.92 PPM Total 733181.92 Exp. Within Performance PPM < LSL * PPM > USL 691438.71 PPM Total 691438.71 Exp. Ov erall Performance Within Overall Process Capability of Loss Factor_ 1 ControlImproveAnalyzeMeasureDefine
  • 19. 21 Data Stratification 426409405401 50 40 30 20 10 0 Tank_1 Loss I nt er val Plot of Loss 95% CI for the Mean Tanks 409 and 405 contribute to almost 63% of the losses. ControlImproveAnalyzeMeasureDefine
  • 21. 27 PLT Loss Man Machine Method Material Measurement Mother Nature Cause & effect Diagram Wrong dip,temp,den Wrong lineup Wrong Entry in AtOMS Line Slack Faulty thermo meter Imprope r dip- tape Density layeration Wrong Temperature Tank Calibration Lack of consistency in measurement at IOC Sahar In adequate SOP for ATF PLT to Airport, since there is no surveying agency involved( spading, locking etc Lack of time frame for communicating final receipt figure from IOC Sahar Certification of density pre delivery not being done (As done by MMPL line Leak Valves Passing, Gravitation to other tanks Passing valves/Poor Valve Quality Line Content Quality ControlImproveAnalyzeMeasureDefine
  • 22. 28 Cause Prioratization Matrix Causes Severity Occurrence Detection RPN No Lack of consistency in measurement at IOC Sahar 9 9 9 729 Lack of ownership for abnormal Loss/gain 9 9 9 729 Lack of time frame for communicating final receipt figure from IOC Sahar 9 9 9 729 In adequate SOP for ATF PLT to Airport, since there is no surveying agency involved( spading, locking etc) 9 9 9 729 No system of rechecking density 5 9 9 405 Density difference with IOC not being cross checked 5 9 9 405 Temperature varies with settling duration/closing of tank 5 5 9 225 Human error in reading temperature 5 5 9 225 Line content quality, quantity 5 5 9 225 IOC Sahar heel quality 5 5 9 225 Measurement errors at refinery end 9 1 9 81 Wrong Line-up by operator 9 1 9 81 Passing /faulty valves 9 1 9 81 Lack Of flow meters 9 1 9 81 ControlImproveAnalyzeMeasureDefine
  • 23. 29 Findings Based on the risk priority number, the following causes were identified as the top priority items. • Six Sigma Team visited BPC Santacruz (Airport) to validate the findings. However, due to logistics reasons of different entities, permissions were not granted to carry out checks at IOC Sahar. •HP Santacruz is the controlling/monitoring agency for all PLTS to AFS • BPCL representative is not involved in the lining up checking of tank dips at receiving end (IOC Sahar, HP S'cruz). • There is no independent agency monitoring the transfer. • Final receipt figure from receiving location is never conveyed to PH5. • Density of received product is not matched with that of delivering tank. • Human error in sampling in both locations. • Effect of line content quality (760 KL) and receiving location heel quantity and quality. ControlImproveAnalyzeMeasureDefine
  • 24. 30 Root Cause validation - Instance • On 18th July, 2009, ATF PLT to HP S’cruz was in progress and difference in delivery and receipt figures was observed. In a period of four hours, the difference was 40 TKL. The PLT was stopped and on investigation, HP S’cruz confirmed of migration to IOC Sahar. Such instances cannot be ruled out unless there is an agency to take care of BPCL’s interest. ControlImproveAnalyzeMeasureDefine
  • 25. SCAM PER MASURE DEFINE ANALYZE IMPROVE 2 MEASURE Sol. Proi. Cost benefit. Ana. FMEA – Pilot Sol’n. ControlImproveAnalyzeMeasureDefine
  • 26. SCAMPER ANALYSIS FOR SOLUTION GENERATION KEY ROOT CAUSE S C A M P E R Lack of consistency in measurement at IOC Sahar Standardizing gauges and thermometers , sampling , and measurement of density   Surveyor to be deployed A procedure to be made for PLT to IOC Sahar       Lack of ownership for abnormal Loss/gain   BPC S'cruz to witness gauging and line-up     loss control departme nt to be restarted     Lack of time frame for communicating final receipt figure from IOC Sahar     Surveyor to be deployed IOC to convey the FRF to PH within 12 Hrs       SCAMPER ANALYSIS ControlImproveAnalyzeMeasureDefine
  • 27. SCAMPER ANALYSIS FOR SOLUTION GENERATION KEY ROOT CAUSE S C A M P E R In adequate SOP for ATF PLT to Airport, since there is no surveying agency involved( spading, locking etc)     Adapt the procedure followed by OMC, HPFR Put density meter       No system of rechecking density         1)Retention sample testing /comparison with QC density     Density difference with IOC not being cross checked       incorporate Density readings, previous PLT density (line content quality) in LD book 1)Retention sample testing /comparison with IOC and to be recorded in LD book for periodic review     Temperature varies with settling duration/closing of tank     Give settling time, as for MMBPL         Lack Of flow meters         Modify del line- up to take the mass flow meter in-line.     SCAMPER ANALYSIS ControlImproveAnalyzeMeasureDefine
  • 28. SCAMPER ANALYSIS FOR SOLUTION GENERATION KEY ROOT CAUSE S C A M P E R Human error in reading temperature       Training procedure for gauging/temp measurement to be formalized, and periodic review/surprise checks by shift officer Auto gauge temperature indications to be used, verified, and reliability to be improved     Line content quality, quantity       incorporate Density readings, previous PLT density (line content quality) in LD book     When ever possible, HP line content to be displaced to BPC Santacruz, so that loss will be NIL since its BPC to BPC IOC Sahar heel quality Accounting to be based on KLs received, and density of parent tank, as exists for crude at KR             Lack Of flow meters         Modify del line-up to take the mass flow meter in-line.     SCAMPER ANALYSIS ControlImproveAnalyzeMeasureDefine
  • 29. CRITERIA SCAMPER LOW COST LOW COMPLEXITY EASE OF IMPLEMENTATION Total WEIGHTAGE   0.7 1.5 1.8   SOLUTION           Sign painting, P&ID availability, training, charge hand's supervision ( for line-up) C 25.2 54 64.8 144 Surveyor to be deployed A 19.6 54 64.8 138.4 Incorporate Density meter M 14 54 64.8 132.8 Standardizing gauges and thermometers , sampling , and measurement of density S 19.6 54 50.4 124 Standard gauging procedure to be made, and put in training manual and to be followed C 25.2 54 43.2 122.4 When ever possible, HP line content to be displaced to BPC Santacruz, so that loss will be NIL since its BPC to BPC R 25.2 54 36 115.2 Adapt the procedure followed by OMC, HPFR A 25.2 54 36 115.2 Surveyor to seal and lock other valves M 25.2 48 36 109.2 Training procedure for gauging/temp measurement to be formalized, and periodic review/surprise checks by shift officer M 25.2 54 28.8 108 SOLUTION PRIORITIZATION MATRIX ControlImproveAnalyzeMeasureDefine
  • 30. CRITERIA SCAMPER TOOL LOW COST LOW COMPLEXITY EASE OF IMPLEMENTATION Total WEIGHTAGE   0.7 1.5 1.8   SOLUTION           Retention sample testing /comparison with QC density P 25.2 54 28.8 108 Auto gauge temperature indications to be used, verified, and reliability to be improved P 25.2 24 57.6 106.8 Modify del line-up to take the mass flow meter in-line. P 19.6 48 36 103.6 Identify and replace the faulty valves S 22.4 54 21.6 98 A procedure to be made and followed for PLT to IOC Sahar M 25.2 42 28.8 96 1)Retention sample testing /comparison with IOC and to be recorded in LD book for periodic review P 25.2 24 43.2 92.4 SOLUTION PRIORITIZATION MATRIX ControlImproveAnalyzeMeasureDefine
  • 31. CRITERIA SCAMPER TOOL LOW COST LOW COMPLEXITY EASE OF IMPLEMENTATION Total WEIGHTAGE   0.7 1.5 1.8   SOLUTION           Install reversible spectacle blinds/lockable valves A 19.6 36 36 91.6 Charge hand/Officer to train/conduct surprise checks P 25.2 30 36 91.2 incorporate Density readings, previous PLT density (line content quality) in LD book M 25.2 30 28.8 84 Accounting to be based on KLs received, and density of parent tank, as exists for crude at KR S 25.2 30 21.6 76.8 loss control department to be restarted P 11.2 30 28.8 70 Give settling time, as for MMBPL A 22.4 36 7.2 65.6 BPC S'cruz to witness gauging and line- up C 25.2 24 14.4 63.6 IOC to convey the FRF to PH within 12 Hrs M 25.2 6 21.6 52.8 SOLUTION PRIORITIZATION MATRIX ControlImproveAnalyzeMeasureDefine
  • 32. Least Effort - Maximum Benefit Solutions 2 Surveyor To be appointed 7 Adapt the procedure followed by OMC, HPFR 8 Surveyor to seal and lock other valves 9 Training procedure for gauging/temp measurement to be formalized, and periodic review/surprise checks by shift officer 11 Auto gauge temperature indications to be used, verified, and reliability to be improved 14 A procedure to be made and followed for PLT to IOC Sahar 15 Retention sample testing /comparison with IOC and to be recorded in LD book for periodic review 17 Charge hand/Officer to train/conduct surprise checks 18 incorporate Density readings, previous PLT density (line content quality) in LD book 20 loss control department to be restarted 22 BPC S'cruz to witness gauging and line-up 23 IOC to convey the FRF to PH within 12 Hrs 2 34 1 5 6 7 8 9 10 11 13 14 15 16 17 18 19 20 21 22 23 ControlImproveAnalyzeMeasureDefine
  • 33. Y REDUCTION IN ATF PLT LOSSES TO IOC SAHAR PROBLEM Loss incurred in ATF transfer ROOT CAUSE Lack of information about losses to PH5. Receipt figure by OMC is Final. PH5 is unaware of Final receipt figures/ potential losses. PH Checks receipt figures in KL @ Natural temp, but losses are booked in KL @ 15deg and MT. PLT To airport is the only area which doesn’t have intervention of BPC representatives at recipient end. No agency to protect corporation’s interest in PLT. EFFECT TDU only documents the losses, and does not investigate losses. PH5 cannot investigate as it is too late by this time. Loss borne by refinery even if migration happens in AFS tanks. PH is not aware of losses at 15Deg, and MT In case of a loss booked, we don’t have enough data to challenge the loss. SOLUTION Surveyor to be appointed for airport PLTs. Surveyor to monitor the PLT, and analyze reasons for losses. Surveyor to convey the loss/gain figures to PH Reason, as investigated by the surveyor/PH for each PLT loss to be recorded, and solutions to be found for eliminating the reasons. SOLUTION TREE ControlImproveAnalyzeMeasureDefine
  • 34. SR NO DESCRIPTION OF SOLUTION ACTION POINTS BY WHOM BY WHEN SUPPORT REQD. 1 Surveyor To be appointed Under process S&B 15th Sept-09 Management approval for expenditure, around Rs 50,000 per month. ED logistics to get approval form OMC for surveyor witness. 2 Adapt the procedure followed by OMC, HPFR Check existing procedure at HPFR Six Sigma team 15th Sept-09 Appointment with HPFR, marketing to introduce the SSG group. 3 Surveyor to seal and lock other valves After Point no-2 Surveyor 4 Training procedure for gauging/temp measurement to be formalized, and periodic review/surprise checks by shift officer Done Six Sigma team 15th Sept-09 B&M operations to support 5 Auto gauge temperature indications to be used, verified, and reliability to be improved *Verify reliability of autogauge temperature indications *Autgauge temp indication to be used for verified tanks B&M operations 30th Sept-09 Support from B&M operations is required. 6 A procedure to be made and followed for PLT to IOC Sahar *Procedure to be made Six Sigma team 15th Sept-09 B&M operations to support Solution Implementation Action Plan ControlImproveAnalyzeMeasureDefine Microsoft Word Document Microsoft Word Document Microsoft Excel Worksheet
  • 35. HPFR BPMR HPFR BPMR Digital thermometers used for all products, including ATF. Temperature displayed while probe is in liquid. Least count 0.1 Deg C Reported in two decimals. More accurate Mercury thermometers, dipped in sample bottles. Least count 0.5 Deg C. All product delivery lines outside refinery have Mass flow meters MS/SK HSD delivery lines to installation have the mass flow meters, which are un utilized from the day of installation. Positive isolation (spading) of all lines connected with the tank/pump, except the one that is delivering is done as a procedure for all white oils. No spading done. The practice was existing prevoiusly(10 years back), which has been slowly discontinued. While Delivering to OMC, marketing bears the loss gain. While delivering to OMC, refinery bears the loss/gain. ControlImproveAnalyzeMeasureDefine
  • 36. SR NO DESCRIPTION OF SOLUTION ACTION POINTS BY WHOM BY WHEN SUPPORT REQD. 7 incorporate Density readings, previous PLT density (line content quality) in LD book This shall be a part of the standard procedure, mentioned in pt no-14 Six Sigma team 15th Sept-09 B&M operations to support 8 New loss control department to be set-up. Scope of work for the department to be finalized. GM(0) 30th Sept-09 Request from B&M section head, to GMO for the need 9 BPC S'cruz to witness gauging and line-up *Supplies to talk to Aviation SBU, for BPC Scruz to witness. S&B department head 15th Sept-09 ED Logistics, ED aviation 10 Retention sample testing /comparison with IOC and to be recorded in LD book for periodic review 11 Charge hand/Officer to train/conduct surprise checks *After surveyor is appointed, he will witness the gauging 12 IOC to convey the FRF to PH within 6Hrs *It has to be incorporated as a standard procedure, with concurrence from Avition SBU, and industry. S&B department head 30th Sept-09 ED Logistics, ED aviation, GMO Solution Implementation Action Plan (HIDDEN) ControlImproveAnalyzeMeasureDefine
  • 38. LOSS FACTOR COMPARISON 1110987654321 1.5 1.0 0.5 0.0 -0.5 Obser v at ion IndividualValue _ X= 0.394 UCL= 1.405 LCL= -0.616 I Char t of st age 554943373125191371 2.5 2.0 1.5 1.0 0.5 0.0 -0.5 -1.0 Obser v at ion IndividualValue _ X= 0.536 UCL= 1.671 LCL= -0.600 1 1 1 I Char t of Loss Fact or _ 1 ControlImproveAnalyzeMeasureDefine
  • 39. PROCESS MANAGEMENT Project Y Metric UOM Respon sibility Frequency of data collection Type of Control Chart What to respond Who will respond Corrective Action to be initiated PLT Loss Loss Factor %(On Qty del in MT) Shift Officer Every Transaction IMR Loss Factor>0.3 Shift Officer Surveyor to re-confirm figures at receiving end Vital X’s Audit Surveyor log NA NA S&B Section head Once a week IMR Deviations from SOP’s Shift Officer Review the SOP’s for migrations etc. Density Diff (Ref QC Vs IOC tank) Diff g/cc Shift Officer Every Transaction IMR >0.0025 Shift Officer 1)Surveyor to check recipient density. 2)Testing of refinery retention samples 3)Surveyor to cal effect of heel, l/s density Difference in dip (Manual Vs Auto gauge) Dip diff cms Shift Officer Every Transaction IMR Diff in mass >12 MT Shift officer Verify the correctness Diff in Temp (Manual Vs Auto gauge) Temp diff Deg C Shift Officer Every Transaction IMR Diff in mass >12 MT Shift officer Verify the correctness ControlImproveAnalyzeMeasureDefine
  • 40. BENIFIT ANALYSIS Period April 2008 to Feb 2009 April 2009 to 10th Sept-09 Total Loss while delivering to IOC Sahar in MT 1872 495 Loss Factor in % 0.596 0.393 AVG RTP of ATF (Duty paid) for the period, Rs./MT 39696 25942 Total Financial Loss for the period Rs. Crores 7.43 (9 Crores per annnum) 1.28 (3.1 Crores per annum) – savings of 59 Million INR/ 1.2 Million USD per annum) Total financial savings envisaged by bringing down the loss factor from 0.59% to 0.3% In Rs Crores 3.7 0.97 ControlImproveAnalyzeMeasureDefine
  • 41. INTANGIBLE BENIFITS •The system adapted in ATF PLT can be extended to all other products •The reduction in overall loss, will reduce refinery loss, improve the PRISM parameter of F&L. ControlImproveAnalyzeMeasureDefine
  • 42. 52

Editor's Notes

  1. To use the the CTQ Drill Down Tree above: 1. Drill-down into your CTQ (Big Y) to determine key drivers (little y’s) and their process and input drivers (X’s) 2. Evaluate the amount of IMPACT each driver (y) has on your CTQ, and the CONTROL you have to change each driver (y) 3. Select the key driver (y) to focus on for the rest of the project. Note, “y” is measurable could be a characteristic about the main process could be a characteristic of a sub-process For the CTQ Translation Matrix:
  2. You may need more / less boxes than highlighted on this template. You can add / delete as necessary for your project. When identifying Supplier(s), consider who starts and/or provides input to the process. When identifying Customer(s), consider who ends the process and/or is the recipient of the output.
  3. These Change tools are optional. Another alternative you can use is a “Threat / Opportunity” matrix.