Using LP Models To Sharpen Aim At Hydrocarbon Supply Chain Target
It’s time that we shift our focus away from the doom, the gloom, the fear, and the uncertainty of today’s industry news. Flip to the Comics section for a moment in your mind. In the first panel, picture a distraught teenager, feeling alone. In the next panel, we see that teenager’s astonished face as The Man of Steel, Superman, puts his hand on their shoulder and says, “It’s never as bad as it seems.” The next panel continues with Superman grabbing the teen’s arm and saying, “You’re much stronger than you think you are. Trust Me.” The final panel shows the teen turning to embrace The Man of Steel with a newfound confidence. That strip is from All-Star Superman by Grant Morrison and Frank Quitely, a comic book series that was published by DC Comics in 2005.
None of us is Superman, but we could all do with a sound dose of his realistic and positive advice, “It’s never as bad as it seems. You’re much stronger than you think you are. Trust Me.” We’ve stared down the bad and ominous in our industry in the past and we are called upon to do it again. We cannot lose sight of the fact that we have the skills, the tools, the intelligence, and the determination to navigate the current circumstances nimbly and make profitable decisions in the short and long terms. The question is not “if”, but rather “how” we go about it.
Don’t Start from Behind
The most important aspect of “how” is to determine the most profitable path and demonstrate the resilience necessary to progress toward that positive outcome. The first objective then is to confidently set the target for what is most profitable. Once the target is set, clear action can follow to achieve it. The potential problem then becomes: Is the target truly the one that will achieve the greatest results? Michelangelo, the Renaissance artist, said, “The greater danger for most of us lies not in setting our aim too high and falling short; but in setting our aim too low and achieving the mark.” So, ask yourself first, “Are you confident the target you have set is the largest achievable goal?” and second, “How is your aim?”
Sharpen Your Hydrocarbon Supply Chain Target Setting
As discussed in the first blog in this series, The Value Spaces In The Hydrocarbon Supply Chain (HSC), the value space for planning is in identifying optimized decision drivers for crude selection, operating conditions, stream dispositions, product blending, and demand allocations. The results and the confidence in these decision drivers are only as good as the tools that are used to identify them. In the planning space, the LP model is one of the primary tools used for this task. In the current environment of unit turndowns, different feeds, operating constraints, deferred maintenance, and the like, here are questions LP users should be asking:
- Is the LP model capable of handling these conditions that are drastically different from its original design and tuning?
- Does the model structure follow the best modelling practices and is there internal consistency to this structure?
- Are the key model components, like assays, process unit sub-models, and product blending, shared and consistent across all HSC tools?
These and other considerations all impact whether the target is the “optimum target”. A second set of skilled and expert eyes can provide the confidence and/or improvement recommendations to ensure that your HSC tools are sharp, efficient, and ready. This is an investment that is returned multi-fold through sustained value capture and confident direction.
Ensure Your HSC Aim Is True
Concurrent with sharpening your HSC tools to ensure the right target is the need to ensure that your organization can efficiently and effectively use these tools to determine targets and then execute “plans” that will achieve targeted results. This step helps to “perfect your aim” as well as to monitor and agilely adjust performance against the goal. Questions such as the following should be asked:
- Are your present work processes for these critical decision drivers like crude selection and operations planning “fit for purpose” in the current environment?
- Do you have a timely way to monitor and adjust your performance?
- Do you have appropriate KPIs to consistently measure performance?
- What do you have in place to quickly “learn” and acclimate your process?
- Are you performing “stress and scenario” tests on your plans to ensure robustness?
- Are you effectively communicating the decision drivers across the organization to accomplish the desired goals?
An independent review of these work processes is critical to migrate from a “task-oriented” focus to the “opportunity-identification” focus that is demanded to achieve optimal results.
Becht Is Standing Behind You To Help You Succeed
We are not Superman, but we are standing behind you to help you succeed.
Bring us your challenges. Becht has a wealth of knowledge and experience through a team of 1,500 industry leaders and subject matter experts and provides a full lineup of services and resources in Engineering Solutions – Bringing the Owner’s Perspective, Plant Services – Delivering Expertise To The Field, Software Tools – Leveraging Technology and Human Performance – Maximizing Your Workforce’s Capabilities.
The Strategic Business Planning group assists clients in reviewing or improving supply chain tools like LP and scheduling / blending models, enhancing supply chain work processes, identifying and implementing asset improvement opportunities, and understanding risk impacts and economic and technical viability in volatile markets.
Becht is ready to help you sharpen your target setting and perfect your aim to capture the greatest value possible. For more information on how Becht can help you succeed, please contact us.
In future installments of this series, Becht will provide detailed focus on specific supply chain elements, applications for increasing value capture, and expanding your value space.
- Strategy and Supply Chain: The Future is Now
- Supply Chain Models: Complexity versus Quality
- Constraints: Are You Seeing the Full Potential?
- Decide Before It Happens: Integrated Risk Mitigated Scheduling
- Supply Chain Optimization is People Too
