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Case Study 2
"Cost reductions in a petro-chemical company"

Work Structuring Ltd was requested to help with the restructuring of 'Basic Chemicals and Intermediates' (BC&I), part a large petro-chemical complex. The plants were dispersed over an area of several square miles and the organisation had been designed around the geography of the site. BC&I were part of the Chemicals Division of the parent company, and were tenants on the site which was owned by the Oils Division. Very different strategies drove each division with Chemicals being a relatively small scale specialist chemical production facility whilst Oils were a volume producer of a few products.

The Work Structuring study was occasioned by the need, for safety reasons, to build a centralised control room for the BC&I plants.

The plants were unionised and initially the union resisted the study, but after the first few meetings with them, they decided that the "approach made sense" and their attitude changed to one of support. A joint union and management team was set up and chartered to carry out the Work Structuring Study with the assistance of a WSL Consultant.

'Transformation Analyses' were carried out on all the BC&I plants and this was followed by 'T.I.E.D. Analysis' between the various Basic Transformations. The 'T.I.E.D. Analysis' showed there to be four groupings of plants:

  • Steam Cracker and associated plants (SC Group),
  • MEK and associated plants (MEK Group),
  • Polymer production and associated plants (Poly Group) and
  • Off-sites

This grouping cut across the existing organisation structure, especially as part of the 'Poly Group' was run by the Oils business.

A new organisation was derived around these groups using the 'Leadership Index' methodology. It was discovered that 30% fewer operators were needed on shift during weekends and nights due to the reduced need for interfacing with external groups. The maintenance, engineering and other organisations necessary to support the operation of the BC&I plants were then identified and their organisation redesigned.

An 'Ideal Model' was thus derived for the operation of the BC&I plants. This was significantly different from the existing organisation in that:

  • the new model was designed around process linkages versus the existing geographic split,
  • the maintenance and support organisations were aligned with and in some cases directly reporting to the manufacturing management as opposed to the traditional functional organisation,
  • the shift pattern was altered to take account of the reduction in staffing during nights and weekends and
  • the layout of the control room was differently configured to that previously envisioned.
The Team then examined the 'Ideal Model' and decided that a few of the issues raised could not be resolved in the time-scale of the Control Room Project (e.g. transferring ownership of part of the 'Poly Group' Operations from the Oils to the Chemicals Division). They derived a 'Pragmatic Model' which was then presented for endorsement by both senior management and the union. The 'Pragmatic Model' was thought to obtain 85% of the benefits of the 'Ideal Model'. Endorsement was given and the 'Pragmatic Model' was implemented. According to the Chemicals Division the restructuring has produced an average saving of 18% in the manufacturing cost per barrel of product. However the 15% of the 'Ideal Model' that was not implemented has been estimated to be worth several hundreds of thousands of pounds in costs each year and an ongoing move towards the ideal is underway.
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