FIT Service Specialty: Improving Planning Procedures

To enable the refinery to maximize efficiency and profitability, FIT provides specialized consulting services. Successful refinery operation depends on effective planning and scheduling to provide a mechanism for the refinery to meet its material and financial commitments while ensuring a reliable, safe operating environment. In a well-run refinery, the planning and scheduling process is the key to the decision process, which starts with strategic and business planning and ends with production execution and performance analysis. Ineffective planning prevents many refineries from achieving their potential and, in today's economic climate, can mean the difference between survival and failure.

FIT provides a service whereby seasoned FIT planning professionals assist the client to evaluate existing planning operations for efficiency, effectiveness, and support of refinery operations. The FIT planning procedures improvement program also strives to guide the client in maximizing the benefits of modern planning systems, using mathematical programming, simulation and other technologies, as appropriate. The program has a first and second step: an audit, where one of the key objectives is to identify areas for improvement in existing models, as well as to identify applications where the use of new technology and better modeling techniques will provide more reliable planning and more profitable refinery performance; and the second step, a mentored program for improvement. Some clients perform just the first step as an impartial means to validate areas for change, if internal resources are available to help facilitate required changes.

FIT Consultants empower the client by providing a comprehensive planning review and audit.

The planning audit reviews the current planning process and evaluates how well it meets current and expected future business needs. It covers the following specific topics:

• Expectations from the planning process.
• Sources, timing and reliability of planning information.
• Data acquisition process.
• Timetable of the planning process.
• Planning software used.
• Effectiveness of the planning model.
• Distribution of the plan.
• Use of the plan.
• Relevance of the plan.

Expectations from the Planning Process

FIT consultants meet with key management personnel to define expectations from the planning process and determine how reliably those expectations are met. The outcome of these interviews provides guidelines for the remaining work.

Sources, Timing and Reliability of Planning and Scheduling Information

The FIT consultants meet with key marketing, supply, planning, process operations and engineering support personnel to understand the nature, timing and accuracy of planning data used, as well as any recognized deficiencies in the data that, if corrected, could improve the effectiveness of planning.

Data Acquisition Process

The FIT consultants review the processes by which data identified earlier flows from the sources into the planning system. Potential improvements to ensure timeliness and data integrity are identified and defined. The consultants pay particular attention to redundant data entry and other activities that can compromise data integrity.

Timetable of the Planning Process

Generally, the full planning process begins and ends at the corporate office, where financial, marketing and supply data are developed and maintained. The FIT consultants review the timetable of the planning cycle, starting with dissemination of planning premises from the corporate office and ending with acceptance of the refinery operating plans. The consultants seek to identify delays and bottlenecks and to determine how the process can be improved to better satisfy corporate and refinery needs.

Planning Software Used

The consultants review the planning software and systems currently in use to ensure that they are capable of supporting refinery and corporate needs. Existing software is studied to determine how well it can meet the needs identified earlier, including appropriateness for the task, robustness, and ability to generate useful timely results. The consultants will recommend software changes, additions or enhancements as appropriate to improve the process.

Effectiveness of the Planning Model

The FIT consultants review the planning model(s) to determine its/their effectiveness in meeting the expectations already identified. Specifically, the following determinations are made:

1. Is the purpose of the model clear? Planning models may be intended for various purposes, including strategic decision-making, routine planning, feedstock selection or ad hoc studies. Using a model designed for one purpose to meet a different objective can give misleading results.
2. Does the model provide sufficient detail? This is usually not a problem where a well-established planning operation exists. Nonetheless, it is important to make sure all bases are covered.
3. Does the model provide flexibility to meet all existing needs? Frequently, models have evolved over time, with more and more constraints added to match actual operations more closely. These constraints can limit the flexibility of the models to the extent that major profit opportunities are missed.
4. Is the model easy to understand? Sometimes models are so complex, after being developed by a series of planners over the years, that the current planning staff cannot fully understand the rationale behind results. Use of such models is dangerous to the financial health of the organization.
5. Is the model up-to-date? Without a routine updating process, models drift further and further away from representing current potential. Of particular concern is whether crude assay and process yield data are current. Out-of-date models lead to unreliable plans and missed profit opportunities.
6. Will the model be adequate for foreseen future needs? An up-to-date model can soon become obsolete. Planning is concerned with future needs: hence the model must be able to represent known future needs.
7. Does the model generate realistic plans? For routine planning models, a test of realism is whether the plans can be used to generate refinery schedules without too much deviation. "Backcasting" is another technique used to evaluate plans, but it needs to be used with caution, since refineries must be able to react rapidly to changing opportunities rather than slavishly following the plan.
8. Can plans be updated or modified easily? This is partly a function of the planning process, and partly a function of the model and reporting system used. Updates to plans are needed mainly in response to process problems, supply problems and marketing opportunities.

Other issues may appear during this part of the audit. Frequently, such issues prove even more valuable than those listed above.

Use of the Plan

The FIT consultants investigate the processes by which the plan is implemented. This part of the audit is concerned with ensuring that the systems and procedures are in place to enable the various users of the plan to take appropriate action. Follow up procedures are reviewed and recommendations made for improvements.

Relevance of the Plan

Frequently, when the consultants review the use of planning results, it appears that some users find the plans irrelevant to their specific needs. Although this information should have appeared earlier in the audit, it is valuable to address it specifically at this time. Results of this review can lead to changes in the planning process, the model(s) or the reporting procedures.

From information gathered in the activities outlined above, the consultants:

1. Benchmark existing procedures, systems and models against industry peer practices. This benchmark provides a quantified measure of potential improvements in over twenty areas to insure that management and refinery customers are provided with the information that meets their needs.
2. Estimate the economic value of the proposed changes, based on information supplied by the refinery personnel and that obtained from existing plans. The value comes from better utilization of refinery resources to maximize the profit generated by the refinery.
3. Recommend further requirements for the future to maintain the standard of excellence achieved.

Audit results enable either the FIT planning professionals or client professionals to prepare a plan of continuous improvement, with economic benefits clearly defined at each step along the way.