FIT Service Specialty: Improving Terminal Utilization

To enable the Company to align terminal utilization with the supply chain, production, and distribution plans to maximize profitability, FIT provides specialized consulting services. Successful terminal utilization depends on understanding marketing plans and distribution alternatives to provide focused throughput goals by product for the terminal. In a well-run terminal, business goals are clear and visible to take full advantage of flexibility in load rack equipment and automation and information systems to achieve the throughput plan. The terminal management system produces information that can be compared to metrics for performance analysis. Ineffective terminal utilization can diminish the value of upstream process improvements by increasing cost to distribute product and resulting in missed marketing opportunities to sell specialty or short run products particularly as margins and pipeline availability shift. In today's economic climate, this can mean the difference between survival and failure.

FIT provides a service whereby seasoned FIT planning professionals assist the client to evaluate existing terminal utilization for efficiency, effectiveness, and support of marketing and manufacturing goals. The FIT planning procedures improvement program also strives to guide the client in maximizing the benefits of load rack automation and terminal management systems. The program has a first and second step: an audit, where one of the key objectives is to identify the market opportunities to offer new products, grades, or better meet the needs of customers as well as to identify areas for improvement in configuration of equipment and systems; 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 audit and preliminary strategy development.

The process engages the organization to understand critical success factors, business drivers, and future needs and evaluates how well current equipment, systems, and organization support business requirements. It covers the following specific topics:

• Expectations from the Audit & Business Requirements
• Internal & External Distribution Channels
• As-is Organization & Systems
• Potential Business Improvement Projects
• Metrics for validation

Expectations from the Audit & Business Requirements

FIT consultants interview key management personnel to define expectations from the audit and to understand critical success factors and business drivers. The outcome of these interviews provides guidelines for the remaining work and will likely encompass such items as regulatory compliance, customer satisfaction, product-mix, and throughput.

Internal & External Distribution Channels

FIT consultants interview key marketing and terminal personnel to understand the channels currently in use to deliver product to customers focusing on flexibility, profitability, and optimization. This component also identifies the role of 3rd party distribution channels and limitations of company-owned terminal facilities. Topics may include marketing e.g. further drill down of customer needs and operations e.g. throughput limitations from pumping systems, rack layout, or vapor emissions.

As-is Organization & Systems

FIT consultants review the organization and systems in place to satisfy business requirements focusing on future needs, ideas for improvement, and availability of information to validate the path forward. This component evaluates the effectiveness of instrumentation, automation, and information management systems in terms of reliability, usability, and completeness.

Potential Business Improvement Projects

FIT consultants identify a preliminary portfolio of business improvement projects to guide dialogue regarding the benefits and efforts required to achieve business goals. FIT or client professionals can then take the portfolio and develop project justification, cost, timing, and resources required to implement.

Metrics for Validation

FIT consultants define a balanced scorecard ensuring that progress is measured and displayed to the organization in a meaningful way. The scorecard captures the audit findings in a baseline and becomes the metric for future improvement.

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

1. Engage the organization in understanding critical success factors and business drivers that will guide change and improvement.
2. Identify and consolidate proposed changes based on information supplied by the marketing and terminal personnel and that obtained from existing plans. The initial benefit comes from better understanding of utilization of equipment, systems, 3rd party relationships, and resources to maximize the profit contribution of terminal facilities.
3. Provide the starting point for measuring improvement in a standard way that reinforces the goals of the business.

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.