The results
The client agreed on a plan to achieve a reduction of inventory by 25%, worth $50million one-off cash benefits with additional opportunity benefits worth $6million/year.
Success stories
Optimization of capital employed
An independent Middle Eastern oil refining company asked KBC to advise them on inventory management to reduce crude oil and products stocks through the use of international standards and regional benchmarks.
The challenge
To reduce working capital by aligning supply chain strategy and identifying constraints in the planning processes, refinery scheduling and off-sites operations processes, over the entire enterprise of two refineries, an olefin plant, aromatic plant and key product depot.
Solution
KBC benchmarked the 150 storage tanks throughout the client facilities against peers in same region and worldwide.
KBC completed statistical analysis of data that led to challenging the high heels (undrawables) and high tops (ullage) philosophy of the site as well as the identification of excess inventory as result of incomplete application of best practices and good operating procedures.
KBC identified areas of excess inventory and developed hand-over inventory targets for each category of hydrocarbon on the site.
The streamlining of corporate marketing and planning personnel with refinery planning, scheduling, operations and off-sites personnel, allowed KBC to align the supply chain strategy and resolves some of the constraints.
Recommendations provided for reduction in capital employed, included both short term implementable ideas as well as longer term items requiring further technical work.
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