KBC, the leading technology-based consulting company for the energy and chemical industry, believes that in the current, volatile, economic climate operational excellence will deliver results sustainably.
A recent survey by KBC and IQPC of over 100 companies in the refining and petrochemical industry has revealed that only 25 per cent are leading the charge in implementing an operational excellence program despite 79 per cent indicating that an operationally excellent mind-set would result in a safer, more reliable and profitable operation. The survey was commissioned to understand how leaders are responding to current market conditions and setting themselves on a path to capture and sustain their lead. Armed with this information, KBC can advise the other 75 per cent on their best course of action to catch up and become leaders themselves.
“Companies in this industry understand that operational excellence makes them more competitive, lowers their cost of capital and improves their ability to grow market share – which puts it high on their agenda. And 25 per cent of those we surveyed are clearly racing ahead of the pack with their vision of operational excellence. This will really deliver results sustainably in the current volatile market”, explains Shane Fitzsimmons, Global Practice Executive - Strategy and Business Excellence, from KBC.
Despite this widespread understanding of the importance of an operational excellence approach, many do not have an operational excellence mind-set (what KBC calls the “OpX DNA”) and are not yet ready to adopt the necessary technologies to succeed. 65 per cent said they were not ready for artificial intelligence technology; 38 per cent indicated they were unprepared to cope with Big Data challenges and 41 per cent were not ready to use Industrial Internet of Things (IIoT) technologies.
Fitzsimmons continues, “Refinery and petrochemicals operations are highly complex and inherently risky. Having the OpX DNA together with reliable data and accurate analytics has the potential to transform operations. Detailed access to the current operation together with an understanding of the opportunity for improvement, all in economic terms, will give executives the necessary insight and incentive to build an organizational capability to drive performance, streamline compliance and improve safety.”
KBC stresses that there is not a “one size fits all” solution that can be adopted. Operational excellence challenges for one business may differ from another depending on the business environment in which they operate and the resources and capabilities at their disposal.
“The design of operational excellence programs should be tailored to each asset’s starting point and aligned to the targeted outcomes. The program should focus on specific tangible goals and evolve over time. Executives should, among other things, ensure that sound OpX principles are embraced throughout the organization, and consider the balance between tools and capabilities in order to achieve sustainable results”, concludes Fitzsimmons.
An in-depth report, titled: “Operational Excellence in Refining and Petrochemicals – Trends, developments and solutions affecting operations leaders” further explores the issue and can be downloaded here.