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Value chain optimization

Value Chain Optimization

Enabling effective commercial optimization of the business, value chain optimization involves alignment of assets and the supply chains across the Energy and Chemical industry.

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What does value chain optimization mean for your company?

Applicable to upstream oil and gas, liquefied natural gas (LNG), oil refining, petrochemicals and power utilities sectors; value chain optimization delivers the major step change in profitability that the industry is seeking.

Significantly improved economics, in terms of more revenue, at less cost with higher capital efficiency. By delivering a fast-automated response to changing asset and market conditions, value chain optimization allows rigorous adherence to operating plans and agile response(s) to dynamics and disturbances.

The “alignment” of asset and supply chain optimization is a mindset shift from inward orientation focused on “product” and own organizational needs, to outward orientation focused on market needs and customer experience.

A blueprint for executives seeking a major step change in profitability through integrated asset and supply chain optimization

Companies are being forced to adjust their portfolios and operating models; digitalizing deeper and faster to improve economics of marginal assets. Many businesses struggle with operating plan execution and efficiently linking operating plans to production schedules.

The value to the enterprise of value chain optimization is significant. Squeezing down on the gap between potential and realized margin, thereby creating more utility for the end customer and outmanoeuvring competition. Furthermore, value chain optimization supports development of a motivated and informed workforce, and the promotion of a culture of profitability.

The Value Chain Optimization Manifesto outlines how to solve this at scale and can be applied wisely, with practical solutions that demonstrates value. It is based on deep hands-on experience, alongside our parent Yokogawa, working with the world’s largest and most complex companies in the Energy and Chemical industry.

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Your business is changing drastically in a new world of digital platforms and disruptive digital technologies

Digitalization at scale requires a purpose. Only with a purpose can clear and deliberate actions deliver transformative outcomes. That purpose is value chain optimization.

Digital transformation (DX) is the application of digitalization to value chain optimization, enabling the whole business to have an outcome orientation, be adaptive and responsive as well as collaborative and smart.

"Think big, start small, scale fast, drive adoption is critical in itself for driving change management. The manifesto, describes the case for change and how no matter where you are on the journey, the earlier stages must be taken. Crucially it also has some accelerators that will rapidly connect the unconnected; massively advancing your multi-year journey to achieve safe, reliable, optimized and automated assets"

Duncan Micklem, Executive Vice President, KBC

Maximize return on capital employed (ROCE) as efficiently as possible

A stronger strategic focus on key resources and capabilities to best deliver the output.
A motivated and informed workforce, and promotion of a culture of profitability.
Lower inventory costs/higher inventory cycling

Rigorous adherence to operating plans

Agile response(s) to market dynamics and asset disturbances
Increased mechanical availability of assets