How a Superior Materials Management Process Impacts your Bottom Line

We know through extensive industry research that, on average, a complex turnaround event yields between 33 and 40 percent of effective utilization of craft tool time. When we analyze that remaining 60-67 percent, the reactive materials management impact can be as high as 11 percent. Reducing that 11 percent even a couple of percentage points can add up to millions of dollars in budget savings.

Here’s an example of that breakdown:

On an $86 million turnaround event, the craft time lost due to poor materials management adds up to $9,460,000. The direct and indirect cost impact totals approximately $13.1 million.*

If we can improve the effectiveness of how materials are handled from the project’s inception, the result can provide millions in cost savings. While there are many components that have to work in unison for you to see significant results—from the timing of supplies being ordered, to how they’re stored and tracked throughout the lifecycle of the TAR—your materials management organizational structure offers a key area for improvement.

In order to understand how to impact budget dollars of this magnitude, you will need to have a clearer picture of our process and approach to materials management.

Materials Management Process

We begin each engagement by assessing the current situation and identifying opportunities for improvement. This is the assessment phase of the program, which allows us to understand how our client is currently managing materials for optimal integration into Onpoint’s Materials Management Program. An Onpoint subject matter expert spends time meeting with the materials management core team to understand current material process flow, and we discuss current and past issues or pain points related to planning, procurement, warehouse and logistics.

Prior to the Turnaround, Onpoint’s trained and qualified Materials Management Team begins executing a series of logistical and pre-planning tasks to ensure success during the project. For example, our TAR Materials Manager receives daily downloads of material purchase orders from procurement into TrackPoint, our proprietary and intrinsically safe software program, allowing the materials team to know what materials are expected. Every step of this phase in the project allows for transparency and visibility, removing much of the confusion and chaos that surrounds the purchasing, storing and tracking of materials.

Another important aspect of our Materials Management Program includes kit development. Some will be pre-kitted from the vendor, but everything else is kitted upon arrival at the TAR warehouse. Finally, during turnaround execution, our process allows for a seamless transfer of materials from staging areas to the appropriate areas at the needed time. For example, the Materials Coordinator requests materials for installation one shift prior to work being performed per the turnaround daily work shift schedule. Then, the TAR Warehouse Coordinators pull and deliver the kits to the satellite materials staging areas and the new location is recorded in TrackPoint.

We have learned through our years of experience that a better process equals a better outcome. This is why each component of Onpoint’s Materials Management Program has been designed to increase efficiency and maximize craft time—all of which positively impact your bottom line. To learn more about engaging our Materials Management Program on your next turnaround or capital project, call 1-800-630-1347.

*Based on a 1,500 FTE per shift, $72 per loaded man hour, 40 day event

By | 2018-10-26T18:04:17+00:00 10/18/2018|0 Comments

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