An Perspective On Quality

Volume 10 Issue 1 • Winter 2005

Refinery Turnaround

2

is published twice yearly by

Ergon’sSystems & Performance

Improvement Dept.

Please send any correspondence to:

Kathryn SteenErgon Systems & Performance

Improvement Dept.PO Box 1639

Jackson, MS 39215-1639Fax: (601) 933-3370

E-mail: synergy.focus@ergon.com

Visit web sitewww.ergon.com

TomIsonhood

HappyNewYear!QUALITY POLICY

Product Quality is our basic

business strategy. It is our policy to

provide products and services of

the highest quality level, which will

result in satisfied customers. Only

100% conformance to customer

requirements will be acceptable.

We will accomplish our goal

through actively involving and

training our employees, obtaining

commitment from our suppliers,

conforming to appropriate

standards and establishing and

monitoring objectives. Application

of these activities will lead to

the continual improvement of

everything we do.

S&PID would like to thank everyone who

participated in this issue of

We welcome and encourage your comments and questions regarding

this publication.

Please use our new website surveyatwww.ergon.com/surveys.

Dear Readers,

The holidays and year’s end mark a time for gathering with family and friends. For many, the beginning of a year brings the setting of goals and new resolutions. It also marks a time to reflect upon the past year. In thinking over the year 2004, one of the first thoughts is of the many changes and achievements experienced by the Systems & Performance Improvement Department. These changes and achievements include SPID assisting with the restructuring of the Quality Council and adding new employees.

Ashley Bryant, David Wigginton and Charlie Bennett were welcomed to the SPID team. Ashley joined us in September, 2004 as the Systems Controller and manages the corporate document control program. David Wigginton joined Ergon in January, 2004 as a Performance Engineer and works with data and statistics to assist companies with their quality programs. Most recently, Charlie Bennett joined SPID as Management Systems Consultant. Charlie coordinates the overall implementation process of management systems within the Ergon family of companies. The SPID staff is one of our greatest resources and an integral part of Ergon’s success. Each person strengthens our department and plays a vital role in helping us reach our goals. We are truly fortunate to have such capable employees on our team.

SPID has also benefited from many former employees. Special thanks are due Mike Burnett for his past and ongoing contributions to Ergon quality systems. Even after leaving our department to manage the Petroleum Specialties Marketing Department, Mike continued as editor of the FOCUS publication. Thanks are also in order for Ricky Allen’s continuing support to our department. Ricky teaches quality management system classes and participates in Ergon’s internal audit team. Amy Taylor is to be recognized for her contributions to our department and for being a valuable part of the quality team. Amy left Ergon in October 2004 to join her husband, Brad, in Reading, Pennsylvania where he transferred with the Penske Corporation. I also need to take this opportunity to express my sincere appreciation to Ergon managers for allowing their employees to participate in Ergon’s internal auditor program. These men and women take on additional responsibilities as internal auditors without extra compensation because of their commitment to Ergon’s quality system. The success of our internal audit program depends on the generosity of these employees and their managers.

This new year brings about many challenges for SPID: continuation of the ongoing ISO 9001:2000 implementation processes for Ergon companies; ISO/TS 16949 compliance at Ergon Technical Coatings; new ISO implementation work at Lion Oil Trading & Transportation; implementation of a supervisor/management training program; and putting into operation an electronic document control system for select Ergon companies. This year, Ergon’s leadership will continue to develop, implement, and improve the effectiveness of its quality management system. Our quality management system, based on ISO 9001, is versatile enough to be used for all types

Editorial

continued on page 4

Leslie B. Lampton, CEO

Ergon Trucking Wins Again and Again

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Ergon Trucking, Inc. has distinguished itself for years by winning awards for excellence, safety and top performance in its class. Its record and legacy continue to grow with more acknowledgements in the industry for safety, reliability and service.

Please stop by Ergon Corporate offices, Building B, 1st Floor of Mirror Lake Plaza, 2829 Lakeland Drive, Jackson, Mississippi to see the newest additions to Ergon Trucking’s “Wall of Honors” and congratulate the ETK team! Recently awarded are the following:

• 2003 Safety Improvement Award Selected by the National Tank Truck Carriers, Inc. (NTTC) for maintaining a continuous record of improved safety in the operation of tank motor vehicles. This is the 6th Award of this category by NTTC to Ergon.

• 2003 Competitive Safety Grand Award Selected by the National Tank Truck Carriers, Inc. (NTTC) of Trucking Class 14 million – 18.3 million miles, in recognition of outstanding safety record.

• ConocoPhillips Service and Excellence Awards ConocoPhillips has awarded multiple and consecutive distinctions for excellence to Ergon Trucking, Inc. The awards they bestow are considered the top awards in the nation for bulk carriers. ConocoPhilips selects companies among four divisions of carriers based on product type.

ConocoPhillips awarded their top annual Division Awards in recognition of the following characteristics of Ergon Trucking, Inc.:1) It is an organization that has aligned its operating business to achieve the “ultimate in Product Delivery Service”.2) It is a company that consistently exceeds expectations along the entire product distribution chain.3) It is a business partnership that defines the true meaning of “Win – Win”.

• Superior Service Award and Certificate of Achievement: May 8, 2003,• Operational Excellence Award: November 3, 2004• Service Award for Lubricants & Specialty Products: November 3, 2004

• Modern Bulk Transporter: July 2003 An article featuring Ergon Trucking, Inc., Page 20 – 25: “Ergon Trucking uses Diversification to Drive Successful Company Operation”: http://www.findarticles.com/p/articles/mi- mocx/is_1_66/ai_106087260

• Outstanding Fleet Safety Record: 2nd Place, 2003 Selected by the Mississippi Trucking Association (MTA) for outstanding safety performance, over 2 million miles.

• Outstanding Fleet Safety Record: 1st Place, 2002 Selected by the Mississippi Trucking Association (MTA) for outstanding safety performance, over 2 million miles.

• Personal Safety Award: 2002 Selected by the National Tank Truck Carriers, Inc. (NTTC) of Trucking Class 13.5 million – 18 million miles, in recognition of outstanding safety record by entire Ergon Trucking, Inc. organization and personnel.

DavidPurvis

4

I read a story about a Scottish athlete in the 19th century who decided to enter a discus throwing competition. He made an iron discus based on a description he read in a book. What he didn’t know was that the discus used in official

competition was made of wood with only an outer rim of iron. His was solid metal and weighed three or four times more than those being used by other discus throwers.

According to the author, the man marked out the record distance in a field near his home and trained day and night to match it. For years he labored until he could break the record. Then he took his

iron discus to England for his first competition.

When he arrived at the games, he was handed the official discus. He easily set a new record, a distance far beyond those of his competitors. This man trained under a heavy burden and became better for it.

I just finished reading the final report from the National Transportation Safety Board (NTSB) relating to the I-40 accidents in May 2002. This was one of those heavy burdens that a number of people had to deal with over the last 21⁄2 years. The tragic loss of life will never be forgotten.

There is no question in my mind that the Quality Program we put in place in the mid- 90’s was the main reason our company was able to weather - such a major crisis. The training we go through daily to improve our program is invaluable.

Our burdens can make us a better company if we understand their purpose.

LeeLampton

and sizes of businesses, as evidenced by the variety of Ergon companies, and departments, registered or compliant to the standard. Companies can achieve maximum benefit from their registration or compliance certificate by ensuring their quality management system is aligned with their strategic goals. This alignment helps satisfy the full intent of the standard as well as address internal needs of these organizations – not just merely meeting external requirements.

There are many sources suggesting that the future is the “knowledge age.” The future will be controlled by businesses making the most practical use of it. Our time has come. Ergon’s application of quality principles, quality systems, investments in material assets and “human capital” provides a solid foundation for improvement of our business operations, profitability, and competitive positioning in the market place.

We look forward to serving you in 2005!

Perspective

Editorial continued from page 2

ASQ CertificatesCongratulations to three employees of Ergon Systems & Performance Improvement Department for recent certifications with the American Society for Quality:

• David Wigginton, Performance Engineer Certified Quality Engineer • Kathryn Steen, Performance Specialist Certified Quality Auditor• Ashley Bryant, Systems Coordinator Certified Quality Improvement Associate

Ergon is especially excited to welcome the people, their capabilities and facilities that joined our Family of Products and Services last summer. Specialty Process Fabricators, Inc. (“SpecFab”) is located at 2353 Haining Road in Vicksburg, Mississippi, among neighbors Ergon Maintenance Services, Inc., Magnolia Marine Transport Co., Ergon Terminaling, Inc. – Vicksburg and Ergon Refining, Inc. SpecFab has the talent, experience, facilities and equipment to provide solutions for fabricated equipment and integrated equipment packages from concept development through systems commissioning.

SpecFab’s core product offerings include equipment for process modules, lubrication systems, filtration and separation, chemical storage and forwarding, chemical injection, heat exchange thermal control, compressor and auxiliary skids, hydraulic control modules/panels, pressure vessels and industrial gas separation.

Among the engineering innovations and uncompromising integrity for which SpecFab stands are:1. Solutions engineered to reduce costs and time to site project completion2. Specialized project management utilizing tighter controls and a single Point-of-Contact3. Product diversity employing modules, specialty components, precision equipment4. Facility size, location and capabilities to design, manufacture and transport custom machines

5. SpecFab’s experienced staff is ISO-based in their business operations and management practices, with a documented and established Quality Control Program.6. In-house Certification to Liquid Penetrant Procedure, ASME Approved Certification, Hydro Test to 3,500 pounds per square inch gauge (psig), and authorizations to work on process and pressure power piping systems and unfired pressure vessels.

SpecFab’s design engineering and construction operations meet or exceed stringent code compliance with national and international professional and safety organizations. State-of-the-art engineering software is used to design components and

projects.

SpecFab’s management includes Robert Stokes, Vice President and Don Maye, Manager of Operations, based at the Vicksburg, Mississippi facility and Thomas Kibodeaux, Manager of Business Development, based in Houston, Texas.

SpecFab’s manufacturing equipment and facilities include four buildings, six cranes, cutting equipment such as Shear, flame cutter and power saws, Plate roll and press brake for forming, mills, lathe and radial drills for machining, welding equipment, milling equipment and painting equipment. An in-shop rail spur enables rail transport. Truck trailers and barges may also be loaded nearby.

Welcome, SpecFab. Ergon is proud to have your specialized capabilities and talent on our team!

For more information about Specialty Process Fabricators, Inc. please visit: http://www.specprofab.com

5

Welcome SpecFab KathyrnSteen

FuelGasConditioningUnit Instrumentation&ElectricalUnit

Ergon’s corporate engineering group serves the Ergon family of companies in a variety of ways. While the three Ergon/Lion refineries have their own internal engineering staffs, there are approximately fifty other facilities that rely on Corporate Engineering for their engineering support needs. When necessary, the department also supplements the internal refinery staffs for project management support. In fact, the department currently has active projects in all three refineries. Corporate Engineering’s primary responsibility is to manage capital projects at Ergon facilities. The department also provides technical support and a centralized avenue for technical consistency throughout the company.

Project management involves administering a project from the conceptual design through commissioning and startup. Ergon’s engineers work with facility staff and management to shape the technical aspects of capital projects to meet the operational needs of the facilities. A preliminary budget estimate is often required to verify that a project fits within the business strategy of the company. Once the project scope is defined, the engineering group begins the detail design process. This process includes gathering necessary data related to the facility, working

with vendors and manufacturers to specify new equipment, and utilizing internal design tools, such as Computer-Assisted Design (CAD) software to generate design drawings. These drawings can be reviewed by the facility and then released for construction.

The engineers are also responsible to verify that the design is in accordance with industry-recognized and regulatory-mandated codes and standards. As the design is finalized, Ergon’s engineers work with the facility to select contractors or use Ergon’s internal construction resources to construct and install the changes or improvements in accordance with the design drawings. Finally, partnering with the facility staff, the projects is completed and implemented into the facility’s processes.

While Ergon’s typical capital projects involve the process equipment and piping associated with many of Ergon’s facilities, corporate engineering can be exposed to a wide variety of project types. Some recent examples include constructing a new maintenance shop for Ergon Trucking, Inc. or assisting with the piping and equipment layout on an EMIS barge design. Most recently, however, Ergon Properties, Inc. has opened up

Corporate Spotlight

6

CharlieBuntyn

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continued on page 7

Charlie Buntyn, PEManager of Engineering

Scott BlackwellProject Engineer

Luke EmoryProject Engineer

Roland NorwoodSr. Designer

Larry LickDesigner

James HenleyContract Project

Engineer

Emille GriffingDraftsman

Becky AdamsAdministrative

Assistant

Danny WarrenCoop Engineer 2

Nathan WittIntern Engineer

Cody BaileyCoop Engineer 1

Marc Lauderdale, PE Staff Engineer

Engineering Organizational Chart

OpenProject Engineer

Tim PlunkettVice President Properties

Development

OpenEngineering

Becky AdamsAdministrative

Assistant

Emille GriffingDraftsman

Properties Development Organizational Chart

a whole new realm of opportunity for the group to support Ergon commercial real estate development projects. Ergon’s corporate engineers have been intimately involved in nearly ten major projects across the state of Mississippi including four Home Depot retail developments. In fact, as you can see on the organizational chart below, Tim Plunkett was recently promoted to Vice President – Properties Development to provide dedicated project management support to Ergon Properties.

Corporate Engineering is more closely related to Ergon’s other service groups such as Corporate Procurement, Corporate Maintenance, EMS, ISO Panels, and, most recently, SpecFab. Corporate Engineering works with these groups on a daily basis to administer capital projects and assist with day-to-day support needs of the facilities. They also work to provide engineering support to EMS and SpecFab for any external work that they may undertake.

Corporate Maintenance became a separate department from Corporate Engineering last year. This change was necessary to allow a dedicated staff for focusing on day-to-day maintenance

using the SAP maintenance tools while allowing an engineering staff to focus more on capital projects without being as involved with the facilities on a daily basis. The goal is for the relationship between these groups to be strong enough that this change will be transparent to their customers, the Ergon facilities and staffs. Corporate Maintenance will take responsibility for repairing or restoring equipment to original design specifications and to prevent failures through preventive maintenance programs. Corporate Engineering, on the other hand, will be involved in any modifications that require design changes or additions to the facilities.

Corporate Engineering currently consists of six engineers, three designers, and three engineering students from university cooperative education programs. There have been numerous staff changes in the last few years, and the department has many new faces. The goal of the department is to focus on satisfying customers at the facilities while maintaining compliance with applicable codes and standards as well as to ensure facilities operate safely and reliably in the years to come.

Corporate Spotlight continued from page 6

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Twenty-Five years of ServiceJerryBlancettCelebrates25Years

Ergon Trucking, Inc. holds a distinction in the trucking industry for combined years of service by our professional drivers, thanks to men like Jerry Blancett, of Petal, MS. On October 1, 2004, Ergon Trucking honored Jerry with a celebration dinner and traditional gift of a gold wrist watch. In 2001 Jerry earned the Mississippi Trucking Association’s (MTA) “Driver of the Year Award” as well as “Driver of the Year” from

XL Environmental Insurance Company, a nation-wide commercial insurer. Jerry joins two other Ergon Trucking Drivers in this honor:• Julius “Shorty” Lee (21 years service to Lampton-Love & Ergon) – 1998 Driver of the Year by both MTA and XL• Jimmy Dale Mitchell (38 years service to Ergon, retired)– 1995 Driver of the Year

An instructor from the North American Transportation Management Institute recently informed me that U.S. General Managers and Owners of Trucking Companies report a 150% - 300% turnover of their Driver/Operators and marveled at Ergon’s 14% track record. In an industry atmosphere of business challenges created by constant driver “churn”, he was impressed with Ergon’s continued ability to perform with a consistent 86% retention rate or better of drivers / operators.

Several of the 200 Ergon drivers and lease owner/operators have celebrated “double-digit years” transporting for Ergon, with

the average tenure of over 13 years (average tenure of our lease owner/operators is 10 years, and full-time Ergon drivers average a tenure of 16 years). They are knowledgeable and experienced drivers who are, on average, 47 years of age. I believe Ergon Trucking maintains such a distinction in finding and keeping good drivers because of the relationships we’ve built, the pay and benefits we offer, and strong support from the Lampton family.

When we asked Mr. Blancett about his loyalty to Ergon for the past 25 years of his career, he said, “Ergon has always treated me real good; it’s been a good and fair company to work for – a great company. Mr. Lampton has always treated me so well that I wanted to do the best I could for him and his company. The people have made all the difference for me: Jimmy Clunan, David Purvis and the employees at Petal (MS) Terminal – Johnnie Walley, Darell Little and Joe Chesney – have been great to me”.

Jerry’s routes have included all 48 ‘lower’ continental states, hauling propane for Lampton-Love, as well as several products for one of Ergon Trucking’s customers, Georgia Pacific.

Congratulations, Jerry, for your record of driving excellence and your commitment to Ergon, our products and our customers! We are honored to rely on men like you. Employees with your kind of dedication are how this company continues to succeed and prosper!

DavidPurvis

You wouldn’t drive a car for four years without changing the oil, but in a sense, that’s how a

refinery has to operate,” Richard Meeks, Ergon Vice President of Economics and Planning, says. “The plant runs 24 hours a day, seven days a week, 52 weeks of the year. The only opportunity to perform complete maintenance is during a refinery turnaround.”

A refinery turnaround is a major maintenance and inspection event during which large sections of the plant are systematically shut down and equipment is opened, cleaned, and inspected for integrity. A turnaround focuses on checking and repairing equipment that can’t be worked on while the plant is operating. The temporary shut down also provides an opportunity to integrate

new or upgraded equipment into the existing system – a task that cannot be accomplished at any other time. At Ergon’s West Virginia, Arkansas, and Mississippi refineries, a turnaround is scheduled every one to four years.

This massive overhaul demands two to six weeks of concentrated effort.

A turnaround can involve anywhere from 200 to 2,000 people working in 12 to 16 hour shifts; work is conducted 24 hours a day, seven days a week, until the process is complete. Personnel inspect every area of the refinery, from operators running robotic video cameras through sewer lines 20 feet underground to reliability engineers inspecting the tip of a 220-foot flare stack from a basket suspended from a crane.

“To an outsider, a turnaround looks like an ant mound,” said Meeks. “In reality, a turnaround is a well-planned, carefully orchestrated event that demands the highest level of organization and performance from every area of the plant.”

While some safety and environmental regulations govern maintenance and inspection requirements, Ergon’s primary motivation for turnarounds is operating efficiency.

As a unit fouls or equipment wears, it can lose capacity, resulting in as much as a 15 percent reduction in product yield. Energy and chemical efficiency and product quality drop.

“Deferring shutdown for just a few months could result in a product that no longer meets specifications,” said Neil Stanton, Refinery Manager at Ergon West Virginia. “Turnarounds restore the equipment to a ‘start of run’ condition, maintaining maximum capacity, efficiency, and product quality.”

Before turnaround ever begins, hours of planning are invested in the process. Inspection reports from previous turnarounds help identify the scope of work

and a “critical path” – the sequence of tasks that will determine the duration of the turnaround. Prior to setting foot in the refinery, hundreds of people must know exactly what they are supposed to do and exactly when they are supposed to do it.

But even after the most detailed planning, some decisions can only be made once the turnaround is in progress.

“We often have to determine whether an upgraded piece of equipment is needed during this turnaround, or whether it can wait until the next one,” Meeks explains. “We will always repair

or replace equipment that impacts safety. But with projects of opportunity, we have to consider not only whether we’re financially prepared for an upgrade, but whether the upgrade is worth extending refinery downtime to complete. We try to accomplish everything possible, since the next available

What goes around, Is turned around

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ThemassiveeffortthatkeepsErgon’srefineriesupandrunning

ADauntingProcess

“

What goes around, Is turned around

opportunity might not occur for four years.”

Shortly after a turnaround, the refinery manager and other turnaround team members hold a review meeting.

“We address any issues that affected the schedule, safety, or cost, and discuss how we can avoid those problems during future turnarounds,” said Craig Busbea,

Senior Refinery Engineer. “We are always improving the process.”

A successful turnaround requires a team effort from every function of the plant, as well as from hundreds of contract workers brought in to assist Ergon employees.

“A turnaround is incredibly demanding on those involved,” Busbea said. “It

means long hours for days on end.”Maintenance and engineering groups organize, plan, and coordinate work. Operations conducts the orderly shutdown of equipment. Technical, engineering, and inspection personnel specify equipment repairs, replacements, and additions. Environmental and safety personnel insure that work complies with safety procedures. Purchasing, accounting, and administrative groups provide back-office support.

The bulk of the work falls into in the hands of hundreds of skilled craftsmen. Welders and pipe fitters disassemble and reassemble equipment and piping. Mechanics work on pumps and compressors. Carpenters erect temporary ladders, scaffolds, and platforms to access equipment. Instrument technicians work on control systems, and electrical technicians work on high voltage power supply wiring and switches. Designers and draftsman illustrate how equipment should be fabricated and installed.

“Though the goal of a turnaround is to get the equipment down, repaired, and back up as quickly and efficiently as possible, the common theme in every action is safety,” said Busbea. “We follow stringent procedures that dictate every detail of how we execute this work.”

“During the actual turnaround, my job description expands to include ‘peacemaker,’” Meeks adds. “These

people are working 16 hour days for weeks on end, and it’s very stressful. Showing appreciation for the enormous effort our people put forth is an important part of the process.”

Because turnaround costs are high and no products

are manufactured during the process, the incentive to increase intervals between turnarounds is strong.

“The trend in refining is to make equipment more reliable, durable, and safer, in order to lengthen the run time between turnarounds,” Stanton explains. “New technological developments are similar to those in the medical field. Better diagnostic systems help determine problems more precisely, and new, minimally invasive methods execute repairs more quickly and with less recovery time.”

But while technology plays a role in the process, the key to an effective turnaround is the dedication and expertise of Ergon employees.

“By its very nature, a turnaround is rarely smooth,” Busbea says. “But thanks to our people, Ergon’s turnarounds are absolutely successful.”

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ThemassiveeffortthatkeepsErgon’srefineriesupandrunning

ATeamEffort

ANeverEndingChallenge

Implementation News

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Have you wondered at the history, status and goals of Ergon’s family of companies in relation to the International Organization of Standardization (ISO) Management Requirements and Quality Standards?

Ergon’s commitment to quality began in 1954 with Mr. Lampton’s work ethic, innovative thinking and business standard for customer satisfaction. The additional mechanism we espoused to demonstrate and maintain those system practices was ISO, the model developed over 40 years by the world’s best thinkers, industrialists, engineers and leaders, to identify and distill the “best practices” of the most successful enterprises around the world. The result of this 40-year analysis and research is the ISO Standard.

The ISO organization was founded primarily to develop a common set of guidelines for manufacturing, trade and communications in commerce and industry. The need arose, in part, to the International Electrotechnical Commission (IEC) pioneering work with other technology fields such as mechanical engineering. Today, ISO has grown to a network of national standards institutes from 146 countries working in partnership with international organizations, governments, industries, businesses and consumer representatives, as well as becoming a global bridge between public and private sectors.

Ergon is the Greek verb for “work”. How fitting then, that officials say the name ISO was also selected from a Greek word, isos, which means equal. This is interpreted also as meaning ‘the same’, ‘uniform’ or ‘standard’. For this reason it was decided at the outset to use a word derived from the Greek root word, so that in every country, whatever the language, the short form of the organization’s name is always “ISO”. In 1946, delegates from 25 countries met in London and decided to create a new international organization, of which the object would be “to facilitate the international coordination and unification of

industrial standards”. This new organization, ISO, officially began operations on February 23, 1947.The purpose of the ISO group was to develop a set of consistent guidelines (standards) that would truly be international and have the same meaning in Germany as they did in the United States, France, England, Denark, Japan, Egypt, etc. The purpose was for Customers and suppliers to use these standards to improve communication and thus enhance trade, locally, nationally and internationally.

The ISO “seal” (registration and compliance) can be compared to a “Master’s Mark” from craftsmen and artisans of centuries past, a modern-day standard of business and commerce that

assures buyers of a company’s commitment and active involvement to operate by top quality standards and continually improve the systems by which they do business.

The first ISO Standards were published in 1987, updated in 1994 and most recently revised in 2000. You will often see these identifiers used with ISO registrations and compliance of the 9000 series: ISO 9000:1987, ISO 9000:1994 and ISO 9000:2000. Ergon

companies began with ISO 9000:1994 and have “transitioned” to the newest standards, ISO 9000:2000.

Ergon has chosen to use the ISO standards as a method for implementing and maintaining Mr. Lampton’s commitment to excellence, the foundation of our management systems, which comprise responsibilities such as:• Documentation, • Management (of quality, customers, planning, authorizations, communications, reviews, etc.),• Managing Resources, • Realizing Products and Services, • Design and Development, and • Measurement, Analysis and Improvement.

Implementation News continued on page 13

KathyrnSteen

Hearty congratulations are extended to Ergon Asphalt & Emulsion, Inc. – Technical Coatings Division, for becoming registered to ISO 9001:2000 in May of 2004. “Ertech” joined Asphalt & Emulsion family of services or products in 1998 to produce a variety of industrial coatings and applications, including sound dampening insulation used as under-coatings for the automotive industry, ductile iron pipe coatings, foundation coatings, sizing emulsions, wax emulsions for gypsum wallboard application and composite lumber edge seals.

Ertech’s plant opened for business in Spring of 2000 and has grown significantly in production and demand. For example, the volume of packaged goods produced per month at Ertech in January 2003 was 78,000 gallons, and by October 2004 they

were producing 200,000 gallons. Likewise, they expect to double again in the next next two years, supplying 3 plants with automotive product among their other

services. Based in Memphis, Tennessee and managed by Richard Kirkman, Ertech employs 9 dedicated people who ensure that quality standards are part of every shipment.

The Ertech team is clearly not willing to rest on their accomplishments! They are next pursuing the additional quality compliance to ISO/TS 16949:2002 standard (Technical Specifications unique to the automotive industry). To this end they are working with The Productivity improvement Center (PIC) Group, an industry leader for Inspection,

Quality Engineering, Training and Consulting services to the automotive industry. The PIC Group is a registered ISO 9001:2000 company and an approved provider for many original equipment manufacturers (OEMs) in the automotive industry, including Honda and “The Big Three”: General Motors, Ford and DaimlerChrysler.

Recently a “Gap Analysis” was performed for Ertech to identify and prioritize the development of additional areas for “best management practices” unique to the automotive manufacturing industry. Joe Rigali of Dallas, Texas was selected as the consultant from The PIC Group to work with Richard and his team. For more info on TS 16949 please see the article on page 14. As a consultant for Ertech, Mr. Rigali also trained 15 members of the Ergon Internal Audit Team in auditing to ISO/TS 16949 standards. Internal auditors may now support and assist Ertech in their development and assessment processes for compliance. According to Mr. Rigali, “Richard Kirkman is an exceptionally sharp guy. He’s one of the best plant managers I’ve seen in 25 years of this business. Ertech is better than about 96% of the companies I’ve seen, and I’ve worked all over the world.” Mr. Rigali further commended Ertech for their commitment, site cleanliness, organization and innovation. What an honorable distinction, to be among the production plants that Mr. Rigali said, “remind me of the true spirit of quality endeavors. They’re living the continual improvement philosophy”.

Congratulations, EAE – Technical Coatings Division, Inc.!

Ertech Earns ISO 9000 Registration KathrynSteen

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Lefttoright:GregHunt,WayneChilders,KelvinBrooks,EugeneHunt,AlvertisColeman,RichardKirkman,FloydHughey,GlenSteinman,RandyCollins,CarrieMunns,andBarttVaughn

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Quality Tools

Root cause analysis “is a method used to identify and confirm the causes of performance problems or adverse trends and identify the associated corrective actions needed to prevent recurrence of the causes.” (Excerpted from web “Always Improving Performance” – Performance Technology Dictionary).

There are several quality tools that can be used to perform a root cause analysis. One of the most common of these is the Cause and Effect diagram; know also as the Ishikawa diagram after its creator, Kaoru Ishikawa, and the fishbone diagram due to its appearance.

When using a team approach to problem solving, there are often many opinions as to the root cause. The cause and effect diagram is helpful in capturing the ideas generated during brainstorming or investigations and organizing these ideas visually for a thorough analysis of the problem. A cause and effect diagram is constructed by drawing an arrow to a problem or desired outcome (effect) and brainstorming potential causes that become the “bones” of the skeleton (see example). The potential causes of any problems are usually confined to 4 or 6 main categories. You may identify your own categories for each “bone” of the diagram but there are industry related standards established. Service Industries typically use the following categories: Policies, Procedures, People and Equipment. Categories for Manufacturing Industries include: Machines, Methods, Materials, Measurements, Environment and People.

Once the categories (each bone) are established your team will brainstorm the causes related to each category. For each cause identified you should ask “why does this happen” and include that information in your diagram. The team assists by making suggestions and, eventually, the entire cause and effect diagram is filled out. Once the entire fishbone is complete, team discussion takes place to decide and agree on the most likely root causes of the problem. These causes are circled to indicate items that require action to be taken. The team will discuss and reach agreement on the primary root cause and a corrective action can be implemented to prevent recurrence.

The Cause and Effect diagram, like most quality tools, is a visualization and knowledge organization tool. Simply collecting the ideas of a group in a systematic way facilitates the understanding and ultimate diagnosis of the problem. It is a simple non-technical tool that can easily be created on a blackboard or flip chart. There are also several computer tools available for assisting in creating Ishikawa diagrams and there are some that will generate an analysis of the data to determine the most likely root cause.

If you would like further information, reference material or templates to create your own cause and effect diagrams contact the Systems and Performance Improvement Department at (601) 933-3239 or via e-mail to synergy.focus@ergon.com.

RootCauseAnalysis-CauseandEffectDiagrams

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Implementation News continued from page 10

Here is a quick reference depicting many of the companies comprising Ergon, Inc., their business segment within our

Family of Products & Services, their current status and/or goal in relation to ISO 9000:2000 compliance and registration:

ISO/TS 16949:2002 Standard

As many of you know, Ergon Asphalt & Emulsion, Inc.’s Technical Coatings Division facility (Ertech) in Memphis, Tennessee, was registered to the ISO 9001:2000 quality management system standard in May of 2004. The next challenge for the group at Ertech is to become compliant with the ISO/TS 16949:2002 (the “TS” stands for “technical specifications”) quality management system standard.

The ISO/TS 16949:2002 standard is used as the quality management system guideline for those supplying products and services to the automotive industry. The original TS

standard was introduced in 1999 and later revised in 2002. This revision aligns the ISO/TS 16949 standard to the ISO 9000:2000 (quality management system requirements) and ISO 14001:1996 (environmental management system requirements) standards. The intent of the revision was to make it easier for those supplying the automotive industry. Instead of trying to satisfy different requirements from different customers, the new standard allows suppliers to be compliant with one set of requirements recognized by all of the automotive manufacturers.

Now you may be thinking, “What does all of this have to do with Ergon?” Good question. Ertech produces a coating that is used as a sound dampening material in the manufacture of automobiles. This fact has led to a customer request that Ertech

become compliant to the ISO/TS 16949:2002 standard. Since Ertech is currently registered to ISO 9001, and the TS standard is built directly off of the ISO standard, a lot of the tasks leading up to the TS compliance have already been accomplished. Ertech enlisted the help of an outside consultant to perform a gap analysis on their quality management system. This gap analysis will show Ertech management what “gaps” exist between their current quality management system and the TS quality management system requirements. After analyzing these results, Ertech will close the gaps in preparation for a TS compliance audit in 2005.

Another area of preparation has been undertaken by the Systems and Performance Improvement Department and the Ergon Internal Audit team. Sixteen lead and more experienced auditors received training in Memphis during October on the requirements, as well as how to audit for the ISO/TS 16949:2002 standard. The auditor training was provided by the same consultant who performed the Ertech gap analysis. This training was critical because the internal audit team needed experience with this standard before auditing the Ertech facility.

In addition to being a great credential for attracting new business, Ertech’s compliance to ISO/TS 16949:2002 is just one of many examples of the commitment Ergon makes toward continuous improvement and customer satisfaction.

DavidWigginton

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FrontRow,lefttoright:CindyDecapio(EWV–Newell,WV),KathrynSteen(EI-SPID–Jackson,MS),RickyAllen,(EI-HRD–Jackson,MS),CherrieHubert(EMS–Vicksburg,MS).BackRow,lefttoright:DavidWigginton(EI-SPID–Jackson,MS),InstructorJoeRigali(PIC–Dallas,TX),SamSchupach(EWV–Newell,WV),AllenWhite,Jr.(ERI–Vicksburg,MS),JaniceCarstafhnur(ERI–Vicksburg,MS),WaverleyArtz(MMT–Vicksburg,MS),ScottMendelson(EI-EHS–Jackson,MS),GeorgiaBedwell(ETI–Bainbridge,GA),JerryBrumley(LION–ElDorado,AR),CharlieBennett(SPID–Vicksburg,MS),KrisWilliams(EWV–Newell,WV),BobWalley(ETI-Birmingport,AL).•Notpictured:WhitneySims(ETI–Jackson,MS)

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PaulYoung

Continual Improvement is an important aspect of all Ergon business. So, for persons familiar with Ergon, it comes as no surprise that we strive to have a proactive, continuously improving environmental program. In order to provide a solid foundation for its environmental program, in 1991, Ergon published a “Corporate Environmental Policy,” in which it pledges to do the following: • Integrate environmental protection into every aspect of its business activities.• Comply with all environmental laws or regulations without regard to the degree of enforcement.• Participate in the development of environmental legislation, regulation or policy issues that may significantly impact our business. Work actively with appropriate government agencies to ensure timely, reasonable, and cost-effective solutions. Meanwhile, the Environmental Protection Agency (EPA) has been attempting to be more proactive in its compliance and enforcement responsibilities. After designating petroleum refineries as the top enforcement priority for many years, in 1998, EPA implemented the “National Petroleum Refinery Initiative.” The basis for this initiative was actually proposed by a petroleum refiner as an additional way for industry, EPA and state environmental agencies to cooperatively resolve several issues. The initiative focuses on four major regulatory areas for the petroleum refining industry:• Prevention of Significant Deterioration/New Source Review (NSR); • New Source Performance Standards (NSPS); • Leak Detection and Repair requirements (LDAR); and • Benzene National Emissions Standards for Hazardous Air Pollutants (BWON). Many companies participated in the Initiative due to EPA investigations at their refineries, and they perceived it as another burden to the industry. However, Ergon and Lion Oil

Company saw it as an opportunity to excel and be a leader in the industry. In August 2001, Lion Oil Company and Ergon voluntarily participated in the Petroleum Refinery Initiative, and they remain the only petroleum-refining company to do so.

After more than a year of discussions, in March 2003, Lion Oil Company voluntarily entered into an agreement (termed “Global Agreement”) with EPA and the Arkansas Department of Environmental Quality (ADEQ). Shortly thereafter, in September 2003, Ergon Refining, Inc. and Ergon – West Virginia voluntarily entered into a joint agreement with the Mississippi Department of Environmental Quality (MDEQ), West Virginia Department of

Environmental Protection (WVDEP) and the U.S. Environmental Protection

Agency (EPA).

By taking these measures, the three refineries will reduce emissions by a combined 3200 tons/yr -- a level well below what is required by law. This is in addition to other

emission reductions – over 13,000 tons/yr – which have occurred

during the past 20 years. In order to achieve the latest reductions, Ergon and Lion

Oil Company are investing in excess of $30 million over the next 8 years for installation of air emission controls. Lion and Ergon are also spending over $100 million on other environmental projects, such as the production of low-sulfur diesel and low-sulfur gasoline.

Ergon and Lion Oil voluntarily participated in the Petroleum Refinery Initiative process in order to significantly reduce air emissions, lay a firm foundation for future operations, and to develop a more cooperative relationship with EPA and state environmental agencies. More importantly, participation was the right thing to do for the environment, the community and the company.

Continual Improvement

DILBERT reprinted by permission of United Feature Syndicate, Inc.

Ergon’sParticipationinthePetroleumRefineryInitiative

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Special commendations are extended to Tom Isonhood, Manager of Ergon’s

Systems and Performance Improvement Department for earning his Master’s

degree from the College of Business and Economic Development at the University of Southern Mississippi. Tom graduated

December 17, 2004 with a Master’s of Science degree in Workforce Training and Development.

PRSRT STDU.S. Postage

PAIDJackson, MS

Permit No. 774

Systems & Performance Improvement DepartmentP. O. Box 1639Jackson, MS 39215-1639

Trainer Certificates

Employee ErgonCompany CertificationJohn Morgan Ergon Asphalt & Emulsions, Inc. Training Generalist Steve Riles Ergon Refining, Inc. Training Generalist Lori West Systems & Performance Improvement Training Generalist Lori West Systems & Performance Improvement Training Manager / Director Cherrie Hubert Ergon Maintenance Services Training Manager / Director John Knopf Ergon Terminaling, Inc. Training Manager / Director Johnny Wacaser Ergon Terminaling, Inc. Training Manager / Director

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Congratulations to Ergon employees who in November completed coursework for new training certifications with Langevin Learning Services, the world’s largest Train-the-Trainer company.

Although several employees participate each year in the Langevin in-house courses offered at Ergon, these six employees have completed the requirements needed for the following certifications:

Manager Receives Master's

Congratulations to winners of the “Picture This!” contest featured in the summer 2004 issue of . Phillip Whitfield, Ergon Trucking, Inc. in Sulphur, LA; Charles Joiner, Lacox Propane, Hammond, LA; LaKeshia Allen, Ergon Refining, Inc., Vicksburg, MS won the Oct. 15 contest. For answer key, prizes and photos, see online at http//www.ergon.com/news.

Toinquireaboutcourseofferings,companyresourcesordiscussfeedbackandtrainingneeds,pleasee-mailtosynergy.focus@ergon.comorcall601.933.3203.