terminal bench marking whitepaper

8/4/2019 Terminal Bench Marking Whitepaper

1/14WIPRO TECHNOLOGIES

By Goutam Mangaraj

Terminal BenchmarkingWipro Thought Leadership


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EXECUTIVE SUMMARY

This paper showcases Wipros thought leadership around the enterprise-wide fuel Terminal Benchmarking

area, which is an industry trend that has emerged over the past few years. The paper articulates Wipros

point of view around the business drivers for benchmarking, the process for benchmarking, some important

KPIs and finally an IT solution to enable this process. The IT solution that Wipro proposes is detailed in one of1

our earlier papers, i-Terminals


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TABLE OF CONTENTS

1.0 Introduction to Benchmarking................................................................................4

2.0 Benchmarking of Fuel Terminals Business Drivers...............................................4

3.0 How to benchmark fuel terminals across the enterprise?......................................5

3.1 Benchmarking Process...................................................................................................5

Tools & Systems...........................................................................................................6

Roles & Responsibilities..................................................................................................7

Benchmarking Components (Indicative List)............................................................................8

Sample Graphs..........................................................................................................11

Critical Factors for a Successful Benchmarking.....................................................12

References...................................................................................................................13

3.2

3.3

3.4

3.5

4.0

About the Author.........................................................................................................13

ABOUT WIPRO TECHNOLOGIES...................................................................................14



1.0 Introduction to BenchmarkingBenchmarking is the process of comparing one's business processes and performance metrics to industry bests and/or

best practices from other industries. Benchmarking involves management identifying the best firms in their industry, or

any other industry where similar processes exist, and comparing the results and processes of those studied (the

"targets") to one's own results and processes to learn how well the targets perform and, more importantly, how they do

it.

The concept of "best practice benchmarking" or "process benchmarking helps organizations to evaluate various

aspects of their processes in relation to best practice companies' processes, usually within a peer group defined for the

purposes of comparison. This then allows organizations to develop plans on how to make improvements or adapt

specific best practices, usually with the aim of increasing some aspect of performance. Benchmarking may be a one-off

event, but is often treated as a continuous process in which organizations continually seek to improve their practices andhelp them achieve business excellence.

The benchmarking process for storage terminals has been there since a long time but it lacked a systematic approach.

With the advancement in IT tools and technologies, now the benchmarking efforts can be more cohesive, more aligned

towards vision and mission of oil storage and distribution companies. There are several challenges, which are faced

during benchmarking exercise, viz. disparate data sources resulting from silo IT implementations, more efforts spent on

collecting and compiling data rather than on validating and analyzing them, no standardization of existing processes

across corporation, data quality issues, lot of time consuming manual efforts, no standard process for opportunity

capture and follow through, etc.

2.0 Benchmarking of Fuel Terminals Business Drivers


Current Scenario Snapshot The benchmarking process will help the companies to find out their current standing

i.e. what is their performance at this point of time vis--vis desired level

Improve Terminal Performance Once a target is set for certain KPIs, then over the period of time those indicators

could be closely monitored against set targets and subsequent steps can be taken to enable them meet those

targets hence resulting in improvement in terminal performance

Savings in terms of Money & Efforts - Once a centralized benchmarking effort is done, then it results in lot of cost

savings as there would be no need to carryout separate localized efforts on benchmarking process. Further, it would

result in lot of savings in manpower efforts to generate inter terminal comparison reports

Drives Knowledge Management Energy industry has a perennial issue of ageing workforce but once

benchmarking is done, then the various efforts which are taken to improve the performance metrics would be

captured and the same can be referred in future on need basis.

Efforts aligned to Company Strategic Goals Benchmarking will channel the performance improvement efforts

towards target companies vision/strategic goals such as incident free work place or maximize shareholders

returns on investments (profit maximization) etc.

Framework for Comparing Apples-to-Apples Benchmarking efforts provide a platform to compare performance

of different assets in different location on similar platform, i.e. it allows users to bring all terminals to common

comparison platform by correcting the different data sets with respect to corresponding applicable inflation rate,

exchange rate and purchasing power as per applicable country scenarios.

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Identify Processes

Perform Actions Determine KPIs

WIPRO TECHNOLOGIES

3.0 How to benchmark fuel terminals across the enterprise?

Identify Processes: The first step in benchmarking is to identify various processes (functions), which ought to be

included in the benchmarking process. All the processes which, when monitored on a continuous basis, can result in big

fat payouts or quick gains on a sustainable basis should be included. An effort cum returns matrix can be prepared to

arrive at the best-case scenarios that should be picked under benchmarking efforts. For example continuous

monitoring of maintenance function can lead to prudent maintenance strategies resulting from optimum spare parts

inventory, similarly continuous monitoring of operations function can lead to identification of over capacities of

inventory space thereby leading to rationalization of tank storage space.

Determine KPIs: Next step involves identifying the key performance indicators that capture the major performance

outputs of the selected functions/processes. Generally, Pareto rule (80-20) is applicable to most of the industries. 20% of

the KPIs could be responsible for 80% performance output of the processes; hence those 20% KPIs must be included for

monitoring purposes. For example Gate to Gate time, Maintenance cost per m3 of fuel handled, FTE cost per m3 of fuel

handled, etc.

Configure Alerts/Warnings: Proper alerts (High-High, High, Low, Low-Low) should be configured so that the deviations

of KPIs from the target benchmarking efforts could be captured before they become potential threats for bottom line

erosion. For example The tank level-monitoring alert can be fixed at 95%(High-High), 90%(High), 20%(Low), 5% (Low-

Low)

Measure KPIs: Next step involves monitoring of KPIs at frequent interval of time to identify opportunities to enhance

operational efficiency. Different set of KPIs require different set of data fetching rates, e.g. some KPIs can be monitoredon minute-minute basis, some hourly basis, others on weekly or monthly basis.

Perform Actions: On observing any deviations from predetermined targets, assigned users should perform remedial

actions as well as document their learning for future reference by other colleagues in similar scenarios. The objective is

to have optimum number of terminals to perform in first quartile. This can be achieved by equipping employees with

tools and technologies which will allow them to operate in concurrence with best standards, procedures and controls,

follow good maintenance practices to achieve high asset integrity, excellent HSSE performance, and outstanding

customer service, in synchronization with stable financial performance.

These processes will result in sustained improvement of business performance over a period of time. Monitoring and

improvement of the KPIs is a continuous process that has to be carried on till there is a need to drastically change the

existing benchmarking processes in order to match current changed business scenarios that make existing processes

irrelevant.


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3.1 Benchmarking Process

Configure AlertsMeasure KPIs

Improve

Performance



1Our earlier paper (i-Terminals) had emphasized on the importance of terminal benchmarking for achieving overall

improvement in performance of terminal operations. Further, using the solution (i-Terminals), the data can be captured

from different IT systems like Operations data (Terminal Automation System), Inventory data (Tank Farm Management

System), Quality data (Analyzers/LIMS), Maintenance & HSSE data (in-house Oracle/SQL based systems), and Sales, HR

& Finance data (ERP Systems) and then converted into valuable information in form of dashboards, KPIs, alerts, etc.


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3.2 Tools & Systems

Dashboards Lost opportunity Gap Analysis

Charts Alerts Trends

Monthly Reports Daily Reports Analytics

i-Terminals




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3.3 Roles & Responsibilities

Arrange training sessions

Decide consistent KPIs to monitor organization wide performance status

Identity Best & Worst scenarios in various terminal operations

Share findings with Terminal & Geo - level managers

Plan issue focused projects to identify and eliminate inefficiencies

Compare published results for respective terminals in that geo

Indentify areas of inefficiencies

Drill down to causes of inefficiencies

Take steps to remove / reduce those efficiencies

Understand use of tool and train appropriate resources

Validate terminals related data with various functional departments (Assess data quality, correct inconsistencies)

Allow results to be published

Head Quarter Level Manager

Geography Level Manager

Terminal Level Manager




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3.4 Benchmarking Components (Indicative List)

HSE

Quality

Energy

Operations

Finance

Benchmarking KPIs - Data Sources

Relationship Diagram

Gate to Gate

TimeHSE

Energy

Consumption

Terminal

Automation

System

Oracle/

SQL Server

ERP/

Oracle/

SQL Server

(Indicative Diagram)

Incident free working hours

Number of Recordable Injuries

Amount of Spill Volume

Number of Off specs

Quality Giveaway

Quality Loss

Electricity Consumption Quantity

Water Consumption Quantity

Other Utilities Cost

Opening Versus Closing Stock

Capacity Utilization Ratio

Mode Wise Volume receipt

Labour costs, Contractor Costs

M&R Cost, Salary & Overtime Costs Depreciation



Let us consider the benchmarking of terminals based on gate-to-gate timings for each terminal. For this purpose, we

have divided the entire gate-to-gate time into distinct activities and sub-activities that take up a trucks time at a

terminal.


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1. Entry queue

2. Entry Process

3. Staging Process

4. Parking & Waiting

5. Loading Process

6. Post Loading

7. Exit

Sr. No Activity Sub-activity KPI Calculation Remarks

1 Entry Queue Entry Queue Periodic Survey(Average value)

Manually input into a form

2 Entry Process Truck / DriverValidation

Time in minutes

waiting to enter

terminal gate

Time in minutes to

validate truck / driver

Formula: {Start time of

activity no. 5 - 4 - 3 -Start

time of activity no. 2}

Start time of activity

no. 2 = Card swipe time in

TAS at entry gate reader

Start time of activityno. 5 = Card swipe time in

TAS at staging reader

3 Entry Process ReachStaging Area

Periodic Survey

(Average Value)

Manually input into a formDriving time to

staging area

4 Entry Process StageQueue Time

Time waiting

before start

of staging process

Formula: {Start time of

activity no. 5 - 3 - Start

time of activity no. 2}



TAS at entry gate reader



TAS at staging reader

5 Staging

Process

Stage Load Card out time - Card in

Time at staging reader

Available in TASTime taken to stage

a load

6 Parking &

Waiting

Drive to

Parking Area

Periodic Survey

(Average Value)

Manually input into a formTime taken to reach

parking lot

7 Parking &

Waiting

Wait at

Parking Area

Waiting time




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Sr. No Activity Sub-activity KPI Calculation Remarks

8 LoadingProcess

Drive to

Loading Bay

Periodic Survey

(Average Value)

Manually input into a formTime taken to reach

loading bay

11 LoadingProcess

Load Product Product flow stop time

- Product start time

Time taken to

load product

9 LoadingProcess

Connect Truck Periodic Survey

(Average Value)

Manually input into a formTime taken to prepare

vehicle for loading

10 LoadingProcess

Enter Load

Details

Product flow start time -

Card-in time at bay

Available in TASTime taken to enter

load details

12

13

Loading

Process

Post Loading

Disconnect

and Leave Bay

Drive to

Document

Printing Station

Card-out time - Product

flow stop time

Card-in time at document

printing station -

Card-out time at loading bay

Time taken to

disconnect truck

and leave

Time taken to drive

to document

printing station

Available in TAS

Available in TAS

Available in TAS

14 Post Loading CollectDocumentation

Card-out time at document

printing station - Card-in time

at document printing station

Time taken to

collect document

Available in TAS

15 Exit ExitTerminal Gate

Card-in time at exit gate -

Card-out time at document

printing station

Time taken

to exit terminal

Available in TAS

The above KPIs would then need to be normalised to account for differences in vehicles sizes, average number of

products loaded per load, average number of compartments loaded per load, average quantity loaded per load, etc.




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3.5 Sample Graphs

Maintenance & Repair Costs / Throughout Terminal Opex/Throughput

Investment Analysis

Opportunity Loss Terminal Maturity Scorecard

Terminal Capex/Throughput



4.0 Critical Factors for a Successful BenchmarkingAssign responsibility at every level (Terminals, Geo, HQ): This is the basic activity that will lay a foundation of a

successful benchmarking effort. Please refer section 3.3 for further details of what kind of responsibilities can be

assigned at different levels.

Open information sharing culture between different functional departments: Every Company must focus on having an

open culture of information sharing between various departments. In the initial period, the employees may be little

hesitant as now their colleagues in other department would know how they are performing on day to day basis but once

they realize its importance in companys future growth then they will be more than willing to do henceforth.

Right IT tools (I terminal solution): It is very important to have right IT tools, which will help the organization in

benchmarking activities. IT tools like I Terminal solution can address most of the loopholes existing within a company

with respect to information sharing and benchmarking efforts. Further, these tools are deployed easily and quickly, with

attractive RoI proposition.

Identification of valuable KPIs for each functions: After identifying the functions which, when monitored continuously,

can result in big payouts or quick wins (as per the adopted strategy) then all the associated important KPIs which

facilitate to do so must be identified. Monitoring of wrong KPIs may result in unsuccessful benchmarking efforts in the

long run.

Stable feedback mechanism: The IT tools must facilitate feedback mechanism so that the performance indicators can be

evaluated on a regular basis. All the KPIs should be crosschecked in regular interval to find out whether they are still

relevant with respect to current business scenarios or they need to be changed with respect to changing business needs.

Near real time availability of information: Availability of information is quite important to understand the current

business state but the duration of availability can play a spoil factor in the sense that if a current piece of information

could have been made available to the business before 2 hours then accordingly some decisions could have been taken

to avoid a huge business loss which currently seems inevitable. Thus benchmarking should be done in such a way that

information is available stakeholders on near real time basis such that it facilitates decision making within opportunity

window.


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Interviews with Oil and Gas Professionals

Wipro Industry Research

http://en.wikipedia.org1

i-Terminals: Wipro Thought Leadership - http://www.wipro.com/industries/energy/energywp.aspx

Interviews with Wipro Industry Experts

References

About the Author

Goutam Mangaraj

Goutam has over 6 years of experience in the IT services industry, with dedicated focus on solutions for the Oil & Gas

industry. He has comprehensive knowledge of business processes involved across Oil & Gas downstream value chain viz.

refinery operations, terminal & depot operations, downstream supply chain and retail operations. He has worked in

several technology projects in various capacities for Oil Retailing Giant, Global Petroleum Super Major, World Class

Refinery, Large Integrated Petrochemical Major etc. He is currently working as a Consultant within Wipro's Smart

Solutions Competency Centre. He is qualified software professional and holds a M.B.A in Oil & Gas Management.

For more information on this paper, please contact Goutam Mangaraj at [email protected]

Visit Wipro at www.wipro.com


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