2020 AFPM Summit: Tuesday morning Industry Leadership Panel
Tuesday morning Industry Leadership Panel
MIKE RHODES, Managing Editor, Hydrocarbon Processing
Following Tuesday morning’s Keynote address by AFPM President and CEO Chet Thompson, leading industry executives discussed their perspectives on the state of the industry and the “new normal.”
Panelists included: Daniel Coombs, Executive Vice President of Global Manufacturing, Projects & Refining, LyondellBasell Industries; Michael Coyle, President, Manufacturing, Chevron Corporation USA; Robert Herman, Executive Vice President, Refining, Phillips 66; and Michael Nagle, President & CEO, INEOS Olefins & Polymers USA.
Definition, evaluation and measurement. As the moderator, Thompson asked the very experienced panelists, who have collectively been responsible for 46 sites across 15 states, about their views on how to define, evaluate and measure plant performance and operational excellence.
“Operational excellence is really a framework of processes and systems that govern good operation,” said Coombs. “It starts with a culture and values that promote safety, environmental protection, quality, reliability and continuous improvement. This helps people work together in a common framework to reduce risk and improve operating efficiencies. Operational excellence success must be measured holistically, but different departments have specific functions and goals that must fit within the greater facility’s goals.”
“The way that Chevron has thought about this all these years is that it’s about safety, reliability, environmental performance and efficiency,” agreed Coyle. “This really hasn’t changed in 20 years—what has changed is that the bar is continuously raised, and we have to focus on what impacts the workforce and community and continue to strive for world-class performance.”
“I agree, and operational excellence really underlines everything we do,” said Herman. “We’ve expanded to include not only efficiency in operations, but in controlling costs, such as controlling turnaround budgets, which are a big issue in our industry. When I visit a plant, I am looking for many different metrics to show that they have hit operational excellence. We are a long way from where we want to be, but we are a long way from where we started too. The tools have changed and knowledge has grown, and the expectations of our industry for us to deliver get higher and higher every year.”
Nagle said, “There is probably no greater representation of operational excellence than what the workforce in the industry have done in the last five or six months to continue to deliver the products and goods that are needed not just by our industry, but by our country too. We view it as a collective mindset across the entire organization. There is not just one metric that tells that story. When talking about safety, process safety is critical, as well. We pay attention to leading indicators, environmental factors, quality and how to consistently improve.”
Promoting interaction. Thompson asked the panel about how important they think it is that various divisions understand the core missions of other groups, how they prioritize them, and how leadership can promote interaction between teams.
“If we are in siloes, we are not working across boundaries or toward the common goal,” said Coyle. “We’re focusing on looking across the entire value chain to have an enterprise focus. Sharing resources and expertise across boundaries is key, and technology allows that to happen more easily.”
Nagle said, “To look forward and set goals, you have to be grounded in where you are today and understand current performance. It is also important to look outside the plant, as well, to the functional and procurement teams—they play a significant role. It is important to understand the issues you do have and why are you having them, and how you address those issues and raise the bar across the organization to make sure that everyone is working in lockstep to improve those performances. We say, ‘what gets measured gets better.’ When we fall short, we learn from that, pick ourselves up and move forward to raise the bar again.”
The COVID-19 effect. Thompson brought up CIVOD-19 and how quickly the world has changed. When evaluating plant performance by traditional metrics, has the pandemic changed the methodologies for evaluation?
“The way we measure plant success during COVID is very similar to what we did before, but with some additions,” said Coombs. “We know that plant performance is connected to human performance, so we have added measures to keep and measure the health of those people. We also look at how external factors are affecting things. Taking care of employees has provided a new set of metrics. As far as the things everyone has talked about previously, we are measuring those factors the same despite COVID and are largely hitting those targets. This reflects well on the people in our industry that are working in such a challenging environment.”
“We evaluate them the same way, but a number of things have changed,” said Coyle. “We’ve changed our idea of what products we are producing. As production rates lower, you think about your operating expense, and it highlights where you might have some fixed-cost opportunities. To make those kind of changes, you have to be clear about priorities.”
“Our evaluation of the plant didn’t change, but we added a lot of complexity to the daily work trying to keep personnel healthy and safe. We started with two goals: keep people healthy and safe, and the second is to ensure that we keep running. It was interesting to see that what works in Los Angeles doesn’t necessarily work in Billings, Montana, or Houston, Texas, so we ended up with 12 different approaches to the same problem,” said Herman. “In the end, they converged and just became another technical problem to solve. Our digital journey of the last couple of years set us up well.”
“Digital was a priority for us before this happened,” said Nagle, “and I think it has accelerated due to the connectivity. We are doing things with technology that we have not before. Control rooms are being set up remotely, and experts are there for support rather than on the ground at the facility are participating and providing advice, minimizing the number of people onsite.”