Time for Refinery Solomon Reporting….Again?!? | RefinerLink
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Time for Refinery Solomon Reporting….Again?!?

By Ralph Laurel

Jan 20, 2013
 

For such valuable data, refinery Solomon submissions end up creating a fair amount of controversy every time they come around. This article explores the reason for the fuss and explains what can be done to improve receptivity.  

 
 

It’s that time of (alternating) year again - time to scurry frantically to complete your refinery Solomon Fuels submissions!  For every analyst or process engineer, it’s the dreadful “S” word we wish to shun from refinery vocabulary. 

 

So why does this survey process create so much angst?  Is the data difficult to compile; do the results just not mean a whole lot; or do managers just not understand how to use the results?  Depending on who you poll, the feedback will vary.  The likely reality is that a combination of the factors listed above all weigh in.

 

For the readers who are not fully versed in all of the metrics measured through Solomon benchmarking, the following list contains descriptions of key refinery performance focus areas as found on their site:

 

  • Energy
  • Maintenance
  • Turnaround Performance
  • Reliability
  • Personnel Productivity
  • Operating Expense
  • Capacity Growth and Utilization
  • Product Yields
  • Net Cash Margin
  • Return on Investment
  • Capital Spending

 

 

 

You’ll likely hear these fundamentals expressed inside of the refinery as kEDC, Mechanical Availability, Turnaround Interval, Operational Availability, Personnel Index, EII… among the many other buzz-words.  You may also hear other terminology such as quartiles, leading edge, and peer group.  At the end of the day, the best way to simplify Solomon benchmarking is to think about it as comparing one refinery performance to another’s, while normalizing it to geographic location and complexity.

 

“comparing one refinery performance to another’s, while

normalizing it to geographic location and complexity”

 

So let’s come back to my original question – why all of the fuss around Solomon reporting?  To answer this, I’ll break it down into the view point of the various data owners and stakeholders:

 

 

Refinery Accountant

 

The Issue:

Refinery finance analysts support a hefty load for Solomon submissions.  Over half of the key performance factors are tied to financial indicators.  From capital expenditure, to Opex, to maintenance expenses... refinery accountants own the bulk of the data.  Bean counters count beans, right?  If so, why are Solomon beans so much harder to count? 

 

Issues arise because Solomon reporting has many rigorous categories for classifying expenditures.  Many refineries do not have robust business stewardship processes, thus require a fair amount of finance manipulation to complete Solomon tables.  Refinery accountants require accurate and timely feedback from many different organizations, and quite honestly this just does not happen.  Refinery operations, maintenance, and technical folks have more important business needs to focus on. 

 

The Solution:

Improve the robustness of monthly data stewardship.  No, I am not advocating that you sign up for Profile II.  If your organization cannot figure this out on its own, then operating a top tiered refinery is not in your destiny.

 

The reality is that Solomon metrics really make sense, so why are you not monitoring it on a frequent basis?  The whole point of stewardship is to drive business discipline into refinery operations, so this needs to start with routine performance measurement.  

 

 

Process Engineer

 

         The Issue:

Process unit yield gaps is one of the key results learned from Solomon benchmarking.  Accordingly, inputting proper unit performance data into the Solomon Table requires rigorous analysis.  This can create a significant amount of stress for process engineers as complete plant data may not often exist. 

 

Different refinery labs perform routine lab analysis to varying degrees of rigor and frequency.  Also, technologies such as online GCs may not be available for streams that are difficult to sample.  Lastly, and most ironically, many lab programs have been reduced in an effort to save refinery opex.  The end result of these factors lead to inadequate data availability. 

 

How can a process engineer really differentiate the C2- production yield from C3 yield on a FCC without great analyzer or lab data?  What about understanding C5+ alkylate yield with limited GC information?  Having meaningful data to compare with peers requires good lab data, and this often sends process engineers into a frenzy.

 

The Solution:

Develop rules of thumb that give you reasonable performance estimates.  If you are missing GC data and wish to estimate C5+ content, utilize the stream RVP and back-calculate C4 composition.  Yes, this yields a fairly inaccurate estimate, but it’s a better starting point than your last.  The point is, use your engineering skills and find surrogate solutions to your data gaps.  Also, document these assumptions so that it can be used for future submissions.

 

It is also a good practice to reference past Solomon submissions.  Whether you have complete data or incomplete data you should ALWAYS compare your data with prior submissions. 

 

 

Refinery Management

 

The Issue:

Many refinery managers really don’t know what to do with Solomon benchmarking results.  The primary reason for participation is to satisfy a corporate mandate - quite honestly many refinery managers do not fully understand the business well enough to make proper decisions with Solomon results.

 

How many endless stories have you heard about managers cutting refinery Opex to chase KPIs?  The classic example is when refinery reliability suffers because managers inappropriately reduce maintenance spend. 

 

A significant amount of debate and recycle often occur when refinery managers do not communicate a proper vision on how Solomon results are being applied to improve business performance.  Even worse, when managers make decisions that have inadvertent outcomes, faith in the Solomon process breaks down.

 

The Solution:

Managers should take the time to really understand the data.  The whole point of benchmarking is to understand relative performance, so all managers should get very intimate with the data.  This will give refinery leaders a better appreciation of what each gap means, and what’s required to close it. 

 

Managers can ask their analysts to develop a gap assessment, but the enabler of understanding what it means, or how to properly address the gaps requires one to get dirty from time to time.  This can prevent blind mandates such as “Maximizing Utilization” in an effort to “Increase Net Cash Margin”. 

 

Beyond just understanding the data, it is also very important to communicate a clear vision on how refinery management will use the benchmarking results to improve performance.  Don’t just state that you wish to achieve 1st quartile status in turnaround performance.  You’ll need to balance your message by indicating what metric you are willing to give up in order to achieve your objective.  In essence, prioritize your metrics and maintain consistency in messaging. 

 


I conclude this article by saying that Solomon benchmarking will never go away.  It has developed a strong wealth of history in our industry, and quite honestly, it makes sense for refineries to participate.  The reality still remains that refinery employees just do not like it.  Data reporting remains a challenge, and refinery management response to results can improve significantly.  Don’t let Solomon indices become senseless indicators - take into consideration the feedback above.

 

 

 

This article has not been endorsed by Solomon Associates, but does reference many world standard benchmark metrics registered to Solomon Associates.

 

 
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