Site: Kapolei, Hawaii

Description of Site: The Kapolei refinery was built in the 1970's to refine hydrocarbons. It went through a series of owners until purchased by the Tesoro Petroleum Corporation in 1997. This refinery is rated at approximately at 92,000 barrels per day. The geography has a tremendous impact on the refinery in several ways. All of the crude feed stocks arrive by tanker. Due to the remote location, the variety of crude feed stocks tends to be more varied than the average refinery. On the plus side, the weather is a lot more stable – and temperate -- than the average refinery experiences.

Nature of the Opportunity: Refinery management wanted to align with corporate directives regarding what had become known within Tesoro as the "Maintenance Work Management Process Global Model." The global model was the work management process developed during SAMI's work at the Kenai refinery the previous year. The model was not an exact fit, however, the basic elements were compatible and there was an overt desire for similarity and compatibility between the sites on the part of local and corporate management. Tesoro had also added two additional refineries, and the need for common processes became more acute than ever.

During a short assessment, we found the amount of urgent work to be very high at 45-50%. It was a typical scenario where Operations did not trust Maintenance to do routine work, so everything became urgent. Maintenance recognized much of what Operations requested was not as urgent as they indicated by the consistent high priorities assigned, but instead of talking it out and agreeing to a reasonable priority, they would unilaterally change the priority to a lower grade. We found contractor usage to be relatively high. A normal week saw in excess of 800 contractor hours. The abnormal weeks were the ones where there was some type of shutdown work or other emergency so the contractor hours were even higher. Routine overtime was also high – in the 15% range, approaching 20% in some shops.

What We Did: We already had a process designed the previous year in Kenai. What we needed was to implement the design. Implementing the design meant making the Kapolei end result match as close as possible to the design developed in Kenai.

The refinery selected a cross-functional group for an Implementation Team. As in Kenai, we also had a Steering Committee. The refinery manager acted as the Steering Committee Chair. The Steering Committee was comprised of the Refinery Manager's direct reports. The direct reports named the Implementation Team representatives. We had representation from maintenance, operations, safety, and purchasing / warehouse. Levels ranged from hourly and clerical to superintendent level.

The Implementation Team began by meeting for eight hours, one day a week for ten weeks to develop a Work Management Process Design. The Steering Committee reviewed the activities of the team for at least two hours every other week. After a lot of give and take from both groups, a final product was agreed upon. Then the Implementation Team began implementing.

Implementing involved training all departments and levels regarding their responsibility to the Work Management Process and included the following elements:

• There was a revised process for processing work requests
• No maintenance work preformed without a written request
• Maintenance Planners and Supervisors assigned estimated labor hours to all Work Orders
• Maintenance Shops scheduled their available resources one week in advance
• The daily Operations / Maintenance coordination meeting was taken to a new level of interaction
• A weekly Scheduling Meeting was initiated and institutionalized where "next week" was discussed and activities coordinated
• Backlog management is now based on estimated labor hours by craft and shop
• Work close-out is standardized and controlled more closely by Shop management
• Operations and Maintenance personnel know what is going to happen tomorrow

Results: The first indications of improvement were in the area of work requests. Not only did the urgent results get cut in half, but overall requests also fell. Maintenance now process 20% to 25% fewer requests.

The first noticeable financial impact occurred in August 2002. Actual maintenance costs were $400k below budget. September was better. October was the same. The budget for 2003 was a full $2 million less than the previous year ($11M the previous year).

Other Results:

• Normal for contractor usage was below 500 hours a week.
• Overtime was consistently in the 5% range.
• Operations personnel quit using manual work request logs – which were hit and miss regarding completeness – and now use the CMMS for tracking all their requests and completions.
• The KPIs followed by the refinery are the same as Kenai's.

While the impacts and dollars mentioned above are substantial, there were several other things that really caught the refinery manager's attention and told him there had been a genuine cultural change in the way they conducted business:

• On one of his routine trips through the refinery, he came across a crew of craftsmen working in the field. The craftsmen stopped him to tell him how much better life at work was for them. They knew what was expected of them. They had all the materials they needed. The job was completely planned for them. They did not have to spend any of their time planning the work. This told him their wrench time was increased.
• In a meeting with some operations personnel, one of the operators, well known for complaining, spoke about a maintenance crew in the unit. Instead of a complaint, the comment indicated how well organized the crew was and how well orchestrated the whole job was.