Fortune Global 10 Refinery Saves Over $600K On 30-Day Turnaround Using TRACK Platform

A FORTUNE Global 10 refinery with sites all over North America engaged TRACK Software to conduct a “parallel pilot” for their upcoming turnaround. For the purposes of the pilot, TRACK™ Platform operated in parallel with existing cost tracking and contractor management processes. The objectives were as follows:

• Provide first-hand experience to validate the value and benefits of TRACK Platform
• Provide project data in support of a timely and cost-effective turnaround
• Report contractually-compliant contractor hours and costs, and identify variances against their current, manual process

There were two major findings:

• Cost tracking and reporting, as implemented at the plant, is resource intensive and does not provide the accurate real-time information needed to proactively manage and control costs, especially during a fast-paced turnaround.
• Refinery’s cost accounting and invoicing processes are heavily dependent on the accuracy of vendor inputs and provide for limited verification of service receipts. For the turnaround period (Oct-3 to Nov-3), TRACK Platform calculated a 10% overstatement of contractor billable hours, representing a potential savings of $648,000.

• Cost analysts are consumed with data collection and reporting activities; little time available for analysis.
• The primary cost control mechanism is the budget (spending up to the budget number is expected).
• Cost collection is an accurate process separate from vendor invoicing and verification.
• Cost reporting is not timely (cost meeting every other day due to workload and limited resources).
• Labor, material and equipment charges are not validated by contractual terms and conditions.
• Work completion (percent) is not routinely input on the cost sheets; precluding final cost projections.
• Excel spreadsheet is cumbersome (updated manually, single user access, frequent format changes).
• Little or no cost information received from outside service vendors (invoice submitted post-turnaround).
• SAP service and timesheet entries are approved without first-hand knowledge of service receipts.
• Lack of vendor discipline impacts the ability to capture costs accurately on a daily basis.
• Contract rate schedules, terms conditions are not current or readily available for the cost analyst.
• Special deals (fixed fees, consolidated-skill rates, inclusive rates, etc.) are not well communicated.
• Gate logs are not complete for the audit process (missing badge events).

The Approach

• Five turnaround contractors were identified and corresponding master data was gathered and loaded: commercial terms conditions, contractor personnel, schedules, crafts, and rates.
• Active work orders were identified and entered into TRACK Platform at each of the three units. These work orders form the basis for cost allocation and reporting.
• TRACK’s SaaS service was deployed in Houston for the parallel pilot. Database backups were performed nightly to ensure the integrity of the plant’s data. Uptime availability of the system during the turnaround was 100%. Transaction response times were measured typically in the range of 1-3 seconds.
• Gate card reads were extracted from the plant’s access control system on a nightly basis and transmitted via the Web for processing. On-site, net-billable hours and contractually complaint costs were calculated by TRACK for Time Materials labor.
• TRACK Platform Software consultants performed daily operations to resolve data exceptions and allocate hours and costs to validated work orders.
• Comparison of contractor hours and costs by day identifying variances in reported costs versus TRACK gate validation and automated calculations.

Work Process Comparison
The plant’s existing cost tracking and reporting process are separate from the vendor’s invoice and payment stream; a parallel operation, Therefore, cost tracking and reporting is an overhead process dependent upon the discipline of the vendor for accurate inputs. Because the reporting stream is separate from the invoice process, the two systems are subject to discrepancies that will not be apparent until the vendor submits an invoice for payment.

TRACK Platform integrates daily cost collection and reporting with the vendor’s invoicing process. This is done by providing an interface of authorized charges to the owner’s Accounts Payable system and to the contractor. The contractor is paid through the reconciling of hours and costs in TRACK Platform. The daily acceptance of charges by the contractor and the authorization of charges by the owner results in a single, accurate and real-time source of cost information.

In just 30 days, the parallel pilot demonstrated that TRACK Platform would have saved the plant nearly $650,000 during their 30-day turnaround.