Shell Global Solutions - Case Study - Deer Park

Business improvements inchemical manufacturingDeer Park chemicals plant pursuesoperational excellenceShell Chemicals’ Deer Park chemicals plant in Texas, USA, manufactures basechemicals that are transformed into thousands of different consumer productsranging from carpets to computers. Like all Royal Dutch Shell plc (Shell)manufacturing plants, Deer Park is striving for operational excellence.SolutionIn January 2006, the Deer Park chemicalsplant became the first Shell Chemicalsfacility to undertake a BIR. With the BIR,the site would have a single actionableimprovement plan and the capacity to deliverall the parts of this plan.SituationIn 2004, a study by Solomon Associates (therefining industry’s benchmarking body)identified substantial potential collectivesavings that could be captured throughefficiency improvements at Shell manufacturingsites. Shell is resolutely chasing efficiencyimprovements by performing businessimprovement reviews (BIR) at its refining andmanufacturing sites.To enhance its performance, the Deer Parkchemicals plant had undertaken severalimprovement initiatives, but these had leftemployees feeling overstretched. Some of theinitiatives had focused on short-term costmanagement at the expense of operationalreliability. The plant needed an effectivestrategy to help improve reliability and tosustain those improvements.BIRs provide a means of identifying wherereliability can be improved, costs can belowered and margins can be extended. TheDeer Park chemicals plant BIR was performedby plant staff and consultants from ShellGlobal Solutions and McKinsey & Co., amanagement consultancy firm. The reviewbegan with a three-week diagnostic stageduring which site employees wereinterviewed, performance data was analysedand the previous studies were evaluated.The BIR focused on six main areas forimprovement:• health, safety and environment• operational availability and reliability• non-energy cash costs such as salaries, andmaintenance, chemical and catalystexpenditure• margins• energy• organisational effectiveness.

All the areas for improvement were examinedto identify the gaps between the plant’s currentperformance and its potential performance.A previous review that had focused on theolefins unit provided useful information aboutthe plant’s organisational effectiveness, and itsfindings were incorporated into the BIR.Internal and external leadership teams thenworked together over a six-week periodduring which they identified 85 initiatives andtactics that would help to close theperformance gaps. These initiatives wereprioritised so that those changes that addedthe most value to the plant’s operations couldbe implemented first. Spreadsheet tools wereintroduced that enabled the plant’s staff toexamine resource availability and plan thework using risk matrices.The proposed initiatives were then subjectedto challenge. On- and offsite stakeholdersoffered feedback on how they saw theimplementation of each initiative. This processhelped align the vision of the leadership teamwith those of the staff who would be involvedwith day-to-day implementation, thus helpingto make the projects sustainable.Client verdictMary Mujica, General Manager, Deer Parkchemicals plant, Shell Chemicals LP, says, “Inthe areas of technology and engineering*,we have relied on Shell Global Solutions tohelp us through the various initiatives, whetherthese were in the olefins plant, the aminesystems or the phenol plant.”“The organisation has demonstrated theflexibility to work with the site. Forexample, our team was due to carry out anenergy-efficiency project. However, when wecame to look at the priorities, although energyefficiency was important, it did not rank ashighly as some of our reliability issues, andso we asked Shell Global Solutions to help uswith those instead. They really worked withus on that, which I think is a big testament totheir focus on customer needs.”Lynne Buchanan, Business Process Manager,Deer Park chemicals plant, Shell Chemicals LP,says, “Organisational effectiveness andreliability were the most important areas forus.We wanted to build a foundation that wouldprovide sustainable reliability for ouroperational units.”“We have a good relationship with ShellGlobal Solutions. They have helped us toidentify our performance gaps. Some of thetactics that we are implementing requiretechnical resources, and so we are continuingto work with the organisation.”Value DeliveredThe BIR identified potential value capture thatcould be achieved by improving operationalefficiency at the Deer Park chemical plant. Sixmonths into the two-year implementation phase,10 projects had been implemented andreliability improvements were already evident.For example, the reliability of the olefins unithad increased: controllable production losseshad fallen from about 10 to 2%.Many of the activities that were implementedearly in the BIR process were designed toimprove organisational effectiveness. Theseactivities have helped to improve the plant’sorganisational foundations, which will help tosustain future initiatives.Please contact Shell Global Solutions forfurther information:E-mail us at: shellglobalsolutions@shell.comOr visit our website at: www.shell.com/globalsolutionsShell Global Solutions is a network of independent technology companies in theShell Group. In this case study, the expression ‘Shell Global Solutions’ issometimes used for convenience where reference is made to these companiesin general, or where no useful purpose is served by identifying a particularcompany. The information contained in this material is intended to be generalin nature and must not be relied on as specific advice in connection with anydecisions you may make. Shell Global Solutions is not liable for any action youmay take as a result of you relying on such material or for any loss or damagesuffered by you as a result of you taking this action. Furthermore, these materialsdo not in any way constitute an offer to provide specific services. Some servicesmay not be available in certain countries or political subdivisions thereof.* Engineering services in the United States of America are provided by ShellGlobal Solutions (US) Inc. For projects in the United States of America thatentail engineering services, Shell Global Solutions (US) Inc. will retainappropriately licensed engineers as necessary. Please note that certainengineering projects are not offered and are not available to the public inany/some of the States and Territories of the United States of America.All quotations in this document have been reproduced with the kind permissionof our clients.Not all photographs are from Shell Texas US.Copyright © 2007 Shell Global Solutions International BV. All rights reserved.No part of this publication may be reproduced or transmitted in any form orby any means, electronic or mechanical including by photocopy, recording orinformation storage and retrieval system, without permission in writing from ShellGlobal Solutions International BV.GS041526400507 - EN (A)VMS The Hague_H7244