Challenges for Heavy Industries

Steve Willcock
Traditional heavy industries, such as oil refineries, petrochemical facilities and manufacturing plants that operate in economically developed countries, face major challenges in delivering their products competitively and profitably.

They must compete on a worldwide playing field, but the North American market demands significantly higher labor costs combined with more stringent environmental and safety regulations than many other parts of the world. Organizations operating throughout the United States and Canada have been forced to advance process improvement efforts to get the most out of their workforce, minimize plant downtime and maximize worker utilization.

When reviewing global working time studies, there is a widely quoted statistic that work crews spend approximately 25-35% of their shift working with their tools. This is often referred to as ‘wrench time’, and this efficiency rate, when considered over an eight-hour shift, equates to roughly 2-3 hours of actual work per shift. The remainder of the shift is interrupted by barriers to completing work, such as traveling around the site or waiting on instructions, equipment, tools, materials, permitting, or on other crews to finish their activities.

The impact of some of these barriers can be significantly reduced with good planning practices.

The impact of some of these barriers can be significantly reduced with good planning practices. This is being illustrated by some major firms in the U.S. making productive use of modern work planning techniques, such as enterprise level planning software and regular agile work planning meetings. These can push the time spent on tools toward the 40-45% region, primarily by reducing coordination issues. This performance level equates to approximately 3-4 hours of work per eight-hour shift. While this is a significant improvement, it still needs to progress if firms plan to seriously compete with global rivals that don’t have the setbacks of major wage and legislative challenges. This issue is only compounded by the currently strong U.S. dollar, making oversees goods and services more competitive.

The problem for many firms in heavy industries now is that the path to increasing wrench time beyond 40-45% becomes ambiguous, as the barriers become less obvious and/or avoidable. Often, senior management believe they have a clear picture of their processes and sites issues, based on the problems that come across their desk on daily basis. Certain hot issues, such as permitting or access to cranes, are repeatedly flagged as major problem areas as their unavailability is blatantly visible when it prevents working time. However, detailed observation has demonstrated that the perceived hot issues are regularly not the barriers causing the most pain. Lower profile barriers, such as travel time and delays in access to basic tools, can often have a larger impact on working time and, at the same time, are far less visible to management.

Understanding the root causes is the essential first step in developing mitigation plans, otherwise money will be spent fixing the wrong issues. The Time on Tools® service puts observers directly in the field to distinguish the barriers preventing work. This attention to detail gives genuine insight into what is causing the most pain and our database of more than 900 studies provides an industry leading knowledge-base to identify which items are out of step with industry recognized practice. This allows us to work with our clients to separate the priority areas of focus for improvement, from the areas of existing good practice. 

The Time on Tools® service puts observers directly in the field to distinguish the barriers preventing work.

Without this detailed understanding, funding is spent on improving processes and facilities that are not actually causing the problem.
Investing in a Time on Tools® study provides quality information to base the mitigation plans upon, which reduces the overall cost of a mitigation by not spending improvement funds on areas where the returns will be minimal. This allows an organization to benefit from a larger return on investment from process improvement efforts, as demonstrated by the diagram below:

The chart on the left illustrates an example of developing a mitigation plan without having identified the key barriers and areas of existing acceptable practice. The mitigation plan will be more expensive as the organization will not have a clear picture of where they should focus their efforts, which reduces the advantage gained from their investment. The chart on the right illustrates how spending money on a study to understand the root causes of the issues experienced, organizations can reduce the cost of their mitigation plans by focusing on the items causing the most pain. This provides a larger advantage in return for the investment made.

This concept has been used to explain the benefits of a variety of consulting services such as time and motion studies. However unlike the confrontational approach from traditional time and motion studies, Time on Tools® is collaborative and actively seeks opinions from the workforce involved, as it is focused on barrier identification as opposed to worker activities.

The intent is to build a collaborative approach to barrier identification and mitigation, which quantifies the impact of those barriers and uses data about industry recognized practice to focus mitigations on the areas of greatest need. The result of this is that our clients can work with their unions and workforce to adopt efficient improvement actions to glean the benefits more quickly without spending money on unnecessary actions.

Through an ongoing program of studies, we continue to refine the improvement efforts as the challenges that face an organization develop. In today’s environment, where new technological solutions to traditional problems are developing at an unprecedented rate, detailed understanding of work barriers, allows Time on Tools® consultants to identify where new technologies and practices can add significant value to an individual owner’s process.

Faithful+Gould has built up more than 65 years of experience consulting for heavy industries, and that experience tells us that when you want to understand the root cause of a barrier, there is no substitute for direct observation, and not appreciating the root cause of your problems is a recipe to waste money.